Case | HBS Case Collection | January 2011 (Revised July 2012)

Arcadia Biosciences: Seeds of Change (Abridged)

by Arthur A. Daemmrich

Abstract

Arcadia Biosciences is seeking to introduce genetically modified rice to China that will lower farmers' costs and generate environmental benefits through reduced greenhouse gas emissions. The case describes challenges facing this small agricultural biotechnology company, notably uneven enforcement of intellectual property in emerging market countries and uncertainty regarding the provision and market value of carbon credits under international climate change agreements. In September 2008, Eric Rey, Arcadia's CEO, faces an inflection point concerning his leading technology, genes for Nitrogen Use Efficiency (NUE) in rice. He can determine a price to charge for NUE seed based on savings to farmers from their reduced use of expensive nitrogen fertilizers. Or he can advance a plan to earn revenue from carbon credits allocated under the Kyoto Protocol to China for use of Arcadia's rice, since reduced nitrogen fertilizer use will lower greenhouse gas emissions. The case provides context on the company; describes advances in seed technologies focused to climate change and the associated resource issue of fertilizer use; and presents the strategic choices facing a start-up company operating at the intersection of business, agriculture, and climate change agreements.

Keywords: Plant-Based Agribusiness; Intellectual Property; Genetics; Environmental Sustainability; Science-Based Business; Weather and Climate Change; Agriculture and Agribusiness Industry; Biotechnology Industry; China;

Citation:

Daemmrich, Arthur A. "Arcadia Biosciences: Seeds of Change (Abridged)." Harvard Business School Case 711-050, January 2011. (Revised July 2012.)