Middlemen to Be Sidelined - Social Aid to Avoid Leakage, Here's Why

The government is preparing the Merah Putih Village Cooperative (KopDes) as a driver of rural economic activity, with functions extending beyond conventional cooperatives. In addition to serving as a centre for economic activities, KopDes is designed as a tool for price intervention and the distribution of social aid to ensure it reaches the right targets. “The aim of this KopDes is to create centres of economic growth in villages,” said Coordinating Minister for Food Affairs Zulkifli Hasan at the Coordinating Ministry for Food Affairs office on Monday (4/5/2026). This cooperative will act as an off-taker for the production output of village communities. That means the harvest from village residents will be absorbed by KopDes Merah Putih. “If the price in the market is below what we determine, then KopDes can buy. So it acts as an off-taker,” he said. With this mechanism, farmers will no longer be entirely dependent on middlemen who have long dominated the distribution chain. On the other hand, KopDes will also serve as the government’s infrastructure for distributing social aid. “Aid such as PKH, scholarships, fertiliser subsidies, and gas will be channelled through KopDes,” said Zulkifli. He emphasised that this system will ensure aid is truly received by those who deserve it. “Not because of closeness to the village head, but truly those who are eligible,” he stressed. The government assesses that to date, much aid has not reached the right targets due to weaknesses in the local distribution system. Through KopDes, data and distribution will be more integrated, thereby reducing the potential for leakage. This programme is also part of efforts to equalise development between urban and rural areas. “The President’s attention to villages and coastal areas is extraordinary,” said Zulkifli.