Govt-backed village co-ops can become new source of revenue: economist

Jakarta (ANTARA) - The government-backed Red and White Village Cooperatives could unlock a new source of village revenue if their various business units are run professionally, according to an Institute for Development of Economics and Finance (Indef) economist.

M. Rizal Taufikurahman, head of Indef’s Center of Macroeconomics and Finance, said the village cooperatives could boost village economic activity while contributing to village revenue.

This would be achieved through various businesses run by the cooperatives, such as staple goods outlets, fertilizer supply, logistics, as well as savings and loan services.

"Their contribution to village revenue can indeed increase annually. However, the main prerequisite is that the cooperatives must generate sustainable profits, rather than just relying on government capital injections," he said when contacted in Jakarta on Friday.

Taufikurahman underscored that contributing to village revenue is only possible if the cooperatives maintain a healthy business model and sustain long-term growth.

He explained that, in principle, cooperatives should not just function as an economic institution that distributes profits. They also need to build their business capacity to ensure continuous growth and deliver greater benefits to the community.

Beyond boosting village revenue, he noted that the village cooperatives could enhance community welfare through the various economic benefits generated by their business activities, including the distribution of net cooperative income.

In line with cooperative principles, members are the primary beneficiaries of net income distributions, as they invest capital and trade within the cooperative.

Meanwhile, he added, village residents who have not yet joined can still benefit indirectly through access to affordable staple goods, easier access to financing, and increased job opportunities.

Minister of Villages and Development of Disadvantaged Regions Yandri Susanto has stated that 80 percent of profits made by Red and White Village Cooperatives will be returned to the village communities, while the remaining 20 percent will go toward village revenue.

According to him, the presence of the village cooperatives will also bolster village economic independence, as the business assets built will eventually belong to their respective villages.

These assets include warehouses, distribution trucks, operational vehicles, and other business support facilities.

Related news: Indonesia moves to finalize regulation for village cooperatives

Related news: Danantara says government bankrolls village cooperatives program

Translator: Shofi Ayudiana, Raka Adji

Editor: Primayanti

Copyright © ANTARA 2026