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Troubles cloud over Monsanto Company’s (MON - Analyst Report) European operations, as the French government expressed its intention to continue its ban on the genetically modified (GM) corn crops in 2012.

Despite a ruling from France's top administrative court--ordering the lifting of the ban in November 2011-- France intended to maintain its ban on the domestic cultivation of genetically-modified corn MON810 in 2012 on strong environmental issues.  Keeping up with this intent, Environment Ministry of France has reportedly asked EU—for suspension of Monsanto GM corn approval for 2012, of late.

Since February 2008, the use of U.S. agricultural-biotech company Monsanto Co.'s MON810 corn variety has been banned by the French government on the grounds of health and environmental risks.

At the end of November 2011, the Conseil d'Etat administrative court ordered the ban lifted, ruling on a case brought by Monsanto and other companies, opposing the French agriculture ministry's ban on MON 810 corn.

 However, recent scientific studies indubitably confirmed environmental hazards, which may be affixed with the planting of the specified variety. Hence, of late, the French environment ministry asked European Commission to suspend authorization to plant Monsanto's genetically modified MON810 corn.

MON810 corn was the only crop to have been granted permission for planting in the European Union, despite losing European and French court rulings. The seed patent for corn MON810 is owned by U.S.-based agro-biotech firm Monsanto Company, the leading global provider of agricultural products--operating in Seeds and Genomics and Agricultural Productivity segments.

Monsanto’s biotechnology research and innovations position it as a market leader above its peers, such as Syngenta AG (SYT - Analyst Report) and The Dow Chemical Company (DOW - Analyst Report). The company maintains a strong cash position in the first quarter 2012, with net cash provided by operating activities recorded at $1,110 million versus $624 million, a year ago. Free cash flow increased to $856 million during the quarter ended November 30, 2011 compared with $500 million reported a year ago.

We currently maintain a long-term Outperform recommendation on the stock. Monsanto has a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).

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