Indonesia’s Ministry of Cooperatives is urging village-based cooperatives to prioritize locally made goods in an effort to strengthen domestic supply chains and lessen reliance on imports amid growing economic pressures.
Prioritizing Local Products
“All local products must be absorbed by cooperatives,” said Ahmad Zabadi, secretary at the Ministry of Cooperatives, emphasizing the government’s focus on anchoring economic growth at the village level.
The government-backed Red and White Village Cooperatives are intended to serve as aggregators for micro and ultra-micro enterprises, collecting products from small producers and distributing them to wider markets.
Expanding Village Cooperative Roles
Zabadi stressed that village cooperatives should evolve beyond simple trading, incorporating processing, packaging, and modern production standards to enhance the value and competitiveness of locally-based goods.
Cooperatives are also expected to encourage local entrepreneurs to increase production of daily necessities to reduce dependence on imported consumer goods.
Beyond supporting producers, these cooperatives will ensure public access to subsidized essentials – including liquefied petroleum gas (LPG), rice, and medicines – at government-regulated prices. Price distortions caused by middlemen have weakened purchasing power and undermined subsidy programs.
Cooperatives are expected to shorten distribution chains and improve price transparency, particularly in rural and remote areas. They will also act as intermediaries for fishers and farmers seeking subsidized fuel and fertilizers, stabilizing production costs in key food sectors.
Supporting Government Programs
The Red and White Village Cooperatives will support the government’s Free Nutritious Meals (MBG) program by supplying raw materials sourced from local producers, consolidating dairy farmers and other food producers to meet national demand.
The Ministry of Cooperatives is accelerating the construction of cooperative outlets, warehouses, and supporting infrastructure nationwide, with the goal of having the Red and White Village Cooperatives fully operational by next year.
Discover more from Archyworldys
Subscribe to get the latest posts sent to your email.
