The Merah Putih Village Cooperative Becomes a Key Instrument for National Economic Equity
By: Juanda Syah*
The government continues to strengthen its commitment to promoting national economic equality through the development of village cooperatives as new epicenters of community economic activity. This initiative is realized through the operation of the Merah Putih Village/Sub-district Cooperatives (Kopdes/Kel), which are directed not only to serve as institutions that distribute basic community needs but also to become driving forces for a productive economy at the grassroots level. This strategic step is concrete evidence of the state’s commitment to developing the village economy, not just from the top down, but from the bottom up in an inclusive and sustainable manner.
President Prabowo Subianto’s explicit instructions position village cooperatives as the center for managing local production and as a distribution hub for subsidized staple goods. With this new paradigm, cooperatives are no longer treated merely as administrative institutions but as competitive, professional, and empowered people’s businesses. This transformation paves the way for village communities to become more than just recipients of aid, but also independent economic actors that collectively manage their region’s potential.
The Minister of Cooperatives, Ferry Juliantono, stated that cross-sector consolidation was carried out to ensure that each Red and White Village Cooperative (Kopdes Merah Putih) is equipped with adequate and standardized supporting infrastructure. The availability of storage warehouses and sales outlets is an absolute prerequisite for cooperatives to fulfill their dual function of collecting agricultural products and providing for the community. Thus, village cooperatives not only regulate the flow of incoming goods but also control the flow of outgoing goods, thereby maintaining economic added value within the village itself.
Ferry Julianto emphasized that the government is targeting the establishment and financing of 1,000 cooperatives, with financial support from member banks of the Association of State-Owned Banks (Himbara) and the Revolving Fund Management Institution (LPDB). This financing scheme covers not only working capital but also physical investments in the construction of warehouses, outlets, and operational facilities. Solid cross-institutional synergy is underway. The Ministry of Finance has allocated a supporting budget, state-owned banks are ready to provide credit development for cooperatives, and various State-Owned Enterprises (BUMN) are assisting in the procurement of supporting infrastructure.
More than 10,000 cooperatives have registered in the Simkopdes system, and most have submitted financing proposals. However, the government is now implementing new standards requiring every proposal to include a physical investment plan to ensure that cooperatives truly fulfill their intended function. This policy marks a shift in the orientation of cooperatives from merely managing revolving capital to economic institutions with a robust structure and tangible assets.
In addition to financial and infrastructure support, the government is also strengthening human resources. The Ministry of Cooperatives is collaborating with Government Employees with Work Agreements (P3K), sub-district task forces, and regional coordinators from various ministries to ensure intensive mentoring at every stage of cooperative formation. Training for cooperative administrators is a priority so that institutional management is not merely administrative but also based on efficient and accountable professional management. Thus, village cooperatives will grow into modern business entities managed transparently and generating profits for members and the surrounding community.
Support for the Red and White Village Cooperatives program also comes from the investment sector. Danantara Chief Operating Officer, Dony Oskaria, expressed his readiness to develop a viable and sustainable cooperative business model. Through synergy with PT Agrinas Pangan Nusantara (Persero), a state-owned food enterprise, Danantara has designed a cooperative business ecosystem that does not rely solely on a single commodity but rather integrates the production, distribution, and processing sectors. With this business design, village cooperatives will not only be small business units but will grow into local economic centers capable of competing in the national supply chain.
This cooperative ecosystem development plan also includes the formation of networks between cooperatives in various regions, creating mutually reinforcing economies of scale. Cooperatives in food-producing areas can start with cooperatives in consumption areas, while cooperatives engaged in processing can become partners with cooperatives supplying raw materials. This connectivity pattern will reduce village dependence on middlemen and shorten the distribution chain, which has been a major obstacle for farmers and micro-entrepreneurs in villages.
