cropAgribiz: flying high … or coming down? If you run a globe-spanning, U.S.-centered agribusiness firm, you’re probably not sure whether to cry in your Krug or toast with it this week.*

The bad news for the GMO/fertilizer/pesticide set: A federal court in San Francisco rebuked the USDA for greenlighting genetically modified sugar beets without rigorous testing of the novel crop’s environmental impact. And that could have a major impact on the GMO seed industry, because there’s never been a real reckoning among federal agencies about the impact of GMOs.

Want to know who came with the official rationale that GMOs are “substantially equivalent” to conventional crops–and this worthy of a regulatory free ride? It was that noted beautiful minder Dan Quayle, sitting on an Bush I’s Council on Competitiveness in the early ’90s.

The sugar beet ruling, coming on the heels of a similar one on GMO alfafa, may mark the beginning of the end of that free ride.

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Fully 30 percent of the globe’s refined sugar comes from beets–and the U.S. is a major producer. In 2005, the USDA ruled that the use of Monsanto’s new line of Roundup Ready sugar beets–genetically rigged to withstand application of Monsanto’s flagship herbicide–had “no significant impact” on the environment.

Trouble is, the agency did so without issuing a detailed “environmental impact statement,” as it’s arguably required to under the National Environmental Protection Act–and that’s why the Center for Food Safety and other sustainable-food NGOs sued the USDA.

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U.S. District Judge Jeffrey S. White ruled (PDF here) in favor of the Center for Food Safety argument.

The ruling hinged on the argument that GMO sugar beets can cross-pollinate with and genetically contaminate non-GMO beets–and even with related species like Swiss chard and table beets. (In Willamette County, Ore., epicenter of industrial sugar-beet production, these other beet types are grown commonly, too.)

“In light of the large distances pollen can travel by wind and the context that seed for sugar beets, Swiss chard, and table beets are primarily grown in one valley in Oregon, Plaintiffs have demonstrated that deregulation [of GMO sugar beets] may significantly effect the environment,” the Judge White declared.

So now he’s ordering a detailed environmental impact statement (EIS) from the USDA on GMO sugar beets. But any rigorous EIS will include not only the cross-contamination problem, but also the  growing specter of Roundup-tolerant “superweeds,” which are already rampant in many parts of the country where Roundup Ready seeds are commonly used.

The agency might even have to reckon with the recent study that showed that so-called “inert” ingredients in Roundup quite actively damage human cells.

In other words, this ruling–if it stands up under an imminent round of appeals–could be a slippery slope for Monsanto. Investors, for their part, seem a bit concerned–since the ruling was announced Tuesday, the company’s shares are down about 2 percent.

Now for the good news for the great masters of the corn field: President Obama has nominated one of their own as the chief agricultural negotiator at the U.S. Trade Office.

To take the post, Islam “Isi” Siddiqui will have to leave his current perch as vice president for agricultural biotechnology and trade at CropLife America, the trade group representing the U.S. agrichemical industry (member list here). Its mission: to hip the public (and the government)  to the “”benefits of pesticides and crop-protection chemicals.”

This is the crew that chided Michelle Obama for daring to opt not to use “crop protection” (i.e., toxic pesticides) in the White House Garden.

Once the Senate’s conservative stalwarts recover from the shock of supporting a man named Islam, they’ll surely wave Siddiqui right through.

As the Doha round of global trade talks lurches on, Siddiqui’s position will be an important one. Southerm-hemisphere nations like India and Brazil are pushing for lower U.S. crop subsidies, while the U.S. is demanding wide-open markets for U.S. goods–everything from foodstuffs like industrial corn to agrichemicals. Siddiqui can be counted on to push that agenda hard.

Another critical ag-related trade issue is GMOs. Many nations have opted to ban GMOs on the precautionary principle. The few companies who dominate the GMO seed market–Monsanto, Dupont, Syngenta, and BASF, all Croplife America–find that attitude abhorrent. Siddiqui can be expected to play hardball in using trade talks as a blunt instrument to knock those precautions down.

* Since I’m an acolyte of the wine writer Alice Feiring, you should read my casual assumption that agribiz execs quaff Krug, an insipid status-brand Champagne, as a stinging insult.