The St. Louis biotechnology company made the announcement Thursday at a symposium in Chennai, India. It means the company will not exercise its patent rights if another researcher develops the rice.
Along with the new licensing plan, Monsanto said Thursday it will release its rice genomic sequence database on a new Web site.
"We want to minimize the time and expenditure that might be associated with obtaining licenses needed to bring golden rice to farmers and the people in dire need of this vitamin in developing countries," Monsanto Chief Executive Hendrik Vefaillie said.
Golden rice, which is enriched with vitamin A that could save malnourished children from blindness or death, was developed by scientists in Switzerland and Germany.
Monsanto isn't the first company to try to increase access to golden rice.
In May, the inventors entered into agreement with two companies, Zeneca and Greenovation, to market their rice to the developed world as a "healthy food" and provide it to poor farmers in the developing world.
At that time, Zeneca estimated the rice would not be available for plating until 2003.
Critics of biotech crops say not enough is known about their safety or effect on the environment, and that the notion of giving the product away poses problems.
"How do you decide who the world's poor farmers are?" asked Margaret Mellon, director of the Food and Environment program at the Union of Concerned Scientists. "A lot of rice exporting countries have hungry farmers."
Scientists working on improving the rice will now be able to use Monsanto's rice genome sequence database free of charge, although some of that information may already be available in the scientific press.
The company said it hopes the licensing plan will spur development of rice varieties with increased levels of vitamin A, more commonly known as beta carotene.
The modified rice is expected to provide nutritional benefits to those suffering from vitamin A deficiency-related diseases, including irreversible blindness found each year in hundreds of thousands of children.
Adequate consumption also can reduce the number of deaths associated with infectious diseases, such as diarrhea and childhood measles, by improving the immune system.
Monsanto announced in April it had a draft sequence of a rice genome, the first crop genome to be described in such detail.
Monsanto is a subsidiary of New Jersey-based Pharmacia.
Rice is a relatively poor source of many essential nutrients, including vitamin A, but is the staple for half the world.
An estimated 124 million children worldwide are deficient in vitamin A, including a quarter million iSoutheast Asia who go blind each year because of the problem.
Improved nutrition could prevent 1 million to 2 million deaths a year, scientists say.
Rice naturally produces its own beta carotene, but it is lost in the milling process. The biotech variety would have the beta carotene right in the endosperm, the part people eat. The beta carotene gives the golden rice grains a distinctive yellowish hue.
Mellon says it is still not known if golden rice contains enough beta carotene to satisfy nutritional requirements, or if it will work with other crops and pesticides used in the Third World. She says tests are needed to determine possible health or environmental side effects.
"This thing is so far away from actually making a difference in any hungry persons' life that it should give us pause," she said.