DETERMINING FACTORS OF AGRIBUSINESS SYSTEM DEVELOPMENT RED CHILLIES IN NORTH SUMATRA PROVINCE

Abstract: This study aims to identify the main determinants and determine priority activities in the context of developing the red chili agribusiness system in North Sumatra Province. This research was conducted in North Sumatra Province which is the 3rd largest red chili producing centre in Indonesia. The data used are primary data derived from in-depth interviews with experts, local governments, academics, and practitioners related to the red chili agribusiness system in North Sumatra. Data analysis method using Interpretative Structural Modelling (ISM).The analytical method used :( a) analysis of net income is the difference between gross incomes minus total production costs. (b) Multivariate linear regression analysis to explain the effect of variable costs of seeds, fertilizers, pesticides, labour, mulch, to net income. Then the red chili development strategy in the region of North Sumatra Province is in quadrant 1 where it supports an aggressive strategy that describes a very good situation because it has opportunities and strengths, so it can be take advantage of existing opportunities, the strategies that must be implemented support the policy aggressive growth. In support of an aggressive growth policy, priority strategy that can be applied in agribusiness development efforts for chili farming in Indonesia attacking agropolitan districts is to implement the five strategies of agriculture, planting, using superior seeds and utilizing soil fertility and optimizing resources humans so that the production of limited resources and the attack of plant disease organisms can overcome. The results showed that there are 6 determining factors that have a strong driving force in the development of the red chili agribusiness system including production, increasing the capacity of extension workers, employment, price stability, land leases, as well as marketing agencies. Based on this, priority activities that have a strong driving force in the development of the red chili agribusiness system are increasing production, increasing productivity and quality of red chili commodities, increasing product down streaming, implementing Good Agricultural Practice (GAP) and increasing agricultural human resource capacit