Merah Putih Cooperatives to Accelerate Distribution Chains and Lower Prices of Basic Necessities

Jakarta — The government continues to accelerate the establishment of Merah Putih Cooperatives as a strategic solution to shorten distribution chains and reduce the prices of basic commodities. This initiative is expected to improve the welfare of the people, especially in rural areas, while also helping to reduce extreme poverty in Indonesia.

Minister of Cooperatives, Budi Arie Setiadi, emphasized that these cooperatives are not merely economic institutions, but tools to create equitable economic justice.

“There are 3.1 million people in Indonesia living in extreme poverty. These cooperatives are a means to improve community welfare and advance both regions and villages,” said Budi.

The Merah Putih Cooperative initiative, spearheaded by President Prabowo Subianto, is targeted to grow to 80,000 units by the end of this year. Minister Budi Arie is optimistic that the cooperatives will serve as a frontline mechanism in streamlining the distribution of essential goods.

“Normally, basic goods go from factories to distributors, and then to markets or agents. But this time it’s different—raw materials from factories will go directly to the cooperatives without any middlemen,” explained Budi.

To ensure sustainability and professionalism, these cooperatives will be overseen and guided by 22 ministries.
“As business entities, cooperatives must be productive, and the goal is profit—there’s no such thing as a cooperative running at a loss. I always say, a cooperative must be profitable. What’s not allowed? Fraud, markups, and fictitious reporting. The profit goes to the members,” Budi firmly stated.

He also encouraged social assistance recipients (KPM) to become cooperative members, as future distribution of social aid and subsidized goods will be conducted through the Merah Putih Cooperatives.

“We are encouraging all KPM to become cooperative members, because in the future, social aid will be distributed through cooperatives. I see very high enthusiasm from the public toward this initiative,” Budi said.

In addition, Coordinating Minister for Food Affairs, Zulkifli Hasan, affirmed that the government has prepared initial capital injections of IDR 3 billion per cooperative, with a six-year repayment term.

“This is not a grant. In the initial phase, the loan ceiling is up to IDR 3 billion per cooperative, with a six-year tenor,” Zulkifli revealed.