"This latest incident of contamination-the third in the last six months-underscores the USDA's inability to keep unwanted and potentially harmful modified genes out of our food supply," said Karen Perry Stillerman, a food analyst at the non-profit group Union of Concerned Scientists (UCS).
The USDA's Animal and Plant Health Inspection Service (APHIS) last week issued 'emergency action notifications' to prevent the planting and distribution of a rice seed from German firm BASF.
The variety, Clearfield CL 131, was not developed as a genetically engineered product, but the firm's own testing revealed that the seed may have been contaminated with a genetically modified strain.
BASF last week notified the USDA of its findings, which are now due to be verified by further tests conducted by APHIS.
The US rice industry - and the USDA's regulatory standing - already suffered a major hit last year, after Bayer Crop Sciences in July notified the agency that it had discovered trace amounts of an unapproved GM rice in samples of commercial rice seed.
The incident sparked a flow of reactions against the firm and the US rice export market, with food safety warnings and regulatory restrictions resonating globally.
These two incidents together indicate that the agency is lacking in its protection of the US food supply, claimed UCS last week.
The organization, which says it combines independent scientific research and citizen action for a safer consumer environment, also said the USDA was taking consumer health risks by approving the first commercial production of a food crop - again rice - engineered with human genes.
The new rice is genetically engineered to produce lactiva and lysomin - two proteins found naturally in breast milk, and reported to have significant potential against diarrhea.
California-based Ventria Bioscience this month received approval from the agency to cultivate over 3,000 acres of the rice in Kansas.
But the news sparked new concerns and fears from the global anti-GM lobby, and UCS added its voice to these.
According to the group, pharmaceutical crops such as Ventria's rice pose a threat to the food supply and public health because the proteins they contain are intended to be biologically active in humans and may be harmful if eaten accidentally.
"When such compounds are produced in food crops grown outdoors, they are almost certain to contaminate the food supply," said UCS.
"Growing pharmaceutical food crops outdoors is not worth the risk it poses to public health and the financial health of farmers and food companies.
Because it is virtually impossible to produce pharma food crops outdoors safely, even if very strong regulatory systems were put in place, we are calling for a USDA ban," said Stillerman.
According to Stillerman, a 2005 report by the USDA's internal auditor found that the agency's oversight of pharma crops was lax.
"In some cases, regulators didn't know where pharma crops were grown or stored.
Several recent court decisions also have lambasted the agency's risk assessment and regulatory systems for pharma and other genetically engineered crops."