Many people like to consider Monsanto (NYSE:MON) part of the brave new world of biotech. However, the company has long been shrouded in controversy, and there could be more in store.

Several recent news headlines referring to its genetically modified products should give investors some reason to contemplate the risks that face this company.

Consumer sentiment against Monsanto's artificial-growth hormone, Posilac, seems to be increasing. Not only have many dairy co-ops notified their farmers that they want an increasing supply of rBST-free milk, but Starbucks (NASDAQ:SBUX) recently said it was also bowing to consumer pressure and discontinuing the use of dairy produced with the substance.

Monsanto's latest 10-K disclosed: "We believe low milk prices and some processor requests for 'r-BST-free' milk are limiting our future sales" of Posilac. While Posilac doesn't represent a significant chunk of Monsanto's overall business, it's an interesting change in tune for the company.

Also, a federal judge has blocked Monsanto's genetically modified alfalfa, ordering that sales of the seed be halted and banning planting of the crop after March 30. The judge stated that the manner in which such crops have been approved by regulators has been a "cavalier" approach. Yep, the lack of an environmental impact statement before approval does sound pretty cavalier. (In fact, it's more than cavalier -- this actually violated the law, according to the judge.)

And, of course, environmental activist organization Greenpeace said recently that data shows that a strain of Monsanto's genetically modified corn has shown toxicity in rats, and some researchers have said GM potatoes are linked to cancer in the rodents.

These are the kernels of a controversy with no easy answers -- but I've got one that is simple enough for the way I feel about it: Monsanto's too risky for my money.

Critical masses
Fans of genetically modified crops contend that there is no scientific evidence that the practice yields crops that are any different from conventionally grown ones. And of course, the blessing of regulatory agencies like the FDA and USDA gives more credence for their standpoint.

Critics aren't so sure about the safety of genetic modification. They contend that not enough time has elapsed for them to truly know what the ultimate implications might be in terms of the environment or human health. Some believe that the influx of GM corn and soybeans has contributed to increased allergies in our population. (Soybeans and corn are in a lot of processed foods -- for example, high-fructose corn syrup is an extremely prevalent sweetener and preservative because of its low cost.) Some contend that perhaps these foods may contribute to cancer.

Last but not least, the ease with which genetically modified crops can cross-pollinate into conventionally grown crops could endanger genetic diversity. And many fear that since Monsanto has patents on its technology, it could force unwitting farmers to pay up if its strains show up in their crops even by accident.

Meanwhile, Europe has historically been very averse to genetically modified organisms (GMOs) in its food supply. There's also the organic movement, which is gaining increased interest in the U.S., too -- and certified organic foods, by definition, do not include GMOs.

When consumers don't comply
Monsanto and its fans seem to sniff at the lack of scientific discrimination in some consumers' distaste for some of these products, calling it the effect of deceptive marketing. However, I find that an ironic stance in the grand scheme of things. First of all, Monsanto may be dismayed, but it probably shouldn't be surprised that consumers react to its products with distrust. (Monsanto's already a poster child for left-wing scrutiny of big corporations, although companies like Halliburton (NYSE:HAL) share the spotlight.)

The manner in which genetically modified crops have been introduced into the American food supply doesn't exactly elicit confidence. I get frustrated when I see references to the U.S. as a market that's open to genetically modified foods -- if by "open," one means "greeted with open arms by corporations and regulators," then sure. Surveys last year revealed that many American consumers didn't even know GM foods were already on grocery shelves, and I can only imagine that many still don't.

Corporations haven't been amenable to labeling their products as containing GM ingredients; if there was every reason to believe that these crops are safe, the right thing to do would be to label them as such and launch public education campaigns, perhaps. Given the stealthy way these crops have been introduced here in the States, is consumer distrust that surprising?

As for the regulatory argument, history shows that sometimes time will tell. Merck's (NYSE:MRK) Vioxx was approved by the FDA, and it was a common medication until deadly side effects came to light. Evidence that the company went out of its way to hide the risk of cardiovascular problems associated with the drug gave lawsuits credibility. And of course, how long did the tobacco companies insist there was no proof there was anything risky about their products?

Even if the only reason for a consumer backlash against a technology like genetic modification or cloning is that consumers deem it distasteful, unnatural, or suspicious, that's just part of the risk of the marketplace, isn't it? It's unreasonable to force consumers to choose a product that doesn't appeal to them. Whole Foods Market (NASDAQ:WFMI) is a good example of a company that has capitalized on many consumers' decisions to switch to organics (it has advocated for labeling of GM ingredients, too). Obviously, there's plenty of demand for such choices. Companies that sniff about consumers' unscientific approach risk sounding like they're all about sour grapes.

Corporate culture shock
Last year, I wrote a commentary about Monsanto, wondering if maybe there's something unsavory in its corporate culture, given its history of controversies -- not to mention what appear to be cozy relationships with high-ranking government officials and regulators. I doubt consumers can be blamed for wondering if this is a company where the unspoken motto is the Machiavellian "the end always justifies the means."

Perhaps critics' fears about GMOs will prove unfounded, but given the big risks pertaining to possible regulatory changes and stepped-up oversight -- not to mention signs of increasing consumer backlash -- Monsanto strikes me as a risky investment.

Of course, regardless of any of these news headlines, investors remain excited about Monsanto's possibilities and seemingly unfazed by negative headlines or criticism of some of its business practices. It's not like any negativity has made it a beaten-up value -- Monsanto shares are up 26% this year alone, and its P/E is 42; over the past five years, its shares have appreciated 235%. And of course, it would be remiss not to mention that there are ancillary trends at work here, such as the interest in corn-based ethanol. Also, Monsanto just announced a partnership with BASF to develop more genetically modified crops, notably for the hot biofuel area, which CEO Hugh Grant described as akin to connecting a "fire hose" to the company's pipeline.

Fire hoses sure can come in handy -- sometimes, of course, to put out fires. Do what you will, but this Fool prefers investments with less bad mojo than Monsanto.

For related Foolishness, see some commentary from last year:

Whole Foods Market and Starbucks are Motley Fool Stock Advisor recommendations. To find out what other companies David and Tom Gardner have recommended to subscribers, take a free 30-day test drive.

Alyce Lomax owns shares of Whole Foods Market and Starbucks. Merck is a former Income Investor pick. The Fool has nothing to hide -- it's got a disclosure policy.