Core Economist: Red And White Village Cooperatives Must Have A Business "mindset"

Executive Director of the Center of Reform on Economic (Core) Mohammad Faisal. (Photo: ANTARA)

JAKARTA - Executive Director of the Center of Reform on Economic (Core) Mohammad Faisal assessed that the establishment of the Red and White Village Cooperative must apply the principles of professionalism and a strong mindset of business to maximize profits and expand market reach for agricultural products in villages.

Faisal emphasized that cooperatives must operate like a professional and profit-oriented business unit even though they are based on the principle of togetherness. The profits obtained must also be for the interests of all members, not just a handful of parties.

"Including the system and the selection of people, people must be people who have business mindsets, not bureaucracy, not just work or administration," said Faisal as quoted by ANTARA, Wednesday, April 16.

Thus, members can get an increase in profits through expanding market reach, which then the profits are divided fairly according to the principle of togetherness.

He assessed that past experiences show cooperative failure is often caused by dependence on government assistance, poor governance, bad credit, even fraud and corruption practices.

Therefore, changes in mindset are considered crucial, as well as members and management of cooperatives must have a mindset of a businessman who moves naturally as a business unit, not just relying on external assistance, especially the government.

Furthermore, Faisal said, a strict monitoring and evaluation system is also very important in the implementation of the Red and White Kopdes activities.

This is necessary to identify success, constraints, and potential improvements, especially if cooperatives utilize funds from the State Revenue and Expenditure Budget (APBN) or the Regional Revenue and Expenditure Budget (APBD).

"So don't just expect the disbursement of APBN funds to be lost later, there are no marks, no results," he concluded.

President Prabowo Subianto has signed Presidential Instruction (Inpres) Number 9 of 2025 concerning the Acceleration of the Establishment of Village Cooperatives or Red and White Villages.

The government is currently continuing to disseminate information to local governments regarding the establishment of the Red and White Kopdes, which is targeted to be completed in July 2025.

The Red and White Village Cooperative will later be required to have seven business units to build a professional cooperative ecosystem in the village.

The seven aspects or business units that are required to exist in the ecosystem for the formation of the Red and White Kopdes, namely the cooperative office, food procurement kiosks, savings and loan business units, village/kelurahan health clinics, village/kelurahan pharmacies, warehousing systems or cold storage, and village/kelurahan logistics facilities.