Analisis Dampak Subsidi Harga Output terhadap Kesejahteraan Masyarakat

Subsidy is one of the most popular policy instruments used by a government to support its agricultural sector. In Indonesia, this subsidy presents in the form of input subsidy and price subsidy. This paper analyzes the impact of price subsidy to the welfare of the society. Using multimarket analysis and welfare maximizing function approach, the study shoivs that there is a correlation between elasticity of demand & supply of a commodity and optimal subsidy; the more inelastic demand and supply of one commodity, the larger the differences between optiinal price and the market price of that commodity. Regarding the agricultural commodity, the demand and supply of this commodity is actually considered to be inelastic, therefore there would be large differences between optimal price and the market price of the agricultural commodity. In order to make these differences narrowed, the government could play an important role, by pushing the market price toward its optimum price. This role is significant, since the large differences between market price and optimum price would make the effort to increase farmers' welfare difficult to be fulfilled.