Corn engineered by Monsanto Co. to be tolerant to drought may not be the "magic bullet" for solving the agriculture industry's water challenges, a new report by the Union of Concerned Scientists claims.

According to the report, Monsanto's DroughtGard corn variety produces only small reductions in crop losses during drought conditions and does nothing to reduce corn's water requirements. The report says traditional breeding techniques and better management systems are more helpful for increasing drought tolerance.

"Farmers are always looking to reduce losses from drought, but the biotechnology industry has made little real-world progress on this problem," said Doug Gurian-Sherman, a senior scientist with UCS and the author of the report. "Despite many years of research and millions of dollars in development costs, DroughtGard doesn't outperform the nonengineered alternatives."

Although several genetically engineered varieties have been tested in field trials, DroughtGard is the only drought-tolerant engineered crop to receive federal approval to be grown in the United States.

Monsanto inserted a cspB gene, also known as a "cold shock gene," into the corn to stabilize the molecules that code for proteins under environmental stresses. According to marketing material from Monsanto, the technology is meant to make corn yields more stable in low-water environments.

For its report, UCS analyzed the data that Monsanto provided in 2009 to the U.S. Department of Agriculture in its petition for approval, which was granted in December of last year. The nonprofit also says it analyzed studies on genetic engineering drought tolerance and breeding and looked at USDA's data on field studies of drought-tolerant GE crops, of which there were 90 last year.

UCS says the cspB gene that Monsanto inserted into DroughtGard corn improved drought tolerance by about 6 percent over nonengineered crops.

Traditional breeding practices and better management practices, on the other hand, have improved corn's drought tolerance by about 1 percent a year over the last several decades, making them two to three times as effective as GE crops, the UCS report says.

"The overall prospects for genetic engineering to significantly address agriculture's drought and water-use challenges are modest at best," the report says.

The report also found that the genetically engineered crops use just as much water as crops not designed to be drought-tolerant.

Their reach is also limited, UCS said. DroughtGard can be planted on only about 15 percent of U.S. corn acres, meaning it would increase corn productivity by 1 percent, about the same as what conventional breeding can do.

"The fact that DroughtGard may provide modest drought tolerance is a small step forward for the industry, but it's being outpaced by other methods," Gurian-Sherman said. "More farm bill investments in public-sector classical breeding and water-saving farming practices would be more cost-effective for taxpayers and farmers."

On its website, Monsanto predicted that during the 2012 growing season, about 250 growers in the Western Great Plains region would plant DroughtGard in field trials on about 10,000 acres.

Monsanto today responded to the UCS report with a statement on the benefits of DroughtGard.

"DroughtGard Hybrids can help farmers mitigate the risk of yield loss when experiencing drought stress, and DroughtGard Hybrids performance in drought-stressed conditions has demonstrated an advantage over competitor products," the company said in an emailed statement. "Specifically, hybrids with the drought trait can use less water during drought stress and have more kernels per ear."

Monsanto hopes to commercially roll out the variety as early as next year, depending on foreign regulatory approvals.