May 8 (Reuters) - Vermont on Thursday became the first U.S. state to mandate labeling of foods made with genetically modified organisms as Governor Peter Shumlin signed a law that is expected to be challenged in court by some food and agriculture companies.

The law, set to take effect July 1, 2016, would for the first time align at least a small part of the United States with more than 60 other countries that require labeling of genetically engineered foods. And it sets the stage for more than two dozen other states that are currently considering mandatory labeling of such GMO foods.

"Vermonters will have the right to know what's in their food," Shumlin told cheering supporters in a speech on the state House steps. "We are pro-information. Vermont gets it right with this bill."

Shumlin said the state had set up a "food fight fund" to take online donations to help defend the law from litigation.

The Grocery Manufacturers Association (GMA) said after the bill was signed into law that it would file suit in federal court to try to overturn the law.

Consumer groups and lawmakers supporting mandatory labeling say there are concerns about the safety and the environmental impacts of genetically engineered crops, and labels would help consumers easily distinguish products containing GMOs so they can avoid them if they wish.

The consumer sentiment has pushed a growing number of U.S. food companies to start using non-genetically modified ingredients for their products because of the consumer backlash against GMOs.

But the move away from GMOs has upset the food and agriculture industries, including the makers of genetically modified corn, soybeans, canola and other crops widely used in packaged foods. They say their products are proven safe, and that mandatory labels will imply they are unsafe, confuse consumers and increase costs.

"Scientific bodies and regulatory officials around the world recognize that foods made from genetically modified (GM) crops are as safe as their non-GM counterparts," said Cathleen Enright, executive vice president of the Biotechnology Industry Organization (BIO). "GM crops have enabled farmers to produce more on less land with fewer pesticide applications, less water and reduced on-farm fuel use."

BIO, a trade group whose members include Monsanto Co , Dow AgroSciences, a unit of Dow Chemical Co, and other biotech seed companies, said food costs for an average household would rise as $400 per year due to mandatory labeling.

BIO and the GMA are backing a proposed federal law that would nullify Vermont's labeling law and any other mandatory labeling of GMOs in the United States.

They say there is scientific consensus on the safety of GMOs. But last October, a group of 93 international scientists issued a statement saying that claim is false, and more independent research is needed.