The agricultural giant Monsanto may well still be the world's most hated company. The company that brought the world Agent Orange, the defoliant of choice in the Vietnam War, followed up a decade ago with a strident push to flood the world with genetically modified crops. It alienated millions – and even its friends and rivals among GM supporters blamed Monsanto's belligerence for putting back the cause by many years. But I'm going to ignore GMs and talk about water. And belligerence.

In part, no doubt, to help salvage its GM-tarnished reputation, Monsanto now makes great play of its efforts to help engineer a second green revolution built around "sustainability".

Sustainability is a much-abused term and it infiltrates almost every corner of the company's website. But to be fair they do try and define what the word means for its business. The company promises that its "sustainable yield initiative" will "reduce by one-third per unit produced the aggregate amount of key resources such as land, water and energy, required to grow crops by 2030."

Many analysts now see water, rather than land, as the key limitation on growing food to feed a future world population of nine billion in the coming decades. So a third more crop for the same amount of water is a valuable goal. The company trumpets especially its work to engineer more water-efficient maize.

Of course, despite the company's public pledge to "share knowledge and technology" the company's corporate aim is to make sure that farmers buy Monsanto-patented water-efficient seeds by the trillion.

But you would expect Monsanto to be especially sensitive about how it manages water in its own farming operations, and particularly to show concern for how neighbouring farmers are facing up to water shortages. Wouldn't you?

The scene shifts to the Hawaiian island of Molokai. This is an old stomping ground of Monsanto's. It is the largest employer and the island is sometimes known as "the birthplace of biotechnology" and "the Silicon valley of the seed corn industry".

This is where Monsanto does a lot of its research into GM crops such as maize, and where it grows many of the seeds it sells to farmers round the world.

Nature on Molokai has suffered badly from the invasion of Monsanto and other big-farm companies. In recompense, Monsanto puts money into a Nature Conservancy programme on the island to "preserve biodiversity and protect water sources".

The company has nonetheless gained a bad reputation there as a water bully. As a local journalist wrote there last year in the Molokai Dispatch, "Monsanto's thirst for more water" threatens its future on the island. "Like most large corporations, Monsanto's number one priority is to maximise profits. In this case it means planting as many acres as possible, and using a lot of water," wrote Todd Yamashita.

Recently, during a drought that emptied reservoirs and forced the local irrigation company to demand 20% water cutbacks from all "non-homestead" users – that is, companies and some individuals (local farmers and householders were excluded from the cuts) – Monsanto was reported locally to have pressed the authorities for increased pumping from the Waikolo Valley, for which it proposed to pay the cost.

In law, two-thirds of the water from the Molokai irrigation system should go to homestead farmers. In practice big landowners, especially Monsanto, take 84% of the irrigation system's water consumption. Monsanto alone, according to Yamashita, takes almost twice as much water as all 200 homesteaders.

So I think I have this right. In the cause of developing crops that will allow the world's farmers to use less water, Monsanto is so overusing the water in its own backyard that local farmers are have resorted to legal action to get their water back. As the Molokai Dispatch's headline has it: "Monsanto could be its own worst enemy."

Monsanto may have had a PR makeover, with its website featuring wind mills and lots of happy farmers tending healthy and well-watered crops.

But the reality down on the farm doesn't seem to have changed so much.

• This article was amended 21 September 2009. The original said that Monsanto had lobbied for a new aquifer to be tapped. In fact, there is one aquifer supplying water from the Waikolo Valley. It was from that existing system that Monsanto sought additional pumping and offered to pay extra pumping costs. The original article also said that drought led to the local irrigation company demanding 20% water cutbacks from local farmers; the water company's cuts excluded householders and local farmers. This has been corrected.

• Responding to this Greenwash article, Monsanto states that its activities have been portrayed in a one-sided way. The comment thread has been reopened so that the company's response can appear. Please see below.