Economic sage Prof.\u00a0Dr.\u00a0Soemitro Djojohadikusumo once remarked on\ncooperatives, stating, \u201cCooperatives must be managed professionally and\nnot merely as charitable institutions. As long as we position\ncooperatives as \u2018institutions for the poor\u2019, we should not be surprised\nif only those with no other options join.\u201d Sadly, this years-old\nobservation now appears prophetic regarding the Village\nCooperatives\/Koperasi Merah Putih (KDKMP).<\/p>\n
The misdirection of KDKMP, as signalled by Prof.\u00a0Soemitro, is evident\nin various media reports. Issues range from the deduction of Village\nFunds to finance the programme, the potential for failure due to minimal\nfeasibility studies, to discussions of restricting modern retail that\nare seen as stifling competition. The most recent development is the\nrecruitment of managers for KDKMP to be placed across Indonesia, an\nunprecedented move in the history of the cooperative movement.<\/p>\n
Yet, according to the Father of Indonesian Cooperatives, Bung Hatta,\nthe essence of a cooperative is a people\u2019s economic movement based on\nfamily spirit and mutual cooperation. Hatta\u2019s core views define\ncooperatives as a joint business platform, a means to improve economic\nlivelihoods through mutual assistance, a rejection of individualism, and\na tool to achieve equitable public prosperity. Thus, a cooperative is\nnot merely a business tool, as has been touted for KDKMP\u2014a place to sell\ngoods like a retail shop, reducing KDKMP to nothing more than a\nminimarket.<\/p>\n
My book, \u2018Strengthening Koperasi Merah Putih Through Local Products\nBased on Collective Brands\u2019, clearly outlines prerequisites to prevent\nKDKMP from suffering the same fate as the Village Unit Cooperatives\n(KUD) of the New Order era. First, the cooperative must not just be a\nretail shop but must optimise local products from the surrounding\ncommunity where it operates. From this, the goal of KDKMP as an agent of\ncommunity empowerment and a driver of the local economy can be achieved.\nSecond, choosing to become a production cooperative is the best path\namidst the turbulence surrounding the use of state budget-sourced\nvillage funds. This approach allows for the expansion of cooperative\nmembership optimisation. Third, the progress of a cooperative is\ndetermined not by quantity, but by quality. Stakeholders must learn from\ncountries that have successfully developed cooperatives, so that KDKMP\ndoes not spring up like mushrooms in the rainy season, only to wither\nand die.<\/p>\n
This proposal is linked to another flagship government programme, the\nFree Nutritious Meals (MBG) initiative. In implementing the MBG\nprogramme, a major challenge is ensuring the availability of quality,\nsustainable foodstuffs from local sources. In this context, KDKMP can\nact as an aggregator\u2014an institution that collects, coordinates, manages,\nand distributes products from various local businesses to the MBG\nprogramme organisers. The role of aggregator transforms the cooperative\nfrom merely a business entity into a bridge between local producers and\na large, guaranteed market, thereby creating a more efficient and\ninclusive food supply chain.<\/p>\n
To become an aggregator, a redesign of KDKMP is necessary. Most\ncrucially, the MBG kitchens or Nutritional Fulfilment Service Units\n(SPPG), which have been managed by foundations and are the \u2018root cause\u2019\nof the SPPG\u2019s lack of transparency and accountability, can be resolved\nby making KDKMP the MBG kitchens. This would be a unique attraction, as\nall local resources would be centralised within KDKMP, enabling its\nfunction as a tool for empowerment and a spark for the local\neconomy.<\/p>\n
KDKMP as an aggregator in the MBG programme positions it as a centre\nfor production consolidation, quality assurance, supply chain\nmanagement, and a link between local producers and the needs of a\nnational programme. This role allows the cooperative to consolidate its\nmembers\u2019 output to meet the required standards of quantity, quality, and\ncontinuity. If run professionally and based on cooperative principles,\nthe aggregator function not only supports the success of the Free\nNutritious Meals Programme but also returns the cooperative to its\noriginal purpose as a people\u2019s economic movement that strengthens\nmembers\u2019 bargaining power, creates collective added value, and builds\nvillage economic independence and national food security.<\/p>\n
In its development, the formation of KDKMP has been too focused on\nhow to sell products, giving rise to the retail shop label, rather than\non how to gather as many products from the surrounding community as\npossible to then be managed and distributed. This retail shop concept\nreduces cooperative members to mere investors who contribute capital,\nbut not parties who utilise the cooperative\u2019s services. This is because,\nunder the retail shop concept, members are only seen as consumers, so\neconomic benefits are not returned to members based on business\nparticipation. In reality, economic relationships within a cooperative\nare built on participation, not the dominance of capital.<\/p>\n
Instead of turning KDKMP into retail shops that displace or compete\nwith existing retailers, KDKMP should become a collaborator. The concept\nof KDKMP as a collaborator positions the cooperative as a strategic\npartner connecting local producers with a wider trade network. In this\nrole, KDKMP functions as an institution that consolidates members\u2019\nproducts, improves supply quality and continuity, and builds a mutually\nbeneficial distribution ecosystem. This collaborative approach aligns\nwith cooperative principles that prioritise cooperation, mutual\nassistance, and economic empowerment.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/redesigning-the-governance-of-village-cooperatives-kdkmp-1782222625", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }