Red and White Village Cooperative and BUMDes Synergize to Improve Village Economy
By: Bara Winatha*)
Efforts to equalize national economic development require a strategy that directly touches the grassroots, especially village communities. Within this framework, the government is encouraging synergy between the Red and White Village/Sub-district Cooperative (Kopdes/Kel Merah Putih) and Village-Owned Enterprises (BUMDes) as the main drivers of the local economy. This collaboration is expected to accelerate sustainable village economic growth, strengthen food security, and expand access to capital and financial services for village communities.
The Coordinating Minister for Food who is also the Chairperson of the Red and White Kopdes Steering Committee, Zulkifli Hasan, said that the Red and White Cooperative program is an implementation of Presidential Instruction Number 9 of 2025, which targets the formation of 80,000 active village cooperatives throughout Indonesia. He explained that initial funding of up to IDR 3 billion will be disbursed to each cooperative in the form of a revolving loan with a tenor of six years. These funds are not grants, but must be managed professionally and responsibly by the cooperatives that submit the establishment proposal. The verification process is carried out by the banking sector to ensure transparency and accountability.
The Red and White Cooperative is designed as a community empowerment institution. Its role complements the function of BUMDes which has so far been a strategic instrument for villages in managing local potential. The synergy between the two strengthens the competitive village economic ecosystem, with a clear division of roles. BUMDes can focus on managing village-based assets and public services, while Kopdes Merah Putih focuses on providing savings and loan services, managing subsidized commodities, and distributing basic necessities efficiently wholesale.
One important aspect in strengthening the role of village cooperatives is the acceleration of the legalization of cooperative legal entities. The Minister of Cooperatives, Budi Arie Setiadi, said that the cost of making a notary deed is now only IDR 2.5 million, much cheaper than before, which could reach IDR 7 million. This step is a form of support for villages that have had difficulty forming cooperatives due to administrative and budget constraints. He hopes that this cost efficiency can encourage the acceleration of the formation of cooperatives in all villages and sub-districts in Indonesia.
Village Cooperatives will receive privileges in the procurement and distribution of subsidized commodities such as rice, cooking oil, LPG, and fertilizer. With a wholesale purchasing scheme by cooperatives, the selling price to the community can be reduced, thus stabilizing prices at the village level. Cooperative profits will also be returned to cooperative members, creating an inclusive and sustainable economic cycle.
Minister of Tourism, Widiyanti Putri Wardhana, said that cooperatives can become official institutions that facilitate access to financing and training for local tourism actors. She said that currently 17 tourist villages have been designated as pilot projects for the tourism-based cooperative strengthening program, with plans to expand to thousands of tourist villages throughout Indonesia.
This step is in line with the government’s major mission to develop tourist villages as one of the backbones of the community-based economy. Collaboration between Kopdes Merah Putih and BUMDes in this sector will create stronger institutions in managing local potential. Widiyanti added that cooperatives provide a strong legal and managerial foundation, while BUMDes bridges the involvement of the village government in program planning and supervision.
The synergy between cooperatives and BUMDes also opens up opportunities for the integration of inclusive financial service systems at the village level. In some cases, cooperatives can work with Regional Development Banks (BPD) or microfinance institutions to provide access to loans for farmers, fishermen, and small business actors in villages. This scheme will help improve the financial literacy of village communities so that they are able to manage their businesses better.
No less important, this program also supports efforts to strengthen national food security. With cooperatives actively purchasing agricultural products directly from farmers, and BUMDes facilitating distribution and marketing, the food distribution chain becomes more efficient and fair. Farmers get fair prices, and village communities get basic necessities at affordable prices.
Several provinces have started concrete steps by holding coordination meetings, legal assistance, and distributing notary deeds symbolically in various villages. One of them is by setting a deadline for the formation of cooperatives until May 31, 2025, with the official launch of the program scheduled for July 12, 2025. This shows that the central and regional governments are working hand in hand to ensure that the program runs on target.
