MADISON, Wis. (AP) _ An impoverished refugee woman's arrest for scavenging through garbage cans in search of recyclable items has angered advocates for the poor and raised questions about who has the right to turn trash into cash.

''The right to eat ... takes precedence over the city's right,'' said Karina O'Malley, director of a Green Bay homeless shelter and a member of a task force studying homelessness in Wisconsin. ''I don't see why the city has to pit itself against the poor.

''This is a way for them to eke out a living without panhandling.''

Ms. O'Malley was among those who criticized the arrest of Tru Vang, a 56- year-old Laotian Hmong refugee cited in August on charges of violating a new anti-scavenging ordinance in Madison.

The ordinance was enacted this year after the Wisconsin Legislature passed a law requiring all communities to recycle aluminum, paper, glass and other materials by 1995 to conserve dwindling landfill space.

The city attorney's office on Sept. 28 dropped the charges against Ms. Vang, who had faced a fine of more than $300, after Mayor Paul Soglin and several other city officials decried her arrest as a wrong application of the anti-scavenging ordinance.

The mayor said the law was aimed at people who might be tempted to pick up large amounts of recyclable material already sorted and bagged for the city's curbside recycling program - not at a poor person going through trash.

Although the charge was dropped, the incident embarrassed many in Madison, the state capital and home to the largest University of Wisconsin campus. This town of 170,000 prides itself on ethnic diversity, social concern and its strong opposition to the Vietnam war during the 1960s and '70s.

''We can give tax breaks to developers ... and AT&T, and then we find time to prosecute a woman for selling cans to supplement her welfare,'' Alderman Andrew Heidt complained during a recent city council meeting.

The clash between recycling interests and poor people looking through garbage cans to find aluminum cans or newspapers to recycle is inevitable, some say.

Communities that mandate recycling have an economic interest in ensuring that material set aside for recycling is collected by the city and sold to recycling outlets to finance the program's continuation.

''Everybody's seen the poor people with the shopping carts who do this (pick through garbage). In a way, they're providing a service to the public,'' said Pat Vanderburgh, assistant superintendent of the Milwaukee Rescue Mission, a homeless shelter in Milwaukee.

He predicted that organized recycling programs could reduce such people's income.

''As you have more recycling, you're going to have less recyclable material available to people who need to go through the garbage to make money,'' said state Rep. Spencer Black, one of the authors of Wisconsin's recycling law.

But Black said he believes the Madison ordinance is unnecessary if it applies to scavengers.

''This situation is different. I don't see any value in a law that stops people from recycling,'' Black said.

Some suggest that a creative solution exists.

Col. Leon Ferraez, a spokesman for the Salvation Army headquarters in Verona, N.J., advocates programs that pay poor people for recycling by picking up garbage no one wants.

''There should be a way to bring both sides together - recycling material and recycling lives,'' Ferraez said.

Others predict there will always be enough recyclable trash for the poor but municipalities may not have the business sense to use recycling as an economic development tool for everyone.

''Why should counties re-create the wheel when there are people who need to make ends meet that are capable of working in programs that can serve the community?'' said Dave Hurd, a recycling specialist for a New York City concern that pays for garbage collection and provides recycling services to businesses with trash disposal and recycling problems.