Indonesia to channel subsidies, social aid via village cooperatives

Red and White Village Cooperatives will engage in microfinance, warehousing, and productive businesses tailored to each host village’s potential and needs,

Cimahi (ANTARA) - The Indonesian government plans to enhance the distribution of subsidized commodities and expand social welfare programs through facilities under the Red and White Village Cooperatives (KDMP) scheme to stimulate rural economies.

During a visit to Cimahi City, West Java, on Friday, Cooperatives Minister Ferry Juliantono said village cooperatives are designed to improve access to subsidized products such as 3kg LPG cylinders, fertilizer, rice, and cooking oil.

He noted that President Prabowo Subianto had emphasized this approach in his recent speech commemorating National Cooperative Day.

Juliantono further described the policy as a strategic tool to strengthen cooperatives’ role in the national economy while improving the distribution of staple goods.

The minister also highlighted the strategy to involve KDMPs in expanding the reach of social welfare programs, including direct cash assistance, social aid, and non-cash food programs.

In addition to extending government programs, he continued, village cooperatives are intended to serve as rural economic hubs through basic commodity trading, MSME development, microfinance services, warehousing, and logistics.

He went on to say that the government envisions village cooperatives operating storage facilities for commodities produced by villagers across agriculture, plantations, fisheries, and crafts while also providing residents with essential production inputs.

“Red and White Village Cooperatives will engage in microfinance, warehousing, and productive businesses tailored to each host village’s potential and needs,” the minister added.

On microfinance, Juliantono confirmed plans to encourage banks to partner with village cooperatives to help channel the People’s Business Credit (KUR) scheme to local residents.

He stressed that involving village cooperatives in government schemes is aimed at simplifying distribution chains and reducing the risk of inaccurate targeting in welfare initiatives.

“This is a decision that will determine the direction of our economic system and practice,” he affirmed.

He expressed hope that the KDMP program would better align public policy with community needs and restore cooperatives' role as a pillar of the national economy alongside state-run enterprises and the private sector.

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Translator: I. Nugraha, Tegar Nurfitra

Editor: M Razi Rahman

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