By Maggie Fox, Health and Science Correspondent , Reuters

WASHINGTON, July 1 (Reuters) - The U.S. government needs to help its citizens reduce their exposure to dioxins, in part by encouraging healthy eating, an expert panel said on Tuesday.

It should limit and test for dioxins in farm animals, feed and crops, the Institute of Medicine panel said.

Dioxins are a widely found byproduct of many industries and they may cause cancer and other health problems by disrupting hormone production.

Since their health effects were discovered in the 1970s, dioxin production has plummeted. But they persist in the environment and build up in fatty tissues and fatty products -- meaning they can stay in the body for a lifetime.

They build up in the bodies of farm animals that eat contaminated feed or grass and drink contaminated water. Fatty foods such as meat and full-fat milk carry the highest levels of dioxins.

The U.S. government should do more to reduce people's risk of eating these potentially dangerous chemicals, a panel of experts appointed by the Institute of Medicine said.

"Since fetuses and infants are especially sensitive to the effects of toxic compounds, one part of the government's action plan should be an effort to reduce girls' and women's exposure to dioxins in foods during the years well before childbearing, so that less of these compounds accumulate in their bodies and are passed on through the placenta and breast milk," the Institute said in a statement.

"To reduce dioxin exposures in all children -- especially girls -- government-sponsored food programs, such as the National School Lunch Program, should increase the availability of foods low in animal fat," it added.

The Institute, one of the National Academies of Sciences, advises the federal government on medical matters. It appoints independent panels of experts for its reports.

The Institute said dioxin levels in the environment have fallen by as much as 76 percent since the 1970s, according to some measurements. Their levels have also decreased in foods.

"Because the risks posed by the amount of dioxins found in foods have yet to be determined, we are recommending simple, prudent steps to further reduce dioxin exposure while data are gathered that will clarify the risks," said Robert Lawrence, associate dean of the Bloomberg School of Public Health at Johns Hopkins University in Baltimore, who chaired the committee.

These include testing forage and feed for dioxins and establishing accepted levels of the chemicals and restricting the use of animal byproducts in agriculture.

The government should set limits and test for dioxins in the human food supply, including food products, dietary supplements, and breast milk.

Crops that may have had contact with possibly contaminated soil must be washed and the government should encourage people to eat less fat and meat.