Network Structure of Institutions in Cassava Agro-Industry Development in Lima Puluh Kota District

Abstract

The development of cassava agro-industry in Lima Puluh Kota District is very potential. It is related that Lima Puluh Kota District is the largest cassava commodity production district in West Sumatera Province. There are formal and informal institutions that support the development of agro-industry through various activities involving agro-industry. This study aims to describe the network structure of formal and informal institutions in the development of cassava agro-industry in Lima Puluh Kota District. This research uses mixed methods research. Data and information in this study are obtained from literature studies, observations, in-depth interviews, and Focus Group Discussions (FGD) used for quantitative and qualitative analysis. The quantitative analysis used descriptive statistics, and qualitative analysis used the interactive model. The results of this research showed that the frequency of interactions of informal institutions and agro-industry is more often than formal institutions. Social relations are more dominant than business relations in the network structure of formal institutions and agro-industry. On the other hand, the network structure of informal institutions and agro-industry, business relations are more dominant comparing social relations. Social relations can get through coaching activities such as counseling, training, procurement of production equipment, and business licensing. While business relationships can get through transactions such as purchasing, selling, land leasing, loan of capital, saving of money, and transfer of money. Informal institution relations occur in every agro-industry activity, starting from procurement of raw materials, auxiliary materials, processing, and marketing products. Formal institution relations occur in processing and marketing products.