KANSAS CITY, Missouri (Reuters) - Monsanto Co said Wednesday it filed for U.S. regulatory approval for what could be the world’s first drought-tolerant corn, a product that agricultural companies around the globe are racing to roll out amid fears of global warming and the needs of a growing population.

Monsanto said it submitted its product to the U.S. Food and Drug Administration for regulatory clearance. It is working with German-based BASF on the project.

The two companies are jointly contributing $1.5 billion to a venture aimed at developing higher-yielding crops and crops more tolerant to adverse environmental conditions, such as drought, which has eroded production in countries around the world in recent years.

“It’s been everybody’s dream to have a drought-tolerant crop,” said Iowa State University agronomist Roger Elmore, though he pointed out advantages would vary widely depending on geography.

Iowa, the largest U.S. corn-producing state, for instance, does not typically suffer severe drought. Last year, Iowa corn suffered from too much rain.

Monsanto said its first-generation drought-tolerant corn was in the final phase of development and should be launched early in the next decade.

The 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.

U.S. field trials conducted last year met or exceeded the 6 percent to 10 percent targeted yield enhancement, equal to about 7 to 10 bushels per acre, over the average yield of 70 to 130 bushels per acre, Monsanto said.

“The advancement of our drought-tolerant corn product... is one of our most significant R&D milestones,” said Monsanto biotechnology spokesman Steve Padgette.

Pioneer Hi-Bred International, a unit of DuPont, has a drought-tolerant corn in field trials that it plans to bring to market in the 2010-2011 time frame, said spokesman Pat Arthur. Because it is not genetically modified, it does not need regulatory approval, he said.

Syngenta is also aiming to bring a drought-tolerant corn to market by 2012.

The companies are using multi-pronged approaches that involve both conventional as well as biotech breeding, including transferring genes from microbes or from other plants.

The idea is to grow plants with stronger, longer roots that can extract more water from the soil, develop plants that more effectively conserve water in the above-ground stalk and leaves, and also to change the way the plant develops so that water can be directed more toward grain development than leaf development, for instance.

Drought-tolerant corn is one of many Monsanto products under development. Others include higher-yielding genetically altered soybeans, insect-resistant corn products and herbicide-tolerant cotton products.