Monsanto (NYSE:MON) has been a major investor in genetically modified (GM) crops, and that investment has generated a lot of green for the company. In the U.S., the largest market for the agricultural technology outfit, it has grown its share in corn seeds in particular, so now it's the market leader with a 51% share. It's an impressive business -- Monsanto's corn seed and traits segment brought in $1.08 billion in sales in the first six months of this fiscal year.

But two of the company's rivals, Syngenta (NYSE:SYT) and DuPont (NYSE:DD), have recently formed an alliance to counteract Monsanto's dominance. This step, when viewed in light of other developments, suggests that Monsanto will have a tougher time keeping its perch as the world leader of agricultural biotechnology.

Syngenta and DuPont announced earlier this week that they will pool their genetic traits for corn and soybeans in a 50/50 joint venture known as GreenLeaf Genetics LLC. The venture will offer out-licensing for various genetic traits to seed companies in the U.S. and Canada. In addition, the companies agreed to cross-license technology so that Syngenta will get rights to DuPont's Optimum GAT, which, like Monsanto's Roundup Ready trait, makes crops tolerant to insecticides, while DuPont will get access to Syngenta traits for insect resistance.

Even as Monsanto's rivals team up to challenge its leadership in the U.S., Monsanto's potential for expansion is being stymied by the European Union. The European Commission recently proposed making the approval process for GM crops even tougher. It seems that for the foreseeable future, Monsanto will have to rely on U.S. sales, and with the new alliance, the competition just got tougher.

Meanwhile, Syngenta recently announced that it's pumping up its efforts to find new innovations in plant technology. The European firm recently launched a $100 million fund to invest in companies involved in such areas as crop technology and protection.

Neither Syngenta and DuPont's alliance nor Syngenta's investment plans signals a death knell for Monsanto, but Monsanto is now looking at a more level playing field in the U.S., even as its potential for expansion remains checked by ongoing concerns over GM organisms.

Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.