Government to Make Village Cooperatives a Hub for Food Distribution and Subsidies

Minister of Cooperatives Ferry Juliantono has affirmed that the government is restoring cooperatives as the mainstream of the national economy through the Koperasi Desa/Kelurahan Merah Putih (KDKMP) programme. In addition to strengthening the people’s economy, cooperatives will be made a state instrument to cut the distribution chain for staple goods and subsidies, which has been considered too lengthy. Ferry conveyed this during the SAJID Friday Morning Talk organised by the Indonesian Muslim Journalists Union (SAJID) at the AQL Islamic Center, Jakarta. The event was hosted by SAJID Chairman Bachtiar Nasir and attended by journalists from various media outlets. Ferry stated that cooperatives have strong historical roots in the journey of the Indonesian nation. According to him, HOS Tjokroaminoto was one of the early figures who introduced the idea of cooperatives, before it was further developed by Mohammad Hatta after studying cooperative practices in Europe. He assessed that cooperative values, such as mutual cooperation, equality, and kinship, are in line with Islamic teachings as well as the character of Indonesian society. Consequently, cooperatives were positioned as the pillar of the national economy, as reflected in Article 33 of the 1945 Constitution. Ferry explained that during the era of the National Planning Council, cooperatives were positioned as an important part of the Overall Planned Development Pattern through the concept of democratic rural development. According to him, up until the 1980s, cooperatives developed in various strategic sectors. Cooperatives did not only operate in savings and loans but also managed livestock, agriculture, plantations, and the distribution of harvests through Village Unit Cooperatives. Cooperatives also once had an industrial base through the Indonesian Batik Cooperatives Association and established a financial institution through the Indonesian Cooperative Bank, or Bukopin. However, Ferry assessed that the role of cooperatives began to weaken after the economic crisis in the late 1990s. He said a number of policies born from the Letter of Intent with the International Monetary Fund (IMF) encouraged a reduction in the state’s role in regulating the economy and made market mechanisms more dominant. ‘That condition made large economic players even stronger, while cooperatives and small business actors were left further behind,’ Ferry said.