Government Guarantees 'Red and White' Village Cooperatives Will Not Kill Small Businesses

The Coordinating Minister for Food, Zulkifli Hasan, widely known as Zulhas, has given assurances that the Red-and-White Village Cooperatives (Kopdes Merah Putih) will not destroy small community-owned shops or similar micro, small and medium enterprises (MSMEs).

At a press conference on the draft Presidential Regulation on the Governance of the Kopdes Merah Putih programme, Zulhas explained that the cooperatives’ function is to serve as government infrastructure for channelling subsidised goods and government aid.

“Let me clarify: these cooperatives are not shops, not supermarkets. So there is no need for small warungs or retailers to worry; they can complement one another,” said Zulhas in Jakarta on Tuesday, 28 July 2026.

He added that the Kopdes Merah Putih will also act as an offtaker, or buyer, of agricultural products such as rice and unhusked grain.

“In regions where the government sets the price of unhusked grain at Rp 6,500 but middlemen are only buying at Rp 5,000, the cooperatives can purchase at Rp 6,500, in cooperation with Bulog,” he said.

Looking ahead, Zulhas believes that if the Kopdes Merah Putih develop well, they could also enable the growth of tourist villages, thematic villages and other initiatives.

“But the most fundamental functions, as I said, are as infrastructure for distributing subsidies and as an offtaker,” said Zulhas.

The government is targeting around 25,000 Kopdes Merah Putih to begin operating between August and September 2026, with the number expected to rise to 35,862 units by the end of the year.

Zulhas expressed hope that the Presidential Regulation governing the management of the Red-and-White Village/Urban Ward Cooperatives (KDKMP) can be finalised this week, to serve as the operational foundation of the programme.

“Hopefully the governance arrangements will be completed this week so that everyone has the same reference point,” he said. (Ant)