According to a report by CORDIS, Schröder warned a convention this week that technological scepticism is damaging Germany's position in world markets.
"There is no ill will towards the technology in Germany, rather an extreme reluctance to implement genetic engineering," the chancellor is reported as saying at the convention by the Frankfurter Allgemeine Zeitung.
According to Schröder, Germans think about the risks first but he hopes that German society will grow aware of the potential and promises that genetic engineering has to offer.
The Frankfurter Allgemeine Zeitung further reports that the chancellor has complained to the German Federal Council that Germany's position on the matter of genetically modified organisms is too restrictive.
"This is leading to a situation that weakens our market position and does not promote German innovation," he is reported as saying.
Facing the fury of anti-GM campaigners, earlier this year the European Commission broke the de facto moratorium - ban - on new GM foods and pushed through approval, the first, for a GM sweetcorn supplied by Swiss biotech firm Syngenta to enter the food chain.
But the unpopularity of biotech crops in the minds of the European consumer means the food industry has been slow to embrace the GM food sources on the grounds of simple business sense. Food manufacturers keen to keep sales afloat will reject any use of genetically modified sources in their formulations, and consequently any need to GM label.
A recent survey polled by the UK's consumer magazine Which? found that consumers in the UK feel even more strongly about GM foods than they did two years ago and more than six out of 10 people (61 per cent) were concerned about the use of GM material in food production - up from 56 per cent in 2002.