• Indra Maipita University of Medan
  • Wawan Hermawan Padjajaran University
  • Fitrawaty Fitrawaty University of Medan


This paper analyzes the impact of fuel subsidy diversion to Non-Food Crops sector on income levels, using AGEFIS; a Computable General Equilibrium model. Then we proceed to apply the Foster-Greer-Thorbecke (FGT) index to measure the indicators of poverty (head count index, poverty gap index and poverty severity index). The simulation result shows the fuel subsidy diversion to Non-Food Crops sector provides a positive impact on increasing household incomes and poverty reduction. Furthermore, the fuel subsidy diversion to Non-Food Crops sector reduces the poverty of rural household, larger than the urban households.


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How to Cite
Maipita, I., Hermawan, W., & Fitrawaty, F. (2012). REDUCING POVERTY THROUGH SUBSIDIES: SIMULATION OF FUEL SUBSIDY DIVERSION TO NON-FOOD CROPS. Buletin Ekonomi Moneter Dan Perbankan, 14(4), 369-388.