* Chavez seizes Smurfit Kappa eucalyptus farm

* To replant with different crop

* No assurance on compensation (Adds minister on compensation, details paragraphs 6-8)

By Frank Jack Daniel

CARACAS, March 6 (Reuters) - Venezuelan President Hugo Chavez seized a eucalyptus tree farm owned by Ireland's Smurfit Kappa, vowing to clear the trees and use the land for crops as he seeks to tighten state control over food output.

Since winning a referendum vote three weeks ago that allows him to run again for reelection in 2012, Chavez has made agriculture and food his priority, renewing a drive to both nationalize assets and boost production via land reform.

Earlier this week, Chavez nationalized a rice mill owned by giant U.S. food company Cargill Inc and has sent troops to other rice mills in a drive to control supplies of the grain.

Smurfit Kappa Group Plc <SKG.I> <SKG.L> said on Friday that it was in talks with Venezuela after authorities took over about 3,700 acres (1,500 hectares) of forestry land with a value of about 500,000 euros. Chavez said the government plans to use the land for other unspecified crops in the OPEC nation.

Smurfit Kappa is a major cardboard packaging company. Its London-listed stock was down over 6 percent on Friday.

Agriculture Minister Elias Jaua gave no assurances Venezuela would compensate the company, saying Smurfit would have to prove first that it was the real owner of the farm.

Chavez has generally sought to compensate foreign owners fairly for takeovers since he launched a massive nationalization drive in 2007 that has wrested oil, telecommunications, electricity and other companies from the private sector.

But with oil income plummeting, he has warned that he might carry on nationalizing without immediately compensating companies with cash for their seized assets.

Chavez said late on Thursday that the government had intervened in the El Pinal eucalyptus plantation because the water-hungry trees were drying out local rivers. He said the government would replant the farm.

"We are going to use this wood in a rational manner and then we will change the vocation of the land; we are going to plant other things that are not eucalyptus," Chavez said during a televised address.

Analyst Robert Eason of Goodbody Stockbrokers in Dublin said in a research note that Smurfit Kappa owned 30,000 hectares (74,000 acres) in Venezuela, representing 35 percent of the group's Latin American landholdings.

"This represents a very small seizure," Eason wrote, adding that Latin America represents 15 percent of Smurfit Kappa's revenues.

Venezuela is South America's largest oil exporter, and large tracts in its fertile plains and hills were abandoned when the booming oil industry crowded out coffee and cocoa farms in the 1920s.

Chavez, who grew up in the countryside, has long-term plans to double the amount of land under cultivation in the vast South American country.

In the past Chavez has taken over big farms deemed idle and given them to small farmers. The land reforms have sparked violence, with dozens of peasant farmers murdered in the last few years. (Additional reporting by Fabian Cambero; Jonathan Saul in Dublin; Editing by Lisa Von Ahn and Gerald E. McCormick)

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