If California voters approve the measure on November 6, it would be the first time U.S. food makers have to label products that contain GMOs, or ingredients whose DNA has been manipulated by scientists.

The United States does not require safety testing for GM ingredients before they go to market. Industry says the products are safe, but there is a fiery debate raging around the science.

Dozens of countries already have GM food labeling requirements, with the European Union imposing mandatory labeling in 1997. Since then, GM products and crops have virtually disappeared from that market.

For more than a week, an opposition group funded by Monsanto, PepsiCo Inc and others has dominated television and radio air time with ads portraying the labeling proposal as an arbitrary set of new rules that will spawn frivolous lawsuits and boost food prices, positions disputed by supporters of the proposed new measures.

Experts say the real risk is that food companies may be more likely to stop using GMOs, than to label them.

That could disrupt U.S. food production because ingredients like GM corn, soybeans and canola have for years been staples in virtually every type of packaged food, from soup and tofu to breakfast cereals and chips.

Support for the GMO labeling proposal has plummeted to 48.3 percent from 66.9 percent two weeks ago, according to an online survey of 830 likely California voters conducted for the California Business Roundtable and Pepperdine University's School of Public Policy by M4 Strategies.

At the same time, the proportion of respondents likely to vote "no" on the measure - known as Proposition 37 - jumped to 40.2 percent from 22.3 percent two weeks ago, according to the survey results released on Thursday.

"Clearly the 'No' side has more money and the advertising is having an effect," Michael Shires, a Pepperdine professor who oversees the survey, told Reuters.

Funding for the effort to defeat the "Right to Know" ballot is led by chemical giants Monsanto and DuPont, each of which owns businesses that are the world's top sellers of genetically modified seeds.

Monsanto has contributed just over $7 million to fight the proposal, while DuPont has kicked in about $5 million. In all, the "No on 37" camp raised a total of $34.6 million, according to filings with the California Secretary of State.

"Yes on 37" supporters, led by the Organic Consumers Association and Joseph Mercola, a natural health information provider, have donated $5.5 million.

"When there's an initiative that's going to affect an industry that can rally resources, they've usually been able to stop it," said Shires. "It still could go either way."

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Supporters of the new labeling measures on Thursday accused the "No on 37" group of "pounding Californians with lies and deception", but the group says it is simply underscoring flaws in the labeling proposal.

The "No on 37" group recently had to pull an ad that identified its star, Henry Miller, as a Stanford University doctor rather than as a fellow at the conservative Hoover Institution think tank on the university's campus. The group corrected the affiliation after Stanford complained.

Supporters of the ballot initiative, including food and environmental activists as well as organic growers, say consumers have the right to know what's in the food they eat.

Because foods made with GMOs are not labeled, it is impossible to trace any food allergies or other ill effects suffered by humans or animals, they say.

Drafters of Proposition 37 say they excluded certain foods from the labeling rules to make them simpler and less burdensome for businesses. Exemptions include restaurant food as well as milk and meat from animals that eat GM feed.

California is the top milk-producing state in nation and its restaurant industry has annual sales of about $58 billion. It is not a significant producer of GM crops.

Opponents of the bill have seized on the exclusions. Their ads question why a frozen pizza (sold in a supermarket) would be labeled, while delivery pizza (from a restaurant) would not.

Each side has trotted out its own cost studies, which come to significantly different conclusions.

(Reporting by Lisa Baertlein in Los Angeles; Editing by Bernadette Baum and Michael Perry)

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