A crucial question facing the global agri-food system is whether genetically modified (GM) crops can co-exist with traditional crops. The purpose of this paper is to clarify how the presence of GM crops and changes in the probability of genetic transfer between crops on an agricultural landscape can result in non-GM crop contamination. To investigate this issue, we develop and analyze a spatial simulation model of GM crop introduction and expansion. The GM crop has certain well-defined transfer characteristics related to space and location relative to other crops, and these help determine the rate at which individual fields become 'contaminated' by the GM crop. We find that in many cases, careful attention needs to be paid to the spatial arrangement of GM crops in relation to non-GM crops in order to ensure that GM contamination is not ubiquitous. The relative ease of system-wide cross-pollination of farmland by GM crops indicates that significant external costs could be imposed on a typical farmer because of the inability to certify produce for sale in potentially lucrative GM-free markets. The analysis suggests that the potential for market failure in this industry may justify a need for government action, and that innovative and flexible regulatory structures will be needed to handle the wide range of co-mingling risks posed by differing crops.