Company Name: Monsanto Co.
Public Availability Date: October 5, 2006

Document Sections:

INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

September 15, 2006

Securities and Exchange Commission

Division of Corporation Finance
Office of the Chief Counsel
450 Fifth Street, N.W.
Washington D.C. 20549

Re: Monsanto Company Shareholder Proposal Submitted by John C. Harrington

Ladies and Gentlemen:

We are acting as special counsel to Monsanto Company ("Monsanto" or the "Company") in connection with the matter set forth in this letter. We submit this letter on behalf of Monsanto pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

On August 1, 2006, Monsanto received a shareholder proposal (the "Proposal") from Mr. John C. Harrington of Harrington Investments, Inc. (the "Proponent") for inclusion in the proxy statement on Schedule 14A (the "Proxy Statement") to be distributed in connection with Monsanto's 2007 Annual Meeting of Shareowners (the "Annual Meeting"). The Proposal calls for shareowners to adopt a mandatory bylaw stating that directors shall be liable to the Company or its shareowners for any breach of fiduciary duty "relating to matters of the environment or human rights affected by the Company," and limits indemnification for such breaches. A copy of the Proposal and the accompanying supporting statement is attached hereto as Exhibit A.

We respectfully request that the staff (the "Staff") of the Securities and Exchange Commission (the "Commission") confirm that it will not recommend any enforcement action if Monsanto excludes the Proposal from the Proxy Statement in reliance on Rule 14a-8(i)(1), Rule 14a-8(i)(2), or Rule 14a-8(i)(6) promulgated under the Exchange Act, for the reasons set forth below.

Pursuant to Rule 14a-8(j), by way of this letter, the Company hereby submits its reasons for excluding the Proposal no later than 80 days before it expects to file the definitive form of its Proxy Statement with the Commission. While the Company has not yet determined the definitive date of its Annual Meeting, the Company currently expects the meeting to take place in mid-January 2007, and it expects to file definitive proxy materials on or about December 6, 2006. Monsanto has notified the Proponent by copy of this letter of its intention to omit the Proposal from the Proxy Statement.

THE PROPOSAL

The Proposal asks Monsanto's shareowners to adopt a mandatory amendment (the "Proposed Bylaw") to its Bylaws (as amended, the "Bylaws") by inserting a new Section 59(h) to read as follows:

Notwithstanding other provisions of these by-laws, a director of the Corporation shall be personally liable to the Corporation or its stockholders for any breach of fiduciary duties of loyalty, good faith, care or oversight found to exist under Delaware Law, relating to matters of the environment or human rights affected by the Company, and the Corporation shall not indemnify such director for any liabilities except to the extent such indemnification may be required by Delaware Law. This provision shall be effective immediately upon approval by the shareholders, except that (a) any changes in the scope of Board members' liabilities shall only become effective in the event that the Board revises the Certificate of Incorporation to reflect these changes as requested by the shareholders, and (b) furthermore, changes in liability and indemnity limits shall become applicable to an individual director as his or her position and contract is established or renewed. This amendment shall not adversely affect any right or protection of a director existing with respect to any act or omission occurring prior to such amendment. In the event of a conflict between this provision and other corporate governance documents, applicability shall be determined pursuant to the law of Delaware.

The supporting statement for the Proposal is as follows:

It is the intent of proponents to ensure that a director is personally accountable, and is not indemnified, if such director breaches fiduciary duties to the corporation in relation to matters of the environment or human rights. Therefore shareholders further intend and request that the Board revise, or seek revisions, to the Certificate of Incorporation, the Charter of the Board of Directors, and any other elements of corporate policy to ensure consistency with this By-Law amendment.

Monsanto is a Delaware corporation, and it is subject to the General Corporation Law of the State of Delaware (the "DGCL"). Section 59 of Monsanto's Bylaws relates to the indemnification of directors, officers and other fiduciaries of the Company. The Bylaws provide, among other things, that the Company shall indemnify such directors, officers and fiduciaries to the fullest extent permitted by applicable law (Section 59(a)); that the Company shall advance expenses incurred in defending against claims for breach of fiduciary duty (Section 59(b)); that the rights conferred under Section 59 of the Bylaws shall not be exclusive of any other rights which an indemnified person might have under statute, the Charter, other provisions of the Bylaws, agreement, vote of shareowners or disinterested directors, or otherwise (Section 59(f)); and that any repeal or modification of Section 59 shall not adversely affect any right or protection thereunder of any person with respect to any act or omission occurring prior to or at the time of such repeal or modification (Section 59(g)). A copy of the Bylaws is attached hereto as Exhibit B.

