Analysis of Competitive Agricultural Sector Competitiveness in Langkat

Regency Hardwood Subsector (Plantation)

Nela Permata Sari Lubis

and Malem Ateta Br Purba

Post Graduated Student Department of Economics, Universitas Negeri Medan, Medan -Indonesia

Keywords: Economic Growth, Featured Commodities, Langkat Regency, Competitiveness

Abstract: This study aims to identify the leading sectors that exist in Central Java, and then those sectors are identified

which sectors have export competitiveness. This study uses GRDP data on the basis of Constant 2010

Prices. The data in this study uses secondary data from the data www.bps.go.id and sumut.bps.go.id.

Langkat Regency in 2017 The analysis method used in this study is the analysis of Location Quotient (LQ),

Concentration Index (CI), Specialization Index (SI), Location Index (LI), and Revealed Comparative

Advantage (RCA).Results of Location Quotient analysis of commodity plantation base is Kec. Bahorok

(Rubber Commodity, Cinnamon, Areca Palm, Aren), Kec. Serapit (Rubber, Cocoa, Areca, Pecan)

Commodity, Kec. Salapian (Rubber, Coffee, Cinnamon, Candlenut, Aren) Commodity, District Kutambaru

(Rubber, Cocoa, Areca, Pecan) Commodity, Kec. Sei Bingai (Commodity of Palm Oil, Cocoa, Coffee,

Areca Palm, Pecan, Kapuk, Aren), Kec. Kuala (Rubber, Cocoa, Coffee, Areca Nut, Pecan, Kapuk, Aren)

Commodity, Kec. Binjai (Oil Palm Commodity, Kapuk, Aren), Kec. Stabat (Commodity Cocoa, Pinang,

Sugar Cane, Kapuk, Wampu Subdistrict (Palm Oil, Cocoa, Areca Palm), Batang Serangan District (Rubber

Commodity, Palm Oil, Cinnamon, Kemiri, Kapuk), P Tualang Subdistrict (Rubber Commodity , Cocoa,

Areca Palm, Sugar Cane, Pepper), Hinai District (Palm Oil, Cocoa, Kapuk, Aren), Secanggang District

(Palm Oil, Cocoa, Areca Palm, Sugar Cane, Pepper), Tanjung Pura District (Palm Oil Commodity , Cocoa,

Pinang, Aren), Gebang District (Palm Oil, Cocoa, Pinang, Aren), Sei Lepan District (Rubber Commodity,

Cocoa, Kapuk, Aren), West Brandan District (Palm Oil Commodity, Palm Sugar), Besitang Subdistrict

(Palm Oil Commodity, Palm Sugar), Pangkalan Susu Subdistrict (Palm Oil, Cocoa, Pinang, Aren)

Commodity, Pematang Jaya District (Palm Oil Commodity, Cocoa).The sum of all the differences is

positive 1. The Specialization Index (SI) is 1/100 = 0.1, this value does not show significant differences in

distribution for each sector. While the total positive difference is 8.3, the Location Index (LI) = 8.3 / 100 =

0.083. Based on the calculation of the Location Index (LI) = 0, the distribution / distribution in the area for

the sector is the same as the distribution of the "reference variable". Then it is relatively balanced. Based on

the table above, the calculation of the RCA Index is if the value of an RCA of a commodity is more than

one (RCA> 1), the commodities of Rubber Tobacco and Gum in North Sumatra Province have

competitiveness above the average of exports of Indonesian Rubber Tobacco and Sap. If the RCA value is

less than one (RCA <1), the competitiveness of North Sumatra Province's coffee commodity exports do not

have competitiveness against commodity exports of Indonesian Coffee.

1 INTRODUCTION

The agricultural sector is the most important sector

and is a major driver in the economy of Langkat

Regency. The use of land that is differentiated

becomes agricultural land (paddy fields and non-

paddy fields) and non-agricultural land which in

2017 most of the land is available. used as

agricultural land which is equal to 626,329 ha (not

including community forest). This is what makes the

agricultural sector (including forestry in it) towards

the increase in the Gross Regional Domestic Product

(GDP) of Langkat Regency in 2017 increasing by

4.73 percent and becoming the dominant sector in its

role in the economic structure of Langkat Regency

with the value of economic growth over the years

Lubis, N. and Purba, M.

Analysis of Competitive Agricultural Sector Competitiveness in Langkat Regency Hardwood Subsector (Plantation).

DOI: 10.5220/0009503704970504

In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science (UNICEES 2018), pages 497-504

ISBN: 978-989-758-432-9

497

2015 experienced an average growth of 5.88 percent

per year.

