WASHINGTON - MONSANTO hailed on Wednesday a significant step in creating a drought-tolerant corn to be available as early as 2010, in a move decried as 'misleading' by a public health watchdog.

The genetically modified (GM) corn, which Monsanto says will 'reset the bar' in farming productivity, has moved to the fourth and final stage of development and could reach commercial usage within two years, the company said.

'Drought-tolerant corn is designed to provide farmers yield stability during periods when water supply is scarce by mitigating the effects of drought - or water stress - within a corn plant,' Monsanto said in a statement.

By some accounts, however, the corn's real-world benefits are negligible.

'With GM crops there's a tremendous amount of hype and misinformation,' said Bill Freese, a science analyst at the Washington-based Centre for Food Safety, an environmental and public health organisation.

The drought-tolerant corn is the first in a series of crops to be released over the next decade that aim to enable 'farmers to produce more on each acre of farmland while minimising the input of energy and resources such as water,' Monsanto said.

But the seed manipulation needed to create drought-tolerance comes at a huge cost, according to Mr Freese.

'They're finding the corn that does a little bit better under drought conditions does a lot worse than other varieties when rainfall is adequate,' he said.

As such, he said, the drought-tolerant crop is 'trading off yield under good conditions for marginal improvement under drought conditions. And that's a huge issue they haven't come near to overcoming.'

But Michael Wach, head of Science and Regulatory Affairs at the Biotechnology Industry Organisation, argued it would be untenable for a company to develop a GM crop for commercial use that only performs under a narrow set of circumstances.

'As a product nears final commercialism the developer tests that product under a wide variety of climatic circumstances and wide variety of locations, over years, so they can tell the grower, look, it's going to grow well for you in your area,' he said.

Monsanto said trials of its corn conducted last year in the drought-prone American midwest 'met or exceeded the six per cent to 10 per cent target yield enhancement.' 'This product and other yield improvements we are developing will reset the bar for on-farm productivity,' said Monsanto biotechnology chief Steve Padgette.

How much the developments could benefit farmers in drought-prone developing countries is debatable, said Mr Freese.

And even if 'technical feasibility issues were overcome, the seeds with GM traits in them would still remain prohibitively, extremely expensive,' he said.

Almost all the world's GM crops are planted in developed countries, he noted, with more than 70 per cent being grown in just two countries, the United States and Argentina.

Most GM crops able to withstand environmental stress - such as lack of water - are not geared toward developing countries, he said, whose subsistence farmers face daily battles with climate change and rising global food prices.

Indeed, most GM crops are used as animal feed to supply rich nations with meat, noted Mr Freese.

A GM crop able to cope under different circumstances would be beneficial for farmers in developing countries, Mr Wach argued however.

'No matter where you are in the world, having a plant that can withstand (environmental stresses) is a good thing,' he said.

'When you are at the whims of the environment, then having those sort of crops can make the difference between having a crop that feeds you and your family, or feeding you and your family and having some left over, or having nothing at all.'

Monsanto's product, created in collaboration with the German-based plant biotechnology specialist BASF, has been submitted to the Food and Drug Administration for regulatory clearance. -- AFP