The Indonesian government’s plan to set up tens of thousands of village-level cooperatives aims to stabilize food prices by cutting the middlemen out in its distribution, according to Agriculture Minister Andi Amran Sulaiman.
Work is underway to set up the so-called Merah Putih or ‘Red and White’ Village Cooperatives. Indonesia’s President Prabowo plans to establish these cooperatives in up to 80,000 villages in Indonesia. Approximately 64,000 farmer groups are also expected to transform into these cooperatives.
This new program aims to reduce reliance on middlemen in the food supply chain leading to more affordable food prices for Indonesians.
A ministry spokesperson said, “Food distribution used to involve 8 components within the supply chain but we will slash it to just 3 components, namely producers [farmers], cooperatives, and consumers.”
The ministry claimed that middlemen earned up to Rp 313 trillion (US$19.2 billion) as intermediaries in the distribution of essentials such as rice, corn, soybeans, chilies, shallots, and coffees.
Merah Putih Village Cooperatives will slash middlemen earnings from Rp 313 trillion (US$19.2 billion) to Rp 50 trillion (US$3 billion). In this way, farmers could earn more, while consumers will be able to buy essentials at more affordable prices.