Table 1: Percentage Distribution Of Gross Regional

Domestic Product Of Langkat Regency By Industry

Of Current Market Prices (Percent)

Industry

2013 2014 2015

201

2017

A Agriculture,

Forestry And

Fishing

43.75 41.65

39.8

39.6

39.4

B Mining And

Quarrying

10.09 9.74 9.88 9.84 9.55

C Manufacturing

14.44 14.94

15.3

15.4

16.2

D Electricity And Gas 0.22 0.20 0.20 0.19 0.20

E Water Supply,

Sewerage, Waste

Management And

Remediation

Activities

0.04 0.40 0.04 0.03 0.04

F Constructio

6.76 7.47 7.37 7.46 7.36

G Wholesale And

Retail Trade;Repair

Of Motor Vehicles

And Motorcycle

9.16 9.86

10.9

10.8

H Transportaion And

Storage

2.09 2.19 2.30 2.33 2.32

I Accommodation

And Food Service

Activities

2.03 2.12 2.16 2.17 2.25

J Information And

Communicatio

0.96 0.9 0.93 0.94 0.96

K Financial And

Insurance Activities

1.92 2.00 2.06 2.07 2.04

L Real Estate

Activities

2.85 2.98 2.91 2.93 2.93

Business Activities

053 0.55 0.55 0.56 0.57

O Public

Administration

And

Defence;Compulso

ry Social Securit

3.43 3.52 3.63 3.64 3.49

P Educatio

1.11 1.15 1.14 1.13 1.10

Q Human Health And

Social Work

Activities

0.46 0.47 0.48 0.47 0.47

R,S

,T,

Other Services

Asctivities 0.17 0.19 0.20 0.21 0.21

Gross Regional

Domestic Product

100,00 100,00

100,

Gross Regional

Domestic Product

Without Oil And

Gas

97.75 97.85

98.0

98.4

Source: GRDP BPS of Langkat Regency 2018

Determination of superior commodities in an

area is the first step towards agricultural

development that rests on the concept of efficiency

to achieve a comparative and competitive advantage

in the face of the globalization of trade faced. The

step towards efficiency can be taken by using

commodities that have comparative advantages both

in terms of the area of harvest, production, and

supply and demand.

One strategy that can be used in regional

economic development through the agricultural

sector in the current era of regional autonomy is

through the development of regional superior

commodities. The development of superior

commodity-based areas is expected to spur the

growth of a region which in turn can increase

people's income. Optimal and integrated utilization

of the potential of superior and potential areas is a

requirement that needs to be considered so that the

welfare and prosperity of the community can be

achieved (Mubyarto, 2000).

The success in international trade of a country

can be seen from its competitiveness, this

competitiveness is a general concept used in the

economy, which refers to the commitment to market

competition towards its success in international

competition. Competitiveness has become the key

for companies, countries and regions to be

successful in their participation in globalization and

world free trade.

North Sumatera Province has superior export

products with developments and changes in both the

export volume and export value each year. The

increase or decrease in exports in North Sumatra

Province was due to the competitiveness of these

products. With this competitiveness the role of the

government apparatus and exporters of North

Sumatra Province is required to keep export

products still capable of competitiveness in the

international market.

Table 2: Foreign Trade of North Sumatra Province

Source: BPS Statistics Of Sumatera Utara Province

North Sumatra Province has superior export

products with developments and changes in both the

export volume and export value each year. The

increase or decrease in exports in North Sumatra

Province was due to the competitiveness of these

products. With this competitiveness the role of the

government apparatus and exporters of North

Sumatra Province is required to keep export

products still capable of competitiveness in the

international market.

Determination of a commodity as a regional

superior commodity must be adjusted to the

potential of natural resources and human resources

owned by the region. Commodities selected as

regional superior commodities are commodities that

have high productivity and can provide added value

UNICEES 2018 - Unimed International Conference on Economics Education and Social Science

498

so that they have a positive impact on people's

welfare. In addition, the determination of regional

superior commodities must also consider the

contribution of a commodity to economic growth

and aspects of equitable development in an area

(Syahroni, 2005).

Food crop productivity is still not maximized due

to technological mastery that is lacking and weak in

skills in farming. In addition, farming capital is

limited, not all residents who own farms have

agricultural land, not all of them have irrigated land,

community income is still dependent on agriculture,

agricultural management is still traditional, it is

difficult to find cheap fertilizer. Farmers generally

process their own products and some are sold around

Langkat Regency, lack of innovation in product

processing, agricultural production is sold out once a

harvest and the food processing industry is still

minimal.

