Danish biotech firm Novozymes and U.S.-based biotech company Monsanto on Tuesday agreed to forge an alliance to research and develop microbial-based products for agriculture.

The long-term partnership will allow both sides to leverage employees, technologies and commercial assets, and join hands to research and develop the products, according to a joint statement of the two firms.

Novozymes CEO Peder Holk Nielsen said the alliance has the potential to "transform global agriculture, create an innovation powerhouse with a unique opportunity and approach."

"Monsanto, Novozymes and the farmer customers we serve share a need to meet growing demand in a sustainable way," said Monsanto CTO Robb Fraley.

"Investing in the research and development of agricultural biological technologies like microbial is another step in that direction and a natural extension of our core business," he added.

Microbial products, derived from the microorganisms such as bacteria and fungi, aim to protect crops from pests and diseases and enhance plant productivity and fertility.

The emerging biological technologies are used to complement or replace chemical agricultural products, and represent a growing market segment of more that 2 billion U.S. dollars in annual sales, according to Monsanto.