West Australian farmers whose crops are contaminated by genetically modified material could soon receive compensation for economic losses.

The standing committee on environment and public affairs will conduct a parliamentary inquiry into possible compensation schemes for costs incurred by farmers in cases of GM cross-contamination.

The inquiry was sparked by a petition from European consumer rights organisation Foodwatch, submitted by upper house Greens member Diane Evers in January.

“WA farmers should not lose their right to sell non-GM crops at a higher price due to the actions of another grower,” Ms Evers said on Thursday.

She said the committee had stated its intention to consider broader matters outside the terms of the petition.