The value of production is not proportional to the

cost of production and market mechanisms that have

not been maximized and only cover the local area so

that farmers can find prices determined by other

parties relatively low. This resulted in the level of

agricultural production in Langkat Regency not

being able to lift the economy of the surrounding

communities and still lagging behind and not

developing. Seeing this condition requires

complementary efforts between the agricultural

sector and other potentials in continuing

development. This reflection implies that the

importance of developing the agricultural sector in

Langkat Regency functions as providing

employment, providing commodity diversity and

reducing the poor population.

2 THEORICAL FRAMEWORK

The local resource-based potential agribusiness

approach was developed with the concept of

superior commodity sectors in each region. This

concept results in a comparative and competitive

number of superior local resource commodities.

Comprehensively, superior commodities are

developed in market prospects. This development

requires a synergic link between processing and

marketing. Provision of inputs for production,

processing and marketing of output can be realized

by developing networks with other regions. The

network of cooperation between regions in

agribusiness development can be in the form of

product marketing network development or in

providing inputs (Bappeda West Java 2006 in Sari

2014).

The environmental and regional aspects that will

be developed become one of the centers of attention

in achieving maximum results from the agribusiness

approach. This means that to spur national economic

growth it is absolutely necessary to synergize the

development of an agribusiness approach with

regional development in general. Therefore it is

necessary to pay attention to the concept of

agricultural area development with a reference to

producing superior commodities through an

agribusiness approach (Ratnawati et al, 2000).

The role of leading commodities on regional

development

In the development of a region, regional

development is the most important part, especially in

rural areas that are sensitive to global scale changes.

This change requires regional planning by

considering internal, social and economic growth

aspects to minimize the number of underdeveloped

villages. In simple terms, the concept of regional

development needs to be carried out in rural

planning to encourage local economic growth and

strengthen communities in the lower levels so that it

can affect the market sustainably (Maryati 2009).

Setiawan (2006) in his research revealed that

leading sector growth in a region not only had an

impact on economic growth within the region but

also had an impact on economic growth outside the

region. Growth in leading sectors in each region has

an impact on output growth, gross added value, and

employment in the region (intraregional) and also

affects other interregional areas.

According to the Agricultural Research Agency

(2003), superior commodities are mainstay

commodities that have a strategic position to be

developed in an area whose determination is based

on various considerations both technically (soil and

climate conditions) and socio-economic and

institutional (technological mastery, resource

capability, human , infrastructure, and local socio-

cultural conditions).

Bacherin (2003) states that the determination of

superior commodities needs to be taken into account

in the formulation of priority development programs

by policy makers given the various limited resources

possessed by both financial resources, human

resources, and land resources. In addition to the

success of achieving development goals and

objectives, it is also expected to be better because

the activities carried out are more focused on

priority programs. Regional boundaries in

determining superior commodities are usually

administrative areas at the national, provincial and

district levels. From several studies that have been

carried out, the development of superior

commodities is determined based on the basic

Analysis of Competitive Agricultural Sector Competitiveness in Langkat Regency Hardwood Subsector (Plantation)

499

economic theory, biophysical aspects of land

suitability), economic feasibility, spatial planning,

and community desires.

The development of a superior commodity-based

area has criteria in driving the development of a

region that has a significant contribution to

increasing production, income and expenditure, has

a future and backward relationship and to other

regions, is able to compete and absorb labor and is

oriented towards the preservation of natural

resources and environment. Whereas in the district /

city, district superior commodities are expected to

meet the criteria: in the criteria of national superior

commodities, having economic values that meet

domestic and external needs, having a prospective

and highly competitive market, having the potential

to be added value in agro-industry, and able widely

cultivated.

Each region has different characteristics, both in

terms of population and resources. This makes the

potential will also vary, so that regional

development policies must be in accordance with the

characteristics of the area. According to Sari (2008)

the determination of superior commodities in an area

becomes a necessity with the consideration that

commodities are able to compete sustainably with

the same commodities produced by other regions, as

well as efficient production and have comparative

and compotitive advantages.

3 RESEARCH METHOD

The data / source collection technique in this

research is that the author conducted a literature

research by taking references from previous studies,

journals, books and literature relating to the topic

used as research for additional data. Data is obtained

from www.bps.go.id Langkat and sumut.bps.go.id.