ANALYSIS

A shareowner proposal may be omitted under Rule 14a-8(i)(1) if it is not a proper subject for action by shareowners under applicable state law and under Rule 14a-8(i)(2) if it would, if implemented, cause the issuer to violate applicable law. We believe that the Proposal may be omitted for these reasons. We have attached hereto as Exhibit C the legal opinion of Richards, Layton & Finger, P.A., Monsanto's Delaware counsel, to the effect that the Proposed Bylaw, if adopted by the shareowners, would be invalid under Delaware law (the "Delaware Opinion"). In addition, we submit that the Proposal may be omitted under Rule 14a-8(i)(6) because the Company would lack the power or authority to implement it if it were adopted by the shareowners.

The Proposed Bylaw Conflicts with the Company's Charter

The bylaws of a Delaware corporation "may contain any provision, not inconsistent with law or with the certificate of incorporation, relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its stockholders, directors, officers or employees." 8 Del. C. §109(b) (emphasis added). The Delaware Supreme Court has made clear that "[w]here a by-law provision is in conflict with a provision of the charter, the by-law provision is a 'nullity.'" Centaur Partners, IV v. Nat'l Intergroup, Inc., 582 A.2d 923, 929 (Del. 1990) (quoting Burr v. Burr Corp., 291 A.2d 409, 410 (Del. Ch. 1972). The Delaware Court of Chancery has similarly concluded that "a by-law which is in conflict with a provision in a certificate of incorporation is invalid." Essential Enterprises Corp. v. Automatic Steel Products, Inc., 159 A.2d 288, 289 (Del. Ch. 1960); see also Pricket v. American Steel & Pump Corp., 253 A.2d 86, 88 (Del. Ch. 1969).

The Proposed Bylaw conflicts with Monsanto's Amended and Restated Certificate of Incorporation (the "Charter"), and would thus be invalid under Section 109(b) of the DGCL. Article IX of the Charter reads in relevant part: "A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended." A copy of the Charter is attached hereto as Exhibit D.

The Proposal is in clear conflict with the Charter. Under Delaware law, the certificate of incorporation of a corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for a breach of fiduciary duty, except "(i) [f]or any breach of the director's duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under §174 of [the DGCL, relating to unlawful dividends, stock purchases and redemptions]; or (iv) for any transaction from which the director derived an improper personal benefit." 8 Del. C. §102(b)(7). In accordance with Section 102(b)(7), the Charter exempts directors from any liability to the Company or its shareowners for damages for all breaches of fiduciary duty other than those specifically set forth in that provision. The Proposed Bylaw creates liability for damages for additional breaches of fiduciary duty, beyond those required by law, and so directly contradicts the Charter. Under the Charter, a director who breaches his duty of care with respect to environmental or human rights matters (without any breach of the duty of loyalty, bad faith, intentional misconduct or improper personal benefit) will not be liable to the Company for damages, but the Proposed Bylaw purports to create the opposite result.

The Proponent's Efforts to Avoid Conflict with the Charter Fail

Perhaps recognizing that the Proposal conflicts with the Charter, the Proponent has included language in the Proposal and the supporting statement apparently intended to avoid this conflict. None of this language, however, succeeds in rendering the Proposed Bylaw valid.

First, the Proposed Bylaw provides that "any changes in the scope of Board members' liabilities shall only become effective in the event that the Board revises its Certificate of Incorporation to reflect these changes as requested by the shareholders." We submit that a bylaw provision inconsistent with the Company's Charter cannot be made valid merely by acknowledging the inconsistency: a bylaw that is inconsistent with the certificate of incorporation is a "nullity," void ab initio. See Centaur Partners, IV, supra; Prickett, supra.

In any case, the Proposed Bylaw cannot become effective when "the Board revises its Certificate of Incorporation": under Delaware law, the board of directors may not "revise" the Charter, even at the request of the shareowners, without submitting any proposed amendment to a vote of the shareowners. 8 Del. C. §242(b)(1). Thus even if a bylaw inconsistent with the Charter could be made valid by delaying its effectiveness until the Charter is amended, the Proposed Bylaw still fails to do so: the Board cannot amend the Charter unilaterally, as called for by the Proposal. See Xerox Corporation, 2004 SEC No-Act. LEXIS 356 (Feb. 23, 2004) (allowing exclusion of a shareholder proposal under Rules 14a-8(i)(2) and 14a-8(i)(6) because it called upon the board to amend the issuer's certificate of incorporation, which under state law could only be done "upon authorization thereof by the board of directors initially, followed by approval thereof by the shareholders"); Burlington Resources Inc., 2003 SEC No-Act. LEXIS 180 (Feb. 7, 2003) (allowing exclusion of a shareholder proposal "request[ing] that the Board of Directors amend the certificate of incorporation," because the DGCL does not permit the board of directors of a corporation to amend the certificate of incorporation unilaterally).

