CHICAGO, Dec 21 (Reuters) - The U.S. Environmental Protection Agency is assessing whether the herbicide dicamba can be sprayed on soybean and cotton plants genetically engineered to resist the chemical, without the procedure posing "unreasonable risks" to other crops, an agency official said on Tuesday.

Farmers and scientists have reported problems with dicamba drifting away from where it is sprayed on fields, causing damage to plants whose genes have not been modified to resist the weed killer.

The EPA said it received about 3,500 reports this year indicating that more than one million acres of non-dicamba-tolerant soybean crops were allegedly damaged when the chemical drifted from where it was applied. Trees and crops like rice and grapes also suffered damage, the agency said.

The number, severity and geographic extent of the incidents was similar to 2020, when the EPA tightened restrictions on dicamba use after complaints about dicamba drifting from farmers and scientists, the agency said.

"Right now we don't know whether over-the-top dicamba can be used in a manner that doesn't pose unreasonable risks to non-target crops and other plants," said Michal Freedhoff, assistant administrator for the EPA'S Office of Chemical Safety and Pollution Prevention.

The EPA is evaluating all its options for addressing future dicamba-related incidents, Freedhoff said.

Further restrictions on use would be a blow to Bayer AG , which sells dicamba and seeds to grow crops engineered to tolerate it. The company has settled lawsuits brought by land owners who say their crops were damaged by neighbors using dicamba.

Some farmers and seed companies have called for regulators to limit spraying to the spring season, before crops are planted.

Regulatory changes will probably not be fully implemented by the 2022 growing season, the EPA said. The agency said it will work with states that want to impose further restrictions.

In June 2020, a U.S. appeals court blocked dicamba sales and ruled the EPA had substantially understated risks related to its use.

In October, 2020, the EPA under former President Donald Trump re-authorized the use of dicamba-based weedkillers, invalidating the court ruling. (Reporting by Tom Polansek; Editing by David Gregorio)