The analytical method used to solve the research

objectives is:

Location Quotient Methods (LQ)

LQ analysis is used to determine superior

commodities in terms of production. This approach

is often used to measure the economic base. In the

LQ technique the measurement of economic activity

is relatively based on gross added value or labor.

𝐿𝑄 









Where:

pi = Production (harvest area) of commodity types i

at the sub-district level

pt = Production (harvest area) of food crops for all

commodities at the sub-district level

Pi = Production (harvest area) type of commodity i

at the district level

Pt = Production (harvest area) of commodity crops j

at the district level

Concentration Index Methods (CI)

Concentration Index (CI) is called a concentration

index, which refers to the ratio between the

workforce and the population as shown in the

following formula:

𝐶𝐼 





















Where :

𝐸





= total population (labor force) of industry i to

area k

= area (labor force) area k

= national population (labor force)

Specialization Index Methods (SI)

Specialization Index (SI) analysis is one way

to measure the behavior of overall economic activity

The formula calculates the Specialization Index (SI),

i.e.

IS =

∑

𝑆𝑖 untuk S

i ˃ 0

Dan S























Where :

= number of national industrial labor (labor

force) i

= total labor force (labor force) industry i area k

Location Index Methods (LI)

Location Index (LI) does not focus on an area, but

on one sector the distribution is between different

regions. The distribution of the workforce in a sector

for different regions is compared with its distribution

in all areas of the "reference variable".

The formula calculates the Location Index (LI) in

the following formula:

IL =

∑

𝐿𝑤 untuk L

w ˃ 0

Dan L

















Revealed Comparative Advantage Methods

(RCA)

Revealed Comparative Advantage (RCA) is a

technique for determining comparative

UNICEES 2018 - Unimed International Conference on Economics Education and Social Science

500

competitiveness of a region (country, province, etc.).

Basically this technique measures the export

performance of a commodity that is used to compare

the share of a commodity that is traded with the total

export in a region (Tumengkol et al., 2015). RCA

calculations can be described as follows.

RCA =





/







/



Where :

Pt = value of export of commodity i i Province of

North Sumatra year t

Qt = the total value of exports of non-oil

commodities in North Sumatra Province in

year t

Rt = value of Indonesia's export commodity i year t

St = total value of exports of Indonesian non-oil

commodities in year t

4 ANALYSIS

In general, the economic condition of Langkat

Regency is reflected in the development of GDP in

recent years. The figures listed in the GRDP are

figures that show added value formed and constitute

overall income for the economy of the district. From

Table 1, it can be calculated that in 2017 the

contribution of Langkat Regency GRDP to the North

Sumatera Province GRDP, both on the basis of

constant prices and current prices, has not reached

6%. There is even a tendency to decline throughout

the period 2013 - 2016. Only in 2017 there was an

increase in the contribution percentage of 5.05%.

There are three main sectors in Langkat

Regency which contribute to the provincial

economy, namely the agricultural sector, mining and

quarrying sector, and the building sector. The

agricultural sector contributes an average of 5.08%

in 2017.

Location Quotient Methods (LQ)

The results of the analysis of Location Quotient

(LQ) values on the production and area of plantation

crops are presented in the table below:

Table 3: Calculation and Classification of LQ Value

of Plantations (Plantation) by District In Langkat

Regency in 2017 (Tons)

Concentration Index Methods (CI)

Table 4: The calculation of Concentration Index (CI)

Value

Langkat

Workfor

Number of

population

Langkat

(Jiwa)

North

Sumatra

Work

Force

Total

Population of

SUMUT (Jiwa)

Concen

tration

Index

Value

(CI)

454,350 1,013,385 6,391,098 13,937,797 0.98

Source: Data processed by Researchers

Specialization Index Methods (SI)

Table 5: The calculation of Index Specialization

Value (SI)

Source: Data processed by Researchers

The total of all the differences is positive 1. The

Specialization Index (SI) is 1/100 = 0.1, this value

does not show significant differences in distribution

for each sector. In other words, SI = 0.1, the

distribution of the workforce of an activity sector in

Langkat Regency is the same as in the North

Sumatra Province. Furthermore, there is a relative

over representation in the mining and quarrying

sector. Furthermore, it also seems that over

representation is relatively in the agricultural sector

(the difference in value is negative because the

percentage of North Sumatra Province is lower than

the value of Langkat District).

