Government to Cut Agricultural Supply Chain via 'Red and White' Village Cooperatives

Jakarta (ANTARA) — Agriculture Minister Andi Amran Sulaiman said the government will shorten the agricultural supply chain from eight links to three through the Red and White Village/Urban Ward Cooperatives (Koperasi Desa/Kelurahan Merah Putih, KDKMP).

“In the agricultural sector, the main function is to cut the supply chain — from eight links to three,” Amran said at a press conference on the draft Presidential Regulation on KDKMP Governance held in Jakarta on Tuesday.

Amran explained that the three-link supply chain would run from farmers to cooperatives, and from cooperatives to the community.

He said the government had once calculated that, across nine agricultural commodities, middlemen in the agricultural sector pocket profits of around Rp313 trillion.

“Say the cooperatives take just Rp50 trillion — that means some Rp263 trillion can be enjoyed by farmers,” said Amran.

That Rp263 trillion, he added, would circulate in villages, creating a people-based economy.

Beyond cutting the supply chain, Amran said the KDKMP would also give farmers easier access to fertiliser sales points.

“So fertiliser will no longer be far from our farmers, because it will be available in the villages,” he said.

Amran therefore believes that if every village has a Red and White cooperative, money will circulate within the village, the supply chain will be shortened, farmers’ welfare will improve, and public purchasing power will subsequently rise.

The government is targeting around 25,000 Red and White Village Cooperatives to begin operating between August and September 2026, with the number expected to grow to 35,862 units by the end of the year.

Coordinating Minister for Food Zulkifli Hasan (Zulhas) expressed hope that the Presidential Regulation governing KDKMP management can be finalised this week to serve as the operational foundation of the programme.

“Hopefully the governance rules will be completed this week so that everyone has the same guidelines,” said Zulhas.