Identifying leading commodities for regional development in transmigration areas: evidence from Muaro Takung-Kamang Baru, Indonesia

Veralianta Br Sebayang, Rasidin Karo Karo Sitepu, Fazleen Abdul Fatah

Abstract


Transmigration areas often experience economic problems associated with a lack of dominance of lead commodities to encourage local growth. This research is interested in finding the lead commodity of Muaro Takung-Kamang Baru, Sijunjung Regency, to support the development of the transmigration area. A descriptive quantitative method was used with the Location Quotient (LQ) analysis (comparative advantage), Shift-Share analysis (competitive advantage), and SWOT analysis in developing an evidence-based policy strategy. The 2018-2023 regional production and economic data were examined. The findings of both LQ and shift-share analyses revealed oil palm as the dominant commodity of Muaro Takung with both comparative and competitive advantages. Palm oil is the major contributor to the local plantation sector, but it too has its constraints: standards of product quality that are less than optimal, farmers' productivity, and lack of access to capital. The commodity itself is an important driver in the regional economy with an integrated upstream–downstream supply chain stretching from Fresh Fruit Bunch production to refined products, which creates significant employment locally. The advancement of oil palm as a superior commodity could become the catalyst for the growth of the transmigration area. However, it is necessary to adopt systemic solutions to overcome structural and institutional barriers, to strengthen the infrastructure and farmers’ capacities, and also to establish industry clusters through Porter’s Diamond Model. Local authorities are expected to take over CPO production facilities on the ±2,000 ha of land given for that aim and support farmer institution development as well as partnership with investors and environmental sustainability. Enhancing the upstream–downstream supply chain to support the comparative and competitive advantage and added value of the region is crucial for sustainable economic development in transmigration areas.

Keywords


leading commodity; location quotient; oil palm; transmigration area;

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References


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DOI: https://doi.org/10.21107/agriekonomika.v15i1.33909

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