Cutting Out Middlemen, Amran Says Kopdes Could Save Rp263 Trillion
The Ministry of Agriculture is beginning to promote a new food distribution scheme through Red and White Village/Urban Village Cooperatives, with the main target of reducing the dominance of middlemen while redirecting large profits directly to farmers and rural communities.
Agriculture Minister Amran Sulaiman assesses that the current food supply chain is too long and inefficient. The numerous distribution channels cause profit margins to accumulate with intermediaries (middlemen) rather than producers.
The Ministry’s calculations show that the margins enjoyed by middlemen range from 10% to 30%. When accumulated, the value reaches around Rp313.08 trillion, a figure deemed a major leakage in the national food system.
Through the Red and White Village Cooperative scheme, the distribution flow is drastically shortened, from farmers directly to cooperatives in the village, then to end consumers. With this model, margins are estimated to shrink to around Rp50 trillion. This means there is potential for about Rp263 trillion to be redirected back to farmers and the village economy.
“This is why the Red and White Cooperative is being built. From farmers, directly to the cooperative in the village, to consumers. What does this mean? If the cooperative’s profit is Rp50 trillion, this (potential margin) is Rp263 trillion, this is divided as farmers’ income, and this becomes purchasing power. NTP (farmers’ exchange rate) rises, this also increases purchasing power,” said Amran during a visit to the JDP Karawang 1 Logistic Park Warehouse in Karawang on Thursday (23/4/2026).
Statistics Indonesia data records the Farmers’ Exchange Rate (NTP) in March 2026 at 125.35, down slightly by 0.08% from the previous month. The government hopes this new distribution model can reverse that trend.
Not only about efficiency, Amran also highlighted fraudulent practices in the field, including manipulation of rice quality sold at inappropriate prices. According to him, this condition further pressures consumers while harming farmers.
“Middlemen, the quickest solution is indeed cooperatives,” he added.
The Red and White Village Cooperative is also projected to become the main absorber of agricultural products through the Free Nutritious Meals (MBG) programme. With a clear offtaker, farmers’ production is expected not to be wasted due to oversupply.
“MBG, offtaker from 160 million Indonesian farmers. Offtaker. So they buy, we won’t hear anymore recently, tomatoes being thrown away. Why? There’s MBG waiting. So MBG doesn’t stand alone,” he explained.
Furthermore, the government views strengthening the Red and White Village Cooperative as a new engine for rural economic growth. If money circulation continues to occur in the village, the impact is believed to multiply to thousands of trillions of rupiah, while also holding back economic flows from being continuously sucked into the city.