INDONESIAN GOVERNMENT TO REFORM ITS COOPERATIVES

By Andi Abdussalam

          Jakarta, Dec 9 (Antara) - Cooperatives are not yet able to benefit people in an equitable manner, prompting the government to consider bringing in reforms and empowering them so that members benefit and the poverty rate comes down.
        Indonesia's Minister of Cooperatives and Small and Medium Scale Enterprises, Anak Agung Gede Ngurah (AAGN) Puspayoga, has announced plans to totally reform the cooperatives to ensure equitable economic benefits and cut down unemployment and poverty rates.
        The move will have a positive impact on the regional and national economic growth.
        The cooperatives reform program will be carried out through rehabilitation and database update. The government is also drafting a new cooperatives law which will serve as an effective legal basis for the development of cooperatives in the future.
        The draft law of cooperatives will replace Law No. 17 of 2012 which was scrapped by the Constitutional Court.    
   Law No. 17/ 2012 was issued to replace Law No.25 of 1992 which was seen as incapable of accommodating the interests of developing cooperatives.
         Deputy for Institutional Development of the Ministry of Cooperatives, Meliadi Sembiring, added that the draft law on cooperatives will accommodate all inputs from various quarters, including cooperatives stakeholders.



         Therefore, it is expected that it will be an improvement on  Law No. 17/2012 which was cancelled by the Constitutional Court. With the issuance of a new law and introduction of total reforms, cooperatives are expected to improve the welfare of the people and cut poverty rate.
         Minister AAGN Puspayoga noted that cooperatives should be reformed as suggested by President Joko Widodo (Jokowi). "If cooperatives' conditions remain as these are today, these institutions will not be able to develop the people's economy and improve their prosperity. AS a result poverty rate will remain high," the minister said in Purwokerto,  Banyumas District, Central Java, on Sunday (Dec 4).
         The minister was visiting the 'Bursa Kampus' unit of the 'Bina Usaha Mandiri Profesional' cooperative, Purwokerto. President Jokowi has ordered the minister to completely reform the cooperatives.
         In line with the president's directives to his ministry, he stressed the need to rehabilitation, re-orientation and development of cooperatives.  "We are working on formulating a 'prototype' of the development of cooperatives, showing how cooperatives can serve as an agency for food resilience. Already, Pak (Mr) Luwarso (who pioneered an agribusiness service center) has tried it in Sukabumi (West Java)," noted Puspayoga.
        Minister Puspayoga claimed he would set up 65 cooperative clusters across the country which will be active in the agricultural sector. Every cluster will cultivate 5,000 hectares of land, and the production thereof will reduce dependence on imports. 
    "We are working out a prototype as a pilot project in five places. One of these has been running in Sukabumi, West Java. We went to Demak yesterday. Today, we are in Purwokerto (Banyumas) and next week, we will be in Lumajang and Lampung (Sumatra)," he informed.
         The pilot (prototype) project in Sukabumi is spread over 1