Description
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, because reduced nitrogen fertilizer use will lower greenhouse gas emissions. The case provides context on the company; describes advances in seed technologies focused on 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.