Agricultural Value Chain Dynamics: The Case of Olive Oil in Turkey

Büşra Atamer Balkan, Department of Industrial Engineering, METU

Abstract

In recent decades, agricultural commodity and food price fluctuations reveal the importance of understanding the agricultural value chain dynamics and making policy recommendations for sustainable development. The modeling purpose in this study is twofold: (1) to understand the price, supply and demand dynamics along the agricultural commodity value chains (2) for the specific case of the olive oil value chain in Turkey, to make policy and scenario analysis with the focus of economic sustainability. In line with these purposes, the Agricultural Commodity Value Chain Model is constructed with system dynamics modeling methodology. The model is unique in terms of simultaneously (i) including both the agricultural supply chain and the agricultural value chain structures, (ii) considering the four major market elements, price, demand, supply, and capacity, endogenously, and (iii) considering complex nonlinear relationships among the price levels in different stages of the agricultural value chain. Using this modeling framework and a stylized parameter setting, we first conduct a numerical study and analyze the performance of two sets of value chain interventions, namely, technology investments and financial aid improvements, in mitigating the price fluctuations. Then, the model is adapted to the case of the olive oil value chain in Turkey. By utilizing the historical data between the years 2007-2018, the model is shown to be valid to represent the behavior of the olive oil value chain in Turkey. Using the validated model, a set of simultaneous policy and scenario analyses are conducted for years 2019-2023, and the impacts of policies on economic indicators are presented.

Short Bio

Büşra Atamer Balkan received her B.Sc., M.Sc., and Ph.D. degrees from the Industrial Engineering Department of Middle East Technical University. After working as a Research and Teaching Assistant in the same department, she joined the industry and worked in the Production, Inventory, and Resource Planning areas for more than seven years. Her primary research interests are system dynamics simulation and systems thinking, especially in the areas of agricultural systems, value chain analysis, public policy analysis and supply chain management.

Venue

Friday, February 14, 2020 at 4.00 pm in IE 03