Analysis of Competitive Agricultural Sector Competitiveness in Langkat Regency Hardwood Subsector (Plantation)

501

Location Index Methods (LI)

Table 6: The calculation of Index Location Value

(LI)

Main

Employmen

t Field

(1) (2) (3) (4)

(4) -

(3)

Work

Force

Langkat

Work

Force

Sumut

Work

Force

Langk

at (%)

Work

Force

Sumut

(%)

Agriculture,

Forestry

And Fishing

182,111 2,619,010 44.6 53.7 9.1

Mining And

Quarrying

9,160 36,001 2.2 0.7 (1.5)

Manufacturi

32,831 396,744 8.0 8.1 0.1

Electricity ,

Water

Supply And

Gas

0 52,594 0.0 1.1 1.1

Construction 23,740 333,268 5.8 6.8 1.0

Trade, Hotel

and real

estate

activities

83,660 1,013,577 20.5 20.8 0.3

Transportati

on and

communicati

13,285 38,929 3.3 0.8 (2.5)

Financial

and

insurance

activities

7,210 51,323 1.8 1.1 (0.7)

Social

Service

56,685 338,310 13.9 6.9 (6.9)

Others 0 406,208 0.0 8.3 8.3

Total 408,682 4,879,756 100.0 100.0 1.0

Source: Data processed by Researchers

The total of all positive differences is 8.3,

then the Location Index (LI) = 8.3 / 100 = 0.083.

Based on the calculation of the Location Index (LI)

= 0, the distribution / distribution in the area for the

sector is the same as the distribution of the

"reference variable". Then it is relatively balanced.

Revealed Comparative Advantage Methods

(RCA)

Table 7: Level of Competitiveness of Plantation

Export Products in North Sumatra Province

Years Coffee Tobacco Rubber

2007 1.12 1.06 1.58

2008 1.77 1.26 1.82

2009 1.28 0.86 1.29

2010 1.12 1.13 1.33

2011 1.09 1.27 1.18

2012 1.07 1.34 1.17

2013 1.04 1.47 1.11

2014 1.11 1.40 1.01

2015 0.79 1.65 1.00

2016 0.90 1.91 1.19

2017 0.95 1.71 1.14

Source: Data processed by Researchers

Based on the table above, the calculation of the

RCA Index is if the value of an RCA of a

commodity is more than one (RCA> 1), the

commodities of Rubber Tobacco and Gum in North

Sumatra Province have competitiveness above the

average of exports of Indonesian Rubber Tobacco

and Sap. If the RCA value is less than one (RCA

<1), the competitiveness of North Sumatra

Province's coffee commodity exports do not have

competitiveness against commodity exports of

Indonesian Coffee.

5 RESULTS

Based on the results of Location Quotients Analysis

(LQ) which shows that the commodity is LQ Value>

1, it can be concluded that each sub-district has

superior commodity (One Disctric and One

Comodity), which is based on the highest LQ value

in each sub-district. the following: Bahorok Sub-

district namely Rubber, Cinnamon, Areca Palm,

Aren; Serapit District, namely Rubber, Cocoa, Areca

Nut, Pecan; Salapian District, namely Rubber,

Coffee, Cinnamon, Pecan, Aren; Kutambaru

District, namely Rubber, Cocoa, Areca Palm, Pecan;

Sei Bingai Sub-district namely Palm Oil, Cocoa,

Coffee, Areca Palm, Pecan, Kapuk, Aren; Kuala

Subdistrict namely Rubber, Cocoa, Coffee, Areca

Palm, Pecan, Kapuk, Aren; Binjai Subdistrict

namely Palm Oil, Kapuk, Aren; Stabat District,

namely Cocoa, Areca Palm, Sugar Cane, Kapuk;

Wampu District, namely Palm Oil, Cocoa, Areca

Palm; Batang Serangan Subdistrict namely Rubber,

Palm Oil, Cinnamon, Pecan, Kapuk; Seberang Sawit

Subdistrict namely Rubber, Cocoa, Areca Palm;

Padang Tualang Subdistrict namely Rubber, Cocoa,

Areca Palm, Sugar Cane, Pepper; Hinai Subdistrict

namely Palm Oil, Cocoa, Kapuk, Aren; Secanggang

District, namely Palm Oil, Cocoa, Areca Palm,

Sugar Cane, Pepper; Tanjung Pura Subdistrict

namely Palm Oil, Cocoa, Areca Palm, Aren; Gebang

District, namely Palm Oil, Cocoa, Areca Palm,

Aren; Sei Lepan District, namely Rubber, Cocoa,

Kapuk, Aren; West Brandan District, namely Palm

Oil, Palm Sugar; Besitang District, namely Palm Oil,

Palm Sugar; Pangkalan Susu Subdistrict namely

Palm Oil, Cocoa, Areca Palm, Aren; Pematang Jaya

District, namely Palm Oil, Cocoa.