Next, the Proposed Bylaw states that "In the event of a conflict between this provision and other corporate governance documents, applicability shall be determined pursuant to the law of Delaware." This tautological statementall internal affairs of Monsanto, including governance issues, are governed by the law of Delaware, see Edgar v. MITE Corp., 457 U.S. 624, 645 (1982); Examen, Inc. v. VantagePoint Venture Partners 1996, 873 A.2d 318 (Del. Ch. 2005)does not prevent the Proposed Bylaw from conflicting with the Charter. All that it does is acknowledge the fact that, in case of such a conflict, the Proposed Bylaw will be invalid. In Pennzoil Corp., 1993 SEC No-Act. LEXIS 503, *4 (Mar. 22, 1993), the issuer noted: "By inserting the words 'to the extent permitted under Delaware law,' [the proponent] attempts to avoid the necessity to cure defects in the text of the by-law ... by adding a savings clause the effect of which would be to make indeterminate what the actual by-law would include." Much the same could be said of the current Proposal¹: the Proponent attempts to avoid a conflict with the Charter simply by stating that there will not be any conflict. In Pennzoil, the Staff rejected this attempt and allowed the issuer to omit the shareholder proposal, and we ask that the Staff do the same here. Similarly, in AlliedSignal, Inc., 1999 SEC No-Act. LEXIS 104, *4 (Jan. 29, 1999), the proponent suggested revising his proposed bylaw (which conflicted with the issuer's certificate of incorporation) to include the words "to the maximum extent permissible by State Law." Once again, the Staff allowed the issuer to omit the proposal despite the attempted revision.

Finally, the supporting statement accompanying the Proposal states that "shareholders further intend and request that the Board revise, or seek revisions, to the Certificate of Incorporation, the Charter of the Board of Directors, and any other elements of corporate policy to ensure consistency with this By-Law amendment." As a technical matter, this purported intent of the "shareholders" is not part of the Proposal itself, and therefore would not be submitted for a vote at the Annual Meeting. Thus, if the Proponent means to include an advisory proposal asking the board to consider an amendment to the Charter, he has failed to do so.² Moreover, even if the Proponent submitted such a proposal and it received the support of the shareowners, the Charter would not be amended automatically: as described above, any amendment to the Charter would require action by the board and subsequent action by the shareowners. Unless and until such an amendment to the Charter were adopted, the Proposed Bylaw would be invalid.

The Proposal May Be Excluded From the Proxy Statement

Because shareholders of a Delaware corporation may not validly adopt a bylaw that conflicts with the corporation's certificate of incorporation, Centaur Partners, IV, 582 A.2d at 929, the Proposal is not a proper subject for action by shareholders under Delaware law and so may be excluded from the Proxy Statement pursuant to Rule 14a-8(i)(1) under the Exchange Act. In addition, because the proposal would, if implemented, violate Section 109(b) of the DGCL by adopting a bylaw inconsistent with the Charter, the Proposal may be excluded pursuant to Rule 14a-8(i)(2). Finally, because the Company would lack the power or authority to implement the Proposal, it may be excluded pursuant to Rule 14a-8(i)(6).

