Jose Hermetto Hoffmann knows he's right. And as soybean growers in his state begin to win market share in Europe and Asia because of his stance, they'll see.

Hoffmann is secretary of agriculture of the Brazilian state of Rio Grande do Sul. While commercial planting of genetically modified (GM) crops is not yet allowed anywhere in Brazil, this is the only state with a law specifically prohibiting them. And the state's Secretariate of Agriculture enforces it. Therein lies the conflict.

Years of soybean monoculture in some areas of the state have contributed to serious weed issues and some farmers have paid high prices for contraband Roundup Ready soybean seed from Argentina.

At the same time, Hoffmann said, "I believe there is a niche market for non-genetically modified soybeans. There is the expectation for a niche in Europe and Asia."

The secretary had 18 two-person inspection teams randomly checking fields of this year's crop for the presence of GM. After a number of producers were caught and fined, Hoffmann offered a nearly $5 million loan package to help them replant with conventional seed.

Also, Rio Grande do Sul is the only one of Brazil's 26 states in which Ibama, Brazil's EPA, has sought out and fined producers for planting GM soybeans.

In addition, inspectors also spot check more than 800,000 metric tons of the state's soybeans that pass through the secretariate's grain storage system in order "to guarantee that there has been no mixing with GM soybeans" along the way.

The Brazilian federal government last year gave the green light for commercial planting of GM soybeans. But a number of groups, including the State of Rio Grande do Sul and Greenpeace, protested, and a court injunction has delayed that approval pending completion of a battery of environmental impact studies.

The question of whether Rio Grande do Sul could continue to ban GM crops after the federal government has approved them has caused public disagreement between state and federal officials. But for Hoffmann, the point is moot.

"I believe the market in no way supports transgenic soybeans," he says. "The federal government will come around to our point of view on this issue."