By Maximilian Heath

BUENOS AIRES, April 14 (Reuters) - Argentina, the world's No. 3 soy exporter, said on Thursday the government must authorize any grain inspection, dealing a blow to Monsanto Co which wants exporters to check cargoes to make sure farmers had paid to produce its genetically modified soybeans.

Monsanto responded in an email that it sought to comply with all laws, but noted that Argentine farmers had benefited substantially from its Intacta technology and called for "all producers to pay ... if they decide to use it."

For a year, Monsanto has pressured shipping companies to notify it when crops grown with the technology are slated for export without documentation showing royalties had been paid. Intacta soybeans have a gene that protects plants against crop-devouring worms.

Argentina's agriculture ministry said in an official bulletin that any inspection needs its prior authorization. It did not mention the dispute between farmers and Monsanto.

Monsanto is pressing for royalties even for grains produced from second-generation seeds. Farmers argue that Argentinian law does not require this and have urged the government to stop private companies from monitoring crops.

The Argentine Rural Society, or SRA, which represents medium- to large-scale producers, said on Thursday the inspections were unwarranted.

"These methods were not only not authorized, but furthermore, we saw them as an abuse of power for a company to be acting like the police," SRA President Luis Etchevehere said in a phone interview.

(Reporting by Maximilian Heath; Writing by Sarah Marsh; Editing by Richard Chang)