* Court rules GMO restrictions do not hit farmers' rights
* Complaint from state government rejected
(Adds biotech industry reaction paragraph 11-12)
HAMBURG, Nov 24 (Reuters) - Germany's top court on Wednesday rejected a complaint that restrictive laws on cultivating crops with genetically-modified organisms (GMOs) violate the constitution.
The constitutional court in Karlsruhe turned down a complaint from the state government of Saxony-Anhalt that restrictions on GMO cultivation unfairly damaged the interests of farmers interested in growing GMO crops.
Germany compels farmers growing GMO crops to keep a minimum distance from conventional plantings and makes them liable to pay compensation to neighbouring farmers if traces of GMOs are found on their conventional crops.
German farming association DBV said the court's decision confirmed the association's view that growing GMO crops presented an "incalculable" risk to farmers even if they obeyed the law.
The association said it would continue to advise farmers not to grow GMO crops because of the current law. It was not possible for farmers to get insurance to cover their liability for cases of GMO cross-pollination, the DBV said.
The German government welcomed the decision. Junior agriculture and consumer protection minister Robert Kloos said the decision confirmed the government's policy.
"German genetic technology law should provide protection for both humans and the environment and so permit responsible genetic technology," Kloos said in a statement.
The Saxony-Anhalt state government had said that the tough GMO regulations - unique in Europe - restricted freedom for research, development and use of biotech crops in an illegitimate way as several GMO crops had been approved for cultivation as safe.
In April 2009, Germany's government banned commercial production of GMO maize type MON 810 GMO from U.S. biotech giant Monsanto <MON.N> on health concerns despite European Union safety approval.
But in March this year, Germany accepted an EU decision to approve commercial cultivation of the GMO potato Amflora developed by German group BASF <BASFn.DE> for industrial starches, not human food.
German pro-biotech association DIB said it regretted the decision.
"The genetic technology law in its current form curtails the necessary innovation in plant biotechnology for agriculture and does not promote it," said a statement from DIB chairman Stefan Marcinowski, who is also the BASF director responsible for plant science.
The EU is responsible for GMO approvals in the bloc, but is considering new rules to permit individual member states to decide whether biotech crops are cultivated in their countries.
Germany's ruling centre-right coalition has a cautiously-favourable policy towards GMOs, but ministers have publicly disagreed on the issue.
(Reporting by Michael Hogan and Diana Niedernhoefer; editing by Michael Taylor) ((michael.j.hogan@thomsonreuters.com Reuters messaging: michael.hogan.reuters.com@reuters.net +49 40 419 03 4275))
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