Role of the Agricultural Sector in West Nusa Tenggara's Economic Structure and Downstream Challenges

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FORMOSA NEWS

A research team from the Faculty of Economics and Business at the University of Mataram, consisting of Intan Azura, Baiq Saripta W, and Muhammad Dzul Fadlli, examined the economic structure, multiplier values, and inter-sectoral linkages of the agricultural sector in West Nusa Tenggara Province in 2026. This research is crucial amidst regional development challenges as it provides an in-depth evaluation of the agricultural sector's capacity to drive economic activity amidst regional growth fluctuations.

Historically, West Nusa Tenggara's economic structure is heavily dominated by the agricultural sector. According to Central Statistics Agency (BPS) data, the agricultural sector's Gross Regional Domestic Product (GRDP) in the region increased from IDR 18.92 trillion in 2015 to IDR 22.99 trillion in 2024. However, growth rates in this sector have fluctuated, experiencing a contraction of -0.41 percent in 2020. This condition shows that a large sectoral contribution is not automatically followed by strong cross-sector integration to create evenly distributed economic impacts.

To dissect these dynamics, the researchers employed a quantitative approach utilizing Input-Output (I-O) analysis based on NTB's 2016 Input-Output table, which covers 17 sector classifications. Through the Leontief matrix model, this analysis measures output distribution, intermediate inputs, final demand, gross value added, and the strength of inter-sectoral linkages within the regional production system.

Based on findings published in the Contemporary Journal of Applied Sciences in July 2026, several key points were uncovered:

• Most of the agricultural sector's output is absorbed to meet final demand, such as household consumption and inter-regional exports.
• Meanwhile, its utilization as intermediate inputs by other industries remains relatively limited.
• The agricultural sector's output multiplier value is recorded at 1.175910. This means every single-unit increase in final demand within agriculture will boost total economic output by 1.175910 units.
• The backward linkage value stands at 1.175910, indicating a level of agricultural dependence on input supplies from other sectors that is slightly above average.
• The forward linkage value is significantly higher at 2.170587. This proves that the agricultural sector's primary role in NTB is acting as a raw material supplier for downstream sectors such as processing industries, trade, and transportation.

These findings provide strategic implications for regional economic development policymaking. According to the University of Mataram researchers, the high forward linkage value indicates an urgent need to strengthen agriculture-based downstream processing. By developing local processing industries, regional governments and business actors can increase commodity added value, expand employment opportunities, and maximize multiplier effects for community welfare in West Nusa Tenggara.

Author Profiles:

• Intan Azura – Researcher and academic at the Faculty of Economics and Business, University of Mataram.
• Baiq Saripta W – Researcher at the Faculty of Economics and Business, University of Mataram.
• Muhammad Dzul Fadlli – Researcher at the Faculty of Economics and Business, University of Mataram.

Research Sources:

• Article Title: Analysis of the Structure, Multiplier and Role of the Agricultural Sector in the Economy West Nusa Tenggara
• Journal Name: Contemporary Journal of Applied Sciences (CJAS), Vol. 4, No. 7, July 2026, pages 715-720
• DOI / Official URL: https://doi.org/10.55927/cjas.v4i7.204