Hunan farmers who had planted genetically modified corn seeds smuggled from Thailand and Hong Kong were stunned last autumn after the more than 133 square metres of crops they planted yielded nothing.
After months of investigation, Hunan police under the supervision of Chinese Ministry of Public Sercurity, had arrested suspects involved in the smuggling chain.
The case has sounded alarms for Beijing authorities who in a conference this week called seed smuggling a "serious threat" to national security.
The 29 households in Hunan's Tongdao county had spent several thousands yuan purchasing the 100 kilograms of "golden seeds" from a Guangdong vendor, China's National Business Daily (NBD) reported on Friday. 
Zou Jianming, the head of a seed company in Guangdong, and Li Zhenyao, Zou's supplier, were both arrested.
Li later confessed that he had smuggled into China more than 50 tonnes of corn seeds since 2003, produced by Monsanto and Syngenta. Both are world leading producers of GM seeds.
Li said he would usually bribe Hong Kong truck drivers or Chinese tourists returning from abroad into helping him smuggle the seeds into mainland China.
Duan, a spokesperson from Tonghua's police department, told the South China Morning Post in a phone interview on Friday that local farmers had received more than 400,000 yuan (HK$510,803) in compensation from Zou's company. He said local officials would continue educating farmers on risks of buying smuggled seeds.
"We discovered that seed smuggling has been going on for a long time and has posed a national risk to security," Liu Yuejin, a professor at Bejing's University of International Relations who assisted with the investigation, told NBD.
The world's second largest corn consumer, China has yet to allow commercial plantation of GM staple crops. Its national quarantine authority said on Friday that the country has rejected a total of 545,000 tonnes of corn from the US this month as of Thursday, after detecting unapproved GM strains, according to a Reuters report.