Contribution of Agricultural Sector and Sub Sectors on Indonesian Economy

This research aimed to analyze trend of agricultural GDP and agricultural contribution in Indonesia, and identify the role of agricultural sector and sub sectors in provinces of Indonesia. Source of data this research use linear trend analysis to analyze trend agricultural Gross Domestic Product (GDP) and agricultural contribution. Location Quotient (LQ), Dynamic Location Quotient (DLQ), and combination LQ and DLQ is used to identify the role of agricultural sector and sub sectors. The analysis found that agricultural GDP in Indonesia has increasing trend while agricultural contribution has decreasing trend. Agricultural sector is basic sector in 29 provinces in Indonesia. Farm food crop is leading sub sector in 6 provinces, farm non food crops is leading sub sector in 14 provinces, livestock is leading sub sector in 3 provinces, forestry is leading sub sector in 1 provinces, fishery is leading sub sector in 5 provinces.


INTRODUCTION
Agricultural sector has a vital role in national economy through its of Gross Domestic Product (GDP), foreign exchange, provision of food and raw materials, poverty alleviation; provide employment where agricultural sector can absorb more than 35% of total workforce, and the increase in people's income.Beside its direct contributions, the agricultural sector also has indirect contribution of multiplier effect which is the input-output linkages between industries, consumption and investment.The multiplier impact is relatively large so that the agricultural sector as the main sector deserves national economic development (Anonim, 2006).
Agricultural development in Indonesia will be faster if it is supported by development planning in the regional and national.One of determinant factors on agricultural development among others policy and programs.Appropriate policies and programs of agricultural development is a principal source of agricultural progress in order to make agricultural development can be done well Since appropriate policy and program is critical, the government should be careful to take decisions about policies and programs of agricultural development.For this purpose, Indonesian government needs information about the condition of the agricultural sector both nationally and regionally.By this way, it is expected that implementation of policies and programs of agricultural development will be more effective and efficient.This research aimed to analyze trend of agricultural GDP trend of agricultural contribution on GDP in Indonesia during the last 20 years, and identify the role of agricultural sector and sub sector in each provinces of Indonesia.

LQ =
Where: xi = value added of agricultural sector or sub sectors in region ei = Regional Gross Domestic Product Xi = value added of agricultural sector/sub sectors in national Ei = Gross Domestic Product The criteria: LQ > 1, it means that agricultural sector is basic sector.LQ ≤ 1, it means that agricultural sector is non basic sector.
Determinate of agricultural basic sub sectors in the region after not only use LQ analysis but also use DLQ analysis and combination both of them to identify of agricultural classification.Dynamic Location Quotient (DLQ) is the modification of LQ.DLQ accommodate the growth rate from time to time (Kuncoro, 2012).DLQ of agricultural sector can be formulated as: Where: g ij = growth rate of the agricultural sub sectors in province g i = growth rate of the agricultural sector in province G i = growth rate of the agricultural sub sectors in national G = growth rate of the agricultural sector in national level t = difference between last year and beginning year The criteria: DLQ >1, it means agricultural sub sector is expectable to be basic sector in the future.DLQ < 1, it means agricultural sub sector is not expectable to be basic sector in the future.

Trend of Agricultural GDP and Agricultural Contribution in Indonesia
Agricultural sector has important role in Indonesia.The role of its such as produce of foods, contributor on GDP, contributor on foreign exchange, the largest absorption of labor, and multiplier effect.For that, Indonesian government is trying to develop agricultural sector.Performance of agricultural development can be seen from trend of agricultural GDP.
Agricultural GDP of Indonesia always increases from time to time except in 1998 which decrease from previous year that is caused by economic crisis.Agricultural GDP of Indonesia reached 327,549.7 billion rupiah in 2012.Figure 1 shows that agricultural GDP of Indonesia has increasing trend.The curve moves from lower left to upper right.Agricultural GDP of Indonesia is formed by five agricultural sub sectors.Farm food crops is the largest contributor on agricultural GDP of Indonesia with average is 50.61% during 1993-2012.Farm non food crops contribute 15.40% on agricultural GDP of Indonesia then there are fishery, livestock, and forestry.
Agricultural contribution on GDP of Indonesia has tendency decrease during 1993-2012.Since 1993 until 1997, agricultural contribution on GDP of Indonesia is decline from year to year.But, economic crisis that is started in 1997 made agricultural contribution increased.Figure 2 shows the decreasing trend of agricultural contribution on GDP of Indonesia.The curve moves from upper right to lower left.Trend of agricultural GDP which increase and trend agricultural contribution which decrease show that economic development in Indonesia is going well.Kuznets cit Sukirno (2011) said that economic development will change the economic structure in a country.The change of economic structure is showed by decreasing of agricultural contribution on economy.

