I don't know if this will work in practice, but if it does it could be very problematic. In any case, something like it is likely to work well enough in the lab that some company would get the idea of using it. But the watermarks could leak out in several ways, including pollination and bacteria-mediated exchanges of genetic material. An innocent farmer could be sued because some of its produce is "watermarked" involuntarily through one of those routes. They might not afford to defend themselves from the charge that they are infringing someone's patent on a genetically-engineered plant, and end up having to pay protection money (shades of RIAA).