Deputy home affairs minister urges KDKMP to become integrated village economic service centers

Indonesia’s Merah Putih village and urban-village cooperatives should become integrated economic service centers, not simply competitors to convenience stores, Deputy Home Affairs Minister Bima Arya said.

Speaking at a national KDKMP seminar in Bandar Lampung, Bima said the cooperatives should connect residents’ needs, government services, business units and strategic partnerships. “KDKMP will become an integrated village economic service center. Savings and loans are only one part. It could include a basic-goods store, a pharmacy, and all subsidized goods could be officially distributed through KDKMP,” he said.

Bima said the cooperatives could shorten supply chains and reduce the role of intermediaries. That, he said, could raise prices received by farmers while lowering prices for consumers. The cooperatives are also expected to help control inflation and create jobs in villages.

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KDKMP will become an integrated village economic service center. Savings and loans are only one part. It could include a basic-goods store, a pharmacy, and all subsidized goods could be officially distributed through KDKMP.

Their planned functions include distributing social assistance and direct cash transfers, as well as subsidized SPHP rice, fertilizer and liquefied petroleum gas. KDKMP is also being encouraged to build an ecosystem around the Free Nutritious Meals program, with the cooperative acting as an aggregator capable of generating wider local economic effects.

Management remains in a transition period expected to last about two years. During that period, PT Agrinas Pangan Nusantara is managing the cooperatives through appointed personnel receiving further training, while incorporating input from village and urban-village leaders. After the transition, KDKMP is intended to become an asset owned by the village or urban village.

Bima cited examples of progress, including KDKMP Sidomulyo in Jember, which has exported coffee to three countries, and a cooperative in Southeast Sulawesi that has entered the Chinese market. East Java, he said, recorded the highest KDKMP transaction value nationally. He added that local governments would play a central role from planning through implementation.

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KDKMP brings together, first, the needs of the community, second, government services, and third, which is important and interesting, business services.