The Role of Agricultural Sector and Sub Sectors in Indonesia a. Sumatera
Base on table 1, it is known that agricultural sector is basic sector in 9 provinces of Sumatera cluster.Only in Kepulauan Riau Province, agricultural sector is not basic sector.It is because economy of Kepulauan Riau is dominated by industrial, trade, hotel and restaurant sector.Kepulauan Riau has Batam city as central business and manufacturing industry.Although agricultural sector is not basic sector in Kepulauan Riau, there is agricultural sub sector which is basic sub sector in Kepulauan Riau.Those are livestock and fishery sub sector.Fishery sub sector has high LQ value that is 5.  2, it is known that fishery sub sector in all provinces in Sumatera cluster has DLQ value smaller than 1.It means that the growth of fishery sub sector in provinces in Sumatera cluster is lower than the growth of fishery sub sector in national level.It also means that fishery sub sector in provinces in Sumatera cluster cannot be basic sub sector in the future if economic condition does not change.
Farm non food crops sub sector is leading sector in 7 provinces in Sumatera cluster.This is not surprising, given the focus of agricultural development in Sumatera cluster is farm non food crops especially palm oil plantations.Development of farm non food crops in Sumatera cluster is effort of government to accelerating economic growth in there.But, this can cause problems in the future if it is not accompanied by development of other sub sectors.The problems that have appeared at this time are the conversion of farm food crops land and forests to plantation especially palm oil plantation (Table 3).
Jawa cluster consist of 6 provinces those are DKI Jakarta, Jawa Barat, Banten, Jawa Tengah, DI Yogyakarta, and Jawa Timur.Economic development activity in Jawa cluster focus on industrial and service sectors especially in DKI Jakarta and Jawa Barat.Base on table 4, it is known that agricultural sector is not basic sector in 2 provinces in Jawa cluster.Those provinces are DKI Jakarta and Banten.It means that agricultural production cannot meet local demand in those provinces.But, DKI Jakarta has basic sub sector that is fishery sub sector which has LQ value 2.07.Fishery is basic sub sector only in DKI Jakarta, while farm non food crops are basic sub sector in Jawa timur.Agricultural sub sector is not basic sub sector in all provinces in Jawa cluster is forestry sub sector.Farm food crops have DLQ value more than 1 in 4 provinces in Jawa cluster.Those provinces are Jawa Barat, Jawa Tengah, DI Yogyakarta, and Jawa Timur.DLQ value of farm food crop in DKI Jakarta and Banten are smaller than 1.It means that farm food crops in DKI Jakarta and Banten cannot be basic sub sector in the future.Farm non food crops have DLQ value more than 1 in DKI Jakarta and Banten (Table 5).
Base on table 6, it is known that farm food crops is leading sub sector in Jawa Barat, Jawa Tengah, DI Yogyakarta, and Jawa Timur.It means that farm food crops is basic sub sector now and can be basic sub sector in the future.
Farm non food crops are potential sub sector in DKI Jakarta and Banten.Livestock is leading sub sector in Banten and Jawa Timur.Fishery is leading sub sector in DKI Jakarta.(2008), 80% of farm food crops GRDP of Kalimantan contribute from palm oil while 53% of plantation land area in Kalimantan is also palm oil.Forestry sub sector is basic sub sector in all provinces of Kalimantan cluster.Base on table 11, it is known that DLQ value of farm non food crops is more than one in all provinces of Kalimantan cluster.It means that the growth of farm non food crops in provinces of Kalimantan cluster is faster than its growth in national level.DLQ value of forestry sub sector show that the growth of it in provinces of Kalimantan is lower than in national level.In Kalimantan Timur there are sub sectors which have DLQ value more than 1, those are farm food crops and fishery sub sector.  12 show that farm food crops is leading sub sector in Kalimantan Barat, Kalimantan Tengah, and Kalimantan Selatan.In Kalimantan cluster, forestry sub sector is repositioning as non basic sub sector in the future (classification II).

e. Sulawesi
Base on table 13, Agricultural sector is basic sector in all provinces of Sulawesi cluster where farm food crops as be basic sub sector.Farm food crop is not being basic sub sector in Sulawesi cluster.Farm non food crop is basic sub sector in all provinces of Sulawesi cluster.

