Once one of the nation’s top chemical companies, Monsanto spent the past three years on a merry-go-round of changes in focus, direction and management. Its identity crisis led to a two-year fling with pharmaceutical giant Pharmacia Corp. (now Pfizer Inc.), acquisitions of major agricultural seed brands Asgrow and DeKalb, a stunning success with its farm weed-killer Roundup, and eventually a foray into the growing but controversial field of genetically modified crops.

Now, under the management of former COO Hugh Grant -- elected president and CEO five-and-a-half nervous months after the departure of Hendrik A. Verfaillie last December -- and finally independent of Pharmacia, St. Louis-based Monsanto is articulating a clear, new vision of itself for the future. Its emphasis will be on seeds rather than chemicals. So far, the new plan is working, and the stock market has applauded.

Monsanto nearly doubled its second-quarter earnings, handily beating Wall Street estimates. Its seeds and genomics sales more than doubled, while overall sales rose 8 percent. Its stock, already at a heady price-earnings ratio of 52, jumped further. After years of contraction, annual sales appear headed for a gain in 2003.

But on the heels of its best quarter in recent memory, Monsanto swallowed bad news.

A Banc of America analyst estimated the company might face pollution liabilities from its former chemical business amounting to as much as $2.3 billion.

The gloomy prediction was based on an announcement by Solutia Inc., the chemicals business spun off by Monsanto in 1997, that it can't pay the cleanup costs and other claims arising from the dumping of toxic waste near Anniston, Ala. It's alleged that over a period of 40 years, until 1971, Monsanto discharged thousands of pounds of polychlorinated biphenyls, industrial pollutants that have been linked to cancer, into Snow Creek.

Solutia was found liable in February of 2002. If Solutia cannot pay the damages awarded, liability will roll over to Monsanto, the St. Louis Post-Dispatch reported last week.

Banc of America lowered the company’s rating from “buy” to “neutral.”  Other securities analysts piled on with their own downgrades. The stock sagged, but didn't collapse. It's now selling around $21, down 10 percent from its 52-week high in late July.

And Snow Creek may not be all. There's also a breach-of-contract suit from former acquisition target Delta & Pine Land Co., and in March the U.S. Department of Justice announced that it was investigating Monsanto to determine whether it used marketing techniques for its herbicides that violated U.S. antitrust law.

Public uncertainty about the safety of genetically modified crops adds yet another challenge, some researchers have said, though so far that affects only the company's foreign business.

But beyond these headaches lies a blossoming corporate focus on the “seeds and traits” wing of the business. Monsanto’s seed business consists primarily of corn, under the DeKalb brand, Asgrow brand soybeans, and cotton, as well as designing genetically engineered seeds with a variety of traits, including ubiquitous Roundup Ready crops which are resistant to the company’s herbicide.

The company's major step in this direction was its acquisition of DeKalb Genetics Corp., formerly DeKalb AgResearch, in DeKalb, for both development and distribution of seeds. Monsanto's agricultural products became the majority of its business in 1999.

The next year Monsanto merged with drug maker Pharmacia & UpJohn Inc., which took control of Monsanto's G.D. Searle pharmaceutical business, and the current Monsanto Co. was incorporated as a Pharmacia subsidiary in October 2000.

The new Monsanto went public through an initial public offering in October of 2000, although Pharmacia retained control until it executed a spinoff to shareholders in August 2002.

Since then, the independent Monsanto's prospects, and its stock, have moved slowly upward,as Monsanto has broken away from its former dependence on herbicide sales, and begun to develop the potential of its seed and genomics business.