This paper aims to formulate regional development policy design based on local competencies. With a case study in Asahan District Nort Sumatra Province this paper reviews the extent of local competence which has been used as regional development policy especially in developing the leading sectors. The results show that Asahan have sufficient competence to support the agricultural sector development as their dominant sector. However Asahan people have not used the agricultural sector to support their growth optimally. Local government policies have not comprehensively supported the development of the agricultural sector which in indicated by a lack of budgetary allocation to seed sector development lack of adequate agricultural infrastructure lack of coordination between relevant agencies in developing leading sector and the unclear direction of the economic development. To overcome various problems of slow growth of leading sector it is recommended that Asahan should make supporting policies to provide better development in agricultural sector. It can be done by integrating the development of upstream midstream to downstream of plantations activities attracting more investors to invest in the manufacturing sector. Finally leading sector development needs a synchronous between the real potency and its local competence such as the institutional capacity human resource capability and availability. sources of financing for the implementation of a systematic regional development planning in term of short medium and long term developmental stages.