CHICAGO, Jan 16 (Reuters) - Life sciences company Aventis CropScience (NYSE:AVE - news) said on Tuesday it would compensate farmers who did not grow its unapproved gene-altered corn variety but whose crops were tainted with its key characteristic.

The offer comes as the controversy over StarLink corn was rekindled when traces of the variety were detected in samples of U.S. corn shipped for food use to Japan, the top importer of the grain from the United States.

StarLink, which contains the Cry9C protein that repels the European corn borer insect pest, is not approved for food use because of concerns it might trigger allergic reactions.

Late last year, Aventis said it found the Cry9C protein in a variety of 1998 corn seed produced by Garst Seed Co. of Iowa but said it did not know how the contamination occurred. USDA officials said it could have been caused by pollen drift.

"We are working very hard. Over a million test kits are in use and Aventis CropScience is paying for those," an Aventis spokeswoman said on Tuesday. She declined further comment.

Aventis already has compensation programs for farmers who grew StarLink corn and who planted corn within 660 feet of the variety, which run the risk of cross pollination. It was also compensating farmers who grew corn beyond the 660-ft zone but inadvertently commingled it with corn grown near StarLink.

Aventis SA said in November that it was too early to evaluate costs related to StarLink corn but added that they would be "significantly below" $1 billion.

Traces of StarLink corn were discovered in taco shells in September, leading to a series of food recalls. StarLink was also detected in food in Japan and South Korea, which sparked a sharp decline in U.S. corn imports from the key buyers.

Industry sources involved in seeking compensation for farmers and grain handlers from Aventis hoped that the latest offer would help to fully identify how much StarLink and other varieties with the Cry9C protein were in farmers' hands.

Aventis has given farmers, who knew before January 1 that they grew Cry9C corn, until February 25 to sign up.

On its website, Aventis posted a notice saying that it would pay 25 cents per bushel to farmers whose non-StarLink corn and corn that was not grown within 660 feet of StarLink tested positive for the Cry9C protein or Cry9C DNA.

Aventis said it would pay the same amount to farmers for ``buffer corn'' that is grown within 660 feet of Cry9C corn.

For corn that was tainted when commingled with Cry9C or Cry9C buffer corn, Aventis will pay 5 cents per bushel if used on-farm and 10 cents if sold at Aventis approved sites.

Aventis will also pay the difference in the price the farmer would receive for his corn in the open market and that offered at "StarLink Logistics Approved Destinations".

In a related development, Japanese authorities said on Monday they had detected traces of StarLink corn in one of four cargoes shipped on December 25 from the United States to Japan. The samples had tested negative in the United States.

The discovery threw into question StarLink testing procedures in the United States, and weakened corn futures at the Chicago Board of Trade. Corn futures ended 1-1/2 to 3 cents per bushel lower, with March down 3 cents at $2.16-1/4.

"Some of the scenarios of Japan and others going to other countries to secure, especially food-use supplies, is about to come true," grain analyst Shawn McCambridge of Prudential Securities said.

"Without the StarLink issue (resurfacing), the market had a chance of consolidating a little bit. The StarLink issue just kind of overextended the weakness," he added.

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