The Total of all the differences is positive 1.

The Specialization Index (SI) is 1/100 = 0.1, this

value does not show significant differences in

distribution for each sector. In other words, SI = 0.1,

the distribution of the workforce of an activity sector

UNICEES 2018 - Unimed International Conference on Economics Education and Social Science

502

in Langkat Regency is the same as in the North

Sumatra Province.

The Total of all positive differences is 8.3, then

the Location Index (LI) = 8.3 / 100 = 0.083. then the

distribution / distribution in the area for the sector is

the same as the distribution of the "reference

variable".

The Calculation of RCA, in 2017 coffee

commodities from North Sumatra province did not

have competitiveness against Indonesian coffee

commodity exportsbecause value of RCA < 1, but in

the tobacco and natural rubber commodities had a

value of RCA> 1 so that it had competitiveness

above the average export of Indonesian rubber and

tobacco

6 CONCLUSIONS

Based on the results of Location Quotients Analysis

(LQ) which shows that the commodity is LQ Value>

1, it can be concluded that each sub-district has

superior commodity (One Disctric and One

Comodity), which is based on the highest LQ value

in each sub-district. the following: Bahorok Sub-

district namely Rubber, Cinnamon, Areca Palm,

Aren; Serapit District, namely Rubber, Cocoa, Areca

Nut, Pecan; Salapian District, namely Rubber,

Coffee, Cinnamon, Pecan, Aren; Kutambaru

District, namely Rubber, Cocoa, Areca Palm, Pecan;

Sei Bingai Sub-district namely Palm Oil, Cocoa,

Coffee, Areca Palm, Pecan, Kapuk, Aren; Kuala

Subdistrict namely Rubber, Cocoa, Coffee, Areca

Palm, Pecan, Kapuk, Aren; Binjai Subdistrict

namely Palm Oil, Kapuk, Aren; Stabat District,

namely Cocoa, Areca Palm, Sugar Cane, Kapuk;

Wampu District, namely Palm Oil, Cocoa, Areca

Palm; Batang Serangan Subdistrict namely Rubber,

Palm Oil, Cinnamon, Pecan, Kapuk; Seberang Sawit

Subdistrict namely Rubber, Cocoa, Areca Palm;

Padang Tualang Subdistrict namely Rubber, Cocoa,

Areca Palm, Sugar Cane, Pepper; Hinai Subdistrict

namely Palm Oil, Cocoa, Kapuk, Aren; Secanggang

District, namely Palm Oil, Cocoa, Areca Palm,

Sugar Cane, Pepper; Tanjung Pura Subdistrict

namely Palm Oil, Cocoa, Areca Palm, Aren; Gebang

District, namely Palm Oil, Cocoa, Areca Palm,

Aren; Sei Lepan District, namely Rubber, Cocoa,

Kapuk, Aren; West Brandan District, namely Palm

Oil, Palm Sugar; Besitang District, namely Palm Oil,

Palm Sugar; Pangkalan Susu Subdistrict namely

Palm Oil, Cocoa, Areca Palm, Aren; Pematang Jaya

District, namely Palm Oil, Cocoa.

The total of all the differences is positive 1. The

Specialization Index (SI) is 1/100 = 0.1, this value

does not show significant differences in distribution

for each sector. In other words, SI = 0.1, the

distribution of the workforce of an activity sector in

Langkat Regency is the same as in the North

Totalatra Province. Furthermore, there is a relative

over representation in the mining and quarrying

sector. Furthermore, it is also seen that over

representation is relatively in the agricultural sector

(the difference in negative values is because the

percentage of North Totalatra Province is lower than

the value of Langkat Regency).

The total of all positive differences is 8.3, then

the Location Index (LI) = 8.3 / 100 = 0.083. Based

on the calculation of the Location Index (LI) = 0, the

distribution / distribution in the area for the sector is

the same as the distribution of the "reference

variable". Then it is relatively balanced.

Based on the table above, the calculation of the

RCA Index is if the value of an RCA of a

commodity is more than one (RCA> 1), the

commodities of Rubber Tobacco and Gum in North

Sumatra Province have competitiveness above the

average of exports of Indonesian Rubber Tobacco

and Sap. If the RCA value is less than one (RCA

<1), the competitiveness of North Sumatra

Province's coffee commodity exports do not have

competitiveness against commodity exports of

Indonesian Coffee.

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