(FORTUNE Magazine) – The armies of insect pests that destroy crops are winning. This despite the fact that, according to researchers at Cornell University, the U.S. uses 33 times as much pesticide as in the 1940s and the overall toxicity of those chemicals is ten times greater. The little varmints have developed resistance to virtually every chemical used against them; over that same period, the percentage of crops lost to pests rose from 31% to 37%. Estimated annual damage nowadays: $20 billion. With environmental worries threatening to trigger a ban on many pesticides now in use, that figure could go much higher. Just in time, enter a new line of lethal agents engineered to kill faster but without a baneful effect on the environment. These include a branch of the family of tiny worms known as nematodes; they leave the crops alone and eat the enemy. The bug vs. bug approach, pioneered by BioSys, involves breeding the microscopic nematodes by the billions. The small Silicon Valley public company puts the critters in a state near suspended animation, packages them, and sends the boxes to farmers and other customers like Ortho, which sells at retail level. Sprayed via conventional equipment, the bugs burrow underground near plant roots. There they detect carbon dioxide emissions of soil-born insects like root weevils, move toward them as relentlessly as heat-seeking missiles, and enter the larvae. The nematodes settle in and a bacterium they carry kills the insects. Feasts and orgies follow: Several generations of nematodes live and breed inside the dead insect. When they have exhausted their food supply they emerge and seek their next victim.