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Reuters / By K.T. Arasu

CHICAGO (Reuters) - Tyson Foods Inc., the world's largest poultry producer, said on Friday it has stopped feeding its chickens with a gene-altered corn approved for use only as animal feed but turned up in taco shells and flour.

The Springdale, Ark.-based Tyson is believed to be the first food company to stop the use of StarLink corn as an animal feed, as concerns emerged that the corn has spread through the U.S. food chain.

"Tyson has elected to stop acquiring corn that we know is StarLink corn," Tyson spokesman Ed Nicholson told Reuters.

He said the company did not plan to carry out independent testing but will leave to its suppliers to ensure corn it purchases is free of StarLink.

"This is basically a precautionary move to avoid confusion among consumers, although to my understanding, there has been no links of the protein in StarLink transferring to products."

The protein, known as Cry9C and not found in other crops that are genetically modified, is safe for animals but may trigger allergic reactions in humans, including fever, rashes or diarrhea, according to government scientists.

European pharmaceutical giant Aventis SA, which engineered StarLink corn, has said 90 percent of the corn has been accounted for and was "tracking" the remainder.

But sources close to the company and in the industry said that some 9 million bushels of StarLink corn is unaccounted for.

Nicholson said Tyson had stopped buying StarLink corn about a month ago, when news of the corn entering the food chain and turning up in taco shells was first made public.

The episode began late last month when the largest food manufacturer in the United States, Kraft Foods, a unit of Philip Morris Cos. Inc., recalled Taco Bell brand taco shells because they contained StarLink corn.

On Tuesday, ConAgra Foods Inc., the country's second-largest food manufacturer, said it had suspended milling operations at its corn processing plant in Kansas while it tests for StarLink corn.

Azteca Milling, a distributor to Mission Foods and other food makers, said it stopped shipping and milling yellow corn on Sept. 19. Azteca and Mission also voluntarily recalled some yellow corn products because they could contain StarLink. The two companies are units of Texas food producer Gruma Corp., a subsidiary of Mexican food group Gruma.

Aventis has since agreed to cancel its license to sell the StarLink corn after government officials said the firm was responsible for ensuring farmers properly segregate the corn.

The company has been buying back StarLink corn, paying farmers who planted the variety 25 cents more than the market rate to channel the grain solely as animal feed.

Nicholson said Tyson might have bought StarLink corn before the Kraft recall of taco shells, but added that "it will be difficult to say because it was not identified then."

"It will be virtually impossible to say that none of it (StarLink)will end up in our feed because our mills are not testing at this point," he added.

He said Tyson buys about 6.3 million bushels of corn each week.: