The Indonesian government is sticking to its plan of setting up 70,000 so-called ‘Merah Putih’ or Red and White cooperatives that will function as food distributors at the rural level by July. The ambitious proposal is now waiting for Presidential approval by May this year.
Indonesia plans to set up cooperatives across tens of thousands of its villages to simplify the food distribution chain. These cooperatives are expected to take out the middlemen in the distribution. This way, farmers can get their products directly to the consumers in the urban areas through these cooperatives, thereby making food more affordable.
Each cooperative will get an initial capital of between Rp 3 billion and Rp 5 billion (starting from $180,000 to $305,000). According to Cooperatives Minister, Budi Arie Setiadi, the proposal called for a robust legal framework to ensure the businesses’ transparency. Budi added, “We should be prudent. These Merah Putih cooperatives need to be managed transparently, professionally, and responsibly.”
As to how the Indonesian government going to manage or monitor these cooperatives and ensuring fair prices and product quality is still unclear.
