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Reuters | By Christopher Lyddon

LONDON, Sept 2 (Reuters) -- European campaigners said they were one step closer to victory on Thursday after reports U.S. grain giant Archer Daniels Midland Co called on growers to segregate genetically modified and conventional crops.

The move was welcomed by the British Retail Consortium, the trade association which represents all shops, including the big supermarkets.

"It is a shame they couldn't do this two years ago when BRC first suggested it to them," a spokesman said. "We are pleased to hear that ADM have made the call for segregation. It will help British food retailers in their efforts to source non-GM ingredients."

"It's great news," said a spokeswoman for environmental group Greenpeace, long-time opponents of genetic modification.

"It's excellent that they're doing this finally after having said for years that it was impossible to segregate," she said.

Greenpeace had expected an eventual change in attitude, she said, because of the opposition in Europe's big food market. "The next step we expect is for them to stop growing GM crops altogether, because it's more trouble than it's worth."

Greenpeace has taken a strong stance against genetically modified foods. In Britain it has attacked a programme of trials of GM crops as irresponsible and urged the government to pull out. Environmental activists have repeatedly attacked and destroyed fields of GM test crops in Britain.

British retailers have also backed away from GM products. Marks & Spencer (quote from Yahoo! UK & Ireland: MKS.L) said in August it would start offering meat from animals which had not been fed genetically modified soya and maize and announced in July that its entire processed food range was made without GM soya or maize.

Britain's biggest supermarket chain Tesco (quote from Yahoo! UK & Ireland: TSCO.L) has said it will remove GM ingredients from food products wherever possible. Frozen foods group Iceland (quote from Yahoo! UK & Ireland: ICE.L) has refused to stock GM foods.

Safeway (quote from Yahoo! UK & Ireland: SFW.L) is systematically removing all GM ingredients from own-brand products. "Safeway's position on GM soya and maize is that they fail to offer any tangible benefits," it said in July.

Calls for GM soya to be segregated have not been confined to Britain. On Thursday, seperate from the ADM move, French animal feed cooperative trade group Syncopac on Thursday urged the United States to start segregating soy.

"We are asking the European Union to demand that the United States separate GM soy from non-GM soy," Syncopac President Daniel Rabiller told a news conference.

Concern over genetic modification had halted U.S. sales of reduced levy maize to Spain, under a long standing EU trade concession. After news of the ADM move was known, Spanish traders said shipments could restart.

"If they really segregate crops, the U.S. will return as a supplier of corn to Iberia," one senior trader said.

Illinois-based ADM could not immediately be reached by Reuters for comment.

U.S. exporters and policians have long insisted that segregating genetically modified and conventional soya and maize was impractical. European food processors and retailers who called for a segregated supply stream were accused of failing to understand commodity trading.

But agribusiness giant Cargill Inc said in April it was following a plan agreed by the U.S. corn industry to segregate GM corn at elevators and processing plants to prevent exports of GM corn or products to Europe from seeds not yet approved by the European Union.

Archer Daniels Midland Co and A.E. Staley & Co., a unit of British food group Tate and Lyle Plc (quote from Yahoo! UK & Ireland: TATE.L), said in April they would avoid buying corn for processing derived from GM seeds awaiting approval in the EU.

And U.S. Agriculture Secretary Dan Glickman warned in July that consumers could not be taken for granted and advised producers against an 'if you grow it, they will come' mentality.

A spokesman for Monsanto, a leader in the GM sector with its Roundup Ready soya, said he had no direct comment.

"We're at the bottom of the supply chain. We supply the technology," he said. But he noted that by accepting Monsanto's GM soya as "substantially equivalent," to conventional soya, regulators in Europe and the U.S. had accepted there was no need for segregation.