Village cooperatives won't harm community businesses: Minister

“I would like to stress that village cooperatives are not stores; they are not supermarkets. Rest assured, there will be no issues for warungs and all sorts of retail outlets. All businesses can complement one another,” he remarked in Jakarta on Tuesday.

Speaking at a press conference on the draft presidential regulation on KDMP implementation, Hasan noted that village cooperatives are intended to serve as supporting infrastructure for expanding the distribution of subsidized goods and social welfare assistance.

He added that the government also envisions KDMPs serving as offtakers for locally produced agricultural commodities, particularly unhusked rice.

As offtakers, he continued, village cooperatives are expected to protect farmers from unfavorable prices for their produce offered by middlemen.

Hasan explained that state-run logistics company Bulog has been assigned to partner with village cooperatives in purchasing unhusked rice from farmers at prices no lower than the guaranteed minimum set by the government.

He also highlighted the possibility of KDMPs expanding their role, including by helping develop the tourism potential of their host villages.

“However, they are primarily designed as infrastructure [for subsidies and aid] and offtakers,” the minister remarked.

He pointed out that the government aims to have 25,000 village cooperatives operating by September 2026, with the number projected to reach roughly 36,000 by the end of the year.

To that end, a presidential regulation is being drafted to provide a strong legal basis for cooperative operations.

“Hopefully, the formulation will be finalized this week so that all have the same reference,” he said.

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Translator: P.I. Savitri, Tegar Nurfitra