* US filed WTO case in WTO in 2003, won ruling in 2006

* US started, then suspended sanctions proceedings in 2008

(Adds background on case, more quotes)

By Doug Palmer

WASHINGTON (Reuters) - The largest U.S. farm group
has urged the Obama administration to begin steps towards
imposing sanctions on the European Union in a longrunning
dispute over the EU's treatment of genetically modified crops.

The American Farm Bureau Federation, in comments given to
the administration Monday, complained the EU still has not
complied with a 2006 World Trade Organization ruling against
its "de facto" moratorium on approving new varieties of biotech
crops for sale in the 27-nation bloc.

"The inability of the EU to operate a timely and
predictable regulatory process ended U.S. corn exports (to the
EU) in 1998 and has reduced corn byproducts substantially," the
Farm Bureau said in its recommendations for President Barack
Obama's National Export Initiative.

"If the EU does not immediately begin to make timely,
science-based regulatory decisions on pending and future
applications, soybean exports also are at serious risk," the
farm group said.

"USTR should initiate a retaliation proceeding against the
EU to force compliance with the WTO ruling on GMOs
(genetically-modified organisms)," the group said.

The request comes just a few days before U.S. Trade
Representative Ron Kirk is due to give a speech in Pittsburgh
on the Obama administration's efforts to ensure other countries
live up to trade agreements.

U.S. farmers have widely embraced genetically modified
crops, which offer higher yields with reduced pesticides. But
the technology is viewed with suspicion by many European
consumers because of perceived safety concerns.

The United States first challenged the EU's de facto
moratorium and other policies that impeded sales of U.S.
genetically modified crops at the WTO in 2003 and was joined by
Canada and Argentina.

The WTO's 2006 ruling largely backed the complaint brought
by the three countries, who argued the EU was failing to apply
its own scientific approval procedures to GM products.

Since then, the United States has agreed at least twice to
give the EU more time to comply with the ruling.

Washington also began steps in January 2008 to retaliate
against the European Union, but later suspended that action.

The Farm Bureau initially supported the U.S. government
decision not to retaliate in the case in the hope the two sides
would find a way to "normalize" trade in biotech crops.

Now the group said it has changed its mind.

"U.S. agriculture has suffered substantial damage from the
EU's failure to abide by its WTO commitments and this damage
will continue to grow as long as the EU does not comply with
the WTO ruling," the Farm Bureau said.

(Reporting by Doug Palmer; Editing by Sandra Maler and
Cynthia Osterman)