Biotech companies are racing against each other to develop new strains of corn and other crops that can thrive when water is in short supply.

The global giants like Pioneer, Monsanto and Switzerland's Syngenta AG are the ones who are leading the research, says a news report .

According to Bill Niebur, global vice president for research and development at Pioneer, a division of DuPont, equipping plants to maintain productivity in the driest years is of critical importance.

'Drought is a global problem and we recognise the threat that comes with climate change. We've got our top talent in our organization working on this,' he added.

Water shortages are already costing billions of dollars a year in crop shortfalls around the world, and are likely to grow more costly, according to academic and government forecasters.
  
Two years ago, drought ate into corn production in France and Spain so severely that analysts pegged it as the worst in fifty years. 

The US corn production was worst hit which went down five per cent because of drought in 2006. In Australia, where drought has persistent since 2002, some wheat farmers last year reported failing to harvest a crop for the first time in 40 years, the report said.
   
And in Argentina, which grows about 22 million tonnes of corn a year, drought has delayed planting of the current crop.
   
Last December, Jacques Diouf, the head of the UN Food and Agriculture Organization, warned that people were already starting to go hungry in poor countries because hotter weather was shrinking the food supply and pushing up prices, the report said.   
 
Biotechnology companies are using both conventional breeding and genetic engineering to mold climate change into a market opportunity, it noted.
   
Monsanto, the world leader in genetically engineered crops, is doing field trials in dry parts of Kansas, Nebraska and South Dakota. Switzerland's Syngenta AG has a variety of research sites across the United States.
   
Corn is the first focus for all the companies because not only is it a key raw material for a multitude of processed foods, but also it is a major animal feed and it is in growing demand to make ethanol for use in alternative fuels.
   
The world grows nearly 800 million tonnes of corn a year, with about 40 per cent of the world's supply grown in the United States and 19 per cent in China.
   
St Louis-based Monsanto, which spends about 10 per cent of its annual sales on research and development, or about $2 million a day, sees drought-tolerance as a key area.
   
'Water is one of the biggest limiting factors in agriculture. In the future, climate change does mean there are going to be more droughts,' said a Monsanto company official.