Figure 1 .
Figure 1.Trend of agricultural GDP Source: BPS, several years of publication (processed)

Table 1 .
The Agricultural Sector Classification Based on the Composite LQ and DLQ

Table 1 .
The Average of LQ Value of Agricultural Sector and Sub Sectors by Province in Sumatera

Table 2 .
The Average of DLQ Value of Agricultural Sub Sectors by Province in Sumatera Source: Data Processed, 2014Base on DLQ value in table

Table 3 .
Classification of Agricultural Sub Sector Base on LQ and DLQ Value by Province in Sumatera

Table 4 .
The Average of LQ Value Agricultural Sector and Sub Sectors by Province in Java

Table 5 .
The Average of DLQ Value of Agricultural Sub sectorsby Province in Jawa

Table 6 .
Classification of Agricultural Sub sectors Base on LQ and DLQ Value by Province in Jawa

Table 7 .
The Average of LQ Value of Agricultural Sector and Sub Sectors by Province in Bali and Nusa Tenggara Base on LQ value on table 10, agricultural sector is basic sector in 3 provinces in Kalimantan cluster.Those are Kalimantan Barat, Kalimantan Tengah, and Kalimantan Selatan.Farm non food crops is basic sub sector in Kalimantan Barat, Kalimantan Tengah, and Kalimantan Selatan with superior commodity is palm oil.Base on BPS

Table 8 .
The Average of DLQ Value of Agricultural Sub Sectors by Province in Bali and Nusa Tenggara

Table 9 .
Classification of Agricultural Sub Sectors Base on LQ and DLQ Value by Province in Bali and Nusa Tenggara

Table 10 .
The Average of LQ Value of Agricultural Sector and Sub Sectors by Province in Kalimantan

Table 11 .
The Average of DLQ Value of Agricultural Sub Sectors by Province in Kalimantan

Table 12 .
Classification of Agricultural Sub Sectors Base on LQ and DLQ Value by Province in Kalimantan

Table 13 .
The Average of LQ Value of Agricultural Sector and Sub Sectors by Province in Sulawesi Base on table 16, agricultural sector is basic sector in all provinces of Papua and Maluku cluster.From 5 agricultural sub sectors, there are 3 sub sectors which is basic sub sector.Farm non food crop is basic sub sector in Maluku, while forestry and fishery are basic sub sectors in Maluku, Papua, and Papua Barat.

Table 14 .
The Average of DLQ Value of Agricultural Sub Sectors by Province in Sulawesi

Table 15 .
Classification of Agricultural Sub Sectors Base on LQ and DLQ by Province in Sulawesi

Table 16 .
The Average of LQ Value Agricultural Sector and Sub Sectors by Province in Maluku and Papua

Table 17 .
The Average of DLQ Value Agricultural Sub Sectors by Province in Maluku and Papua

Table 18 .
Classification Agricultural Sub Sectors Base on LQ and DLQ Value by Province in Maluku and Papua Base on classification of agricultural sub sector on table 18, it is known that farm food crops is leading sub sector in Maluku Utara while fishery is leading sub sector in Maluku and Papua.Leading sub sector means that the sub sector is basic sub sector this time and can be basic sub sector in the future.Farm food crops are potential sub sector which can develop in all provinces of Papua and Maluku cluster.CONCLUSION 1. Agricultural GDP in Indonesia has increasing trend while agricultural contribution in Indonesia has decreasing trend.It is showed that economic development in Indonesia is going well. 2. Agricultural sector is basic sector in 29 provinces.Those are Aceh, Sumatera Utara, Sumatera Barat, Riau, Jambi, Sumatera Selatan, Kep.Bangka Belitung, Bengkulu, Lampung, Jawa Barat, Jawa Tengah, DI Yogyakarta, Jawa Timur, Bali, Kalimantan Barat, Kalimantan Tengah, Kalimantan Selatan, Sulawesi Utara, Gorontalo, Sulawesi Tengah, Selawesi Barat, Sulawesi Selatan, Sulawesi Tenggara, Nusa Tenggara Barat, Nusa Tenggara Timur, Maluku, Maluku Utara, Papua, and Papua Barat.Farm food crop is leading sub sector in 6 provinces, farm non food crops is leading sub sector in 14 provinces, livestock is leading sub sector in 3 provinces, forestry is leading sub sector in 1 provinces, fishery is leading sub sector in 5 provinces.