Olive oil value-chain dynamics: the Turkish olive oil industry case

Balkan B. A., Meral S.

8th International Olive Symposium, Split, Croatia, 10 - 14 October 2016, vol.1199, pp.195-201 identifier identifier

  • Publication Type: Conference Paper / Full Text
  • Volume: 1199
  • Doi Number: 10.17660/actahortic.2018.1199.32
  • City: Split
  • Country: Croatia
  • Page Numbers: pp.195-201
  • Keywords: agricultural value chain analysis, system dynamics modeling, olive oil industry
  • Middle East Technical University Affiliated: Yes


Turkey is one of the five largest olive oil producers in the world; the country satisfies domestic demand to its fullest extent, and also exports olive oil to several countries. Despite this positive outlook, discontent among relevant stakeholders in the olive oil value chain indicates that regulatory decisions in the industry need to be revised and improved. The value of olive oil has a much more complicated structure than a standard mere summation of costs and profit margins. The need to explain analytically, mathematically, and comparatively how the "value" is created in the olive oil value chain and to understand the effects of possible regulatory decisions in improving the value gained by the relevant stakeholders is a nonlinear dynamic feedback problem. In order to model and simulate complex and dynamic systems, the system dynamics approach and its tools are used in industrial and systems engineering. The objectives of this study were: (1) to define the products, processes, and relevant stakeholders in the olive oil value chain, (2) to conduct data analyses in order to assess the "value" added and gained by the relevant stakeholders in the value chain, and (3) to build a system dynamics model to represent the behavior of the Turkish olive oil value dynamics, and to make decision and scenario analyses in order to improve the "value" gained by the relevant stakeholders with the system dynamics model developed.