The Staff has previously not recommended enforcement action where an issuer omitted a shareholder-proposed bylaw amendment that was inconsistent with the issuer's certificate of incorporation. In AlliedSignal, Inc., 1999 SEC No-Act. LEXIS 104 (Jan. 29, 1999), a shareholder submitted a proposal to amend the issuer's bylaws to require a simple majority vote for all issues submitted to a vote of shareholders. The issuer's certificate of incorporation (as well as its bylaws) required a supermajority vote of shareholders on certain matters, and the shareholder proposal did not call for an amendment to the certificate of incorporation. The issuer argued that the change in the bylaws would cause it to violate state law, because the bylaws would thereafter be inconsistent with the certificate of incorporation. The Staff allowed Allied-Signal to omit the proposed bylaw amendment under Rule 14a-8(i)(2). The Staff also allowed issuers to omit shareholder-proposed bylaws in Lucent Technologies Inc., 2001 SEC No-Act. LEXIS 790 (Nov. 6, 2001) (exclusion under Rule 14a-8(i)(1)); Dillard Department Stores, Inc., 1997 SEC No-Act. LEXIS 460 (Mar. 19, 1997) (exclusion under former Rule 14a-8(c)(2)); Weirton Steel Corp., 1995 SEC No-Act. LEXIS 387 (Mar. 14, 1995) (exclusion under former Rule 14a-8(c)(2)); and Radiation Care, Inc., 1994 SEC No-Act. LEXIS 841, *2 (Dec. 22, 1994) ("Therefore, given the questionable validity of such a bylaw amendment, the proposal does not appear to be a proper subject for shareholder action under state law.").

In Farmer Bros. Co., 2003 SEC No-Act. LEXIS 805 (Nov. 28, 2003), the Staff allowed exclusion under Rule 14a-8(i)(1) of a shareholder proposal similar to the Proposal at issue here. The Farmer Bros. proposal called for a binding shareholder resolution prohibiting indemnification of certain current and former directors for liabilities in connection with certain "violations of law or breaches of duty." Id. at *1. The issuer's articles of incorporation authorized it to provide indemnification in excess of the indemnification provided under the relevant provisions of California law, and specifically stated that "the liability of directors ... for monetary damages shall be eliminated to the fullest extent permissible under California law." Id. at *16-*17. The issuer argued, among other things, that the proposed shareholder resolution conflicted with the articles of incorporation because it limited the indemnification and elimination of liability called for in the articles of incorporation, and the Staff agreed that the proposal could be excluded. See also Toys "R" Us, Inc., 2002 SEC No-Act. LEXIS 571 (Apr. 9, 2002) (allowing exclusion under Rule 14a-8(i)(2) of a proposed bylaw that the issuer argued, among other things, would conflict with the issuer's certificate of incorporation).

REQUEST

Based on the foregoing analysis, and on the Delaware Opinion, Monsanto respect-fully requests that the Staff concur that it will not recommend enforcement action if Monsanto omits the Proposal from its Proxy Statement.

Pursuant to guidance set forth on the Commission's web site at www.sec.gov/contact/mailboxes.htm, we are submitting this letter electronically via e-mail with six confirmatory hard copies to be filed concurrently with the Staff via mail. In addition, pursuant to Rule 14a-8(j)(1), we are sending a copy of this letter to the Proponent as notice of the Company's intention to omit the Proposal (including the accompanying supporting statement) from its Proxy Statement.

If you have any questions regarding this matter or require additional information, please contact the undersigned at (212) 403-1220 or Nancy Hamilton, Deputy General Counsel, Corporate Governance, Monsanto Company at (314) 694-4296. If the Staff does not agree with the conclusions set forth in this letter, we respectfully request the opportunity to confer with you before the determination of the Staff's final position.

Very truly yours,

/s/

Eric S. Robinson

Enclosures

cc: Nancy E. Hamilton, Esq., Deputy General Counsel, Monsanto Company Mark J. Gentile, Esq., Richards, Layton & Finger, P.A. John C. Harrington, President and CEO, Harrington Investments, Inc.

-----FOOTNOTES-----

¹ In Pennzoil, the savings clause ("to the extent permitted under Delaware law") was part of the proposed resolution, not the text of the proposed bylaw. The Proponent here has included the savings clause in the text of the bylaw, which makes the text (although not the meaning) of the bylaw more determinate, but does not cure the illegality of the Proposed Bylaw any more than it did in Pennzoil.

² Indeed, he could not do so: a shareholder may submit only one proposal for any shareholders' meeting, Rule 14a-8(c), and thus may not submit both a binding bylaw amendment and a precatory proposal regarding the Charter.

[APPENDIX]
Shareholder Resolution on Corporate Governance

Whereas, it is in the interest of shareholders to ensure that our company, its management and directors, are held in the highest esteem by the public, and that our directors are accountable as fiduciaries to the company and its shareholders; and

Whereas, because of the nature of Monsanto's business, and the policies set by the management and directors, our company may be exposed to heightened liabilities and reputational risks associated with environmental and human rights matters; and

Whereas, current Monsanto governance documents shield and promise to indemnify directors for certain liabilities; and

Whereas, proponents believe that if directors fail to meet their fiduciary obligations to oversee conduct of the company with respect to the environment or human rights, the directors should be personally liable, be it therefore

Resolved:

Shareholders enact a mandatory change to the By-Laws, in compliance with applicable law, and with the Company's by-laws, inserting a new section, as follows:

Section 59h. Notwithstanding other provisions of these by-laws, a director of the Corporation shall be personally liable to the Corporation or its stockholders for any breach of fiduciary duties of loyalty, good faith, care or oversight found to exist under Delaware Law, relating to matters of the environment or human rights affected by the Company, and the Corporation shall not indemnify such director for any liabilities except to the extent such indemnification may be required by Delaware Law. This provision shall be effective immediately upon approval by the shareholders, except that (a) any changes in the scope of Board members' liabilities shall only become effective in the event that the Board revises the Certificate of Incorporation to reflect these changes as requested by the shareholders, and (b) furthermore, changes in liability and indemnity limits shall become applicable to an individual director as his or her position and contract is established or renewed. This amendment shall not adversely affect any right or protection of a director existing with respect to any act or omission occurring prior to such amendment. In the event of a conflict between this provision and other corporate governance documents, applicability shall be determined pursuant to the law of Delaware.

Supporting Statement:

It is the intent of proponents to ensure that a director is personally accountable, and is not indemnified, if such director breaches fiduciary duties to the corporation in relation to matters of the environment or human rights. Therefore shareholders further intend and request that the Board revise, or seek revisions, to the Certificate of Incorporation, the Charter of the Board of Directors, and any other elements of corporate policy to ensure consistency with this By-Law amendment.

[INQUIRY LETTER]

October 3, 2006

Securities and Exchange Commission

Division of Corporation Finance
Office of the Chief Counsel
450 Fifth Street, N.W.
Washington D.C. 20549

Re: Monsanto Company Shareholder Proposal Submitted by John C. Harrington

Ladies and Gentlemen:

We have acted as special counsel to Monsanto Company ("Monsanto") in connection with a shareholder proposal submitted by Mr. John C. Harrington of Harrington Investments, Inc. for inclusion in the proxy statement on Schedule 14A to be distributed in connection with Monsanto's 2007 Annual Meeting of Shareowners. By a letter dated September 15, 2006, we requested that the staff of the Securities and Exchange Commission confirm that it would not recommend enforcement action if Monsanto excluded Mr. Harrington's proposal from its proxy statement.

On September 20, 2006, we received via facsimile a letter dated September 19, 2006, from Mr. Harrington, withdrawing his shareholder proposal. This letter was also sent to the SEC staff by facsimile, and a copy is enclosed herewith. Because Mr. Harrington has with-drawn his proposal, we believe that our request for no-action relief is now moot, and we hereby withdraw that request.

If you have any questions regarding this matter or require additional information, please contact the undersigned at (212) 403-1220 or Nancy Hamilton, Deputy General Counsel, Corporate Governance, Monsanto Company at (314) 694-4296.

Very truly yours

/s/

Eric S. Robinson

Enclosures

cc: Nancy E. Hamilton, Esq., Deputy General Counsel, Monsanto Company John C. Harrington, President and CEO, Harrington Investments, Inc.

[INQUIRY LETTER]

September 19, 2006

Hugh Grant
Chair, President & CEO
Monsanto Company
800 N. Lindbergh Blvd.
St. Louis, MO 63167

RE: Sharcholder Resolution

Dear Mr. Grant:

This is to inform you that I am withdrawing my shareholder proposal on a corporate governance by law amendment filed August 1, 2006 pursuant to Rule 14a-8 under the Securities and Exchange Act.

Sincerely,

/s/

John Harrington

mln

cc: SEC Mathew Levine

[STAFF REPLY LETTER]

October 5, 2006

Eric S. Robinson
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-6150

Re: Monsanto Company

Dear Mr. Robinson:

This is in regard to your letter dated October 3, 2006 concerning the shareholder proposal submitted by Harrington Investments, Inc. for inclusion in Monsanto's proxy materials for its upcoming annual meeting of security holders. Your letter indicates that the proponent has withdrawn the proposal, and that Monsanto therefore withdraws its September 15, 2006 request for a no-action letter from the Division. Because the matter is now moot, we will have no further comment.

Sincerely,

/s/

Ted Yu
Special Counsel

cc: John Harrington Harrington Investments, Inc. 1001 2nd Street, Suite 325 Napa, CA 94559