Prabowo: Village Cooperatives are Built to Break the Chain of Rentenir

JAKARTA - President Prabowo Subianto emphasized that the Red and White Village Cooperative was built to break the farmers' dependence on usurers and cut the length of the distribution chain of basic commodities.

Prabowo said farmers have been bearing interest on loans that can reach one percent per day. The burden makes it difficult for them to get out of poverty.

"Rentenir lives by sucking the blood of our farmers. With one percent interest a day, it is impossible for them to rise," said Prabowo in the Plenary Cabinet Meeting at the State Palace, Jakarta, Monday (20/7/2026).

The government has started operating 1,000 village cooperatives. By the end of 2026, the number of cooperatives in operation is targeted to reach 30,000.

Prabowo emphasized that cooperatives should not only stand on paper. Each cooperative will be equipped with warehouses, cooling rooms, transport vehicles, generic medicine outlets, and workshops.

The facility was prepared so that farmers would not be forced to sell their crops at low prices because they did not have storage space.

Prabowo also highlighted the length of the chain of trade in basic commodities. So far, farmers' produce has passed through collectors, distributors, sub-distributors, wholesalers, and retailers before reaching consumers.

Based on the study of the Ministry of Agriculture quoted by Prabowo, the middleman takes a margin of around 30 to 40 percent. The value is estimated to reach IDR 313 trillion.

"What farmers enjoy is only 30 percent. About 40 percent is enjoyed by middlemen," he said.

Through village cooperatives, the government wants to reduce the distribution margin to around 5 to 10 percent. The difference is expected to return to farmers and consumers.

Prabowo estimated that improvements in the supply chain could make around Rp250 trillion circulate at the lower community level.

Cooperatives will also become a distribution network for subsidized goods from the center to the village. The government hopes that the system can prevent hoarding and help control inflation, especially ahead of religious holidays.

Prabowo admitted that the implementation of the program still faced problems with electricity, water, internet, and potential for corruption. He promised to take action against managers who seek personal gain.

"We will not be selective and we will not pick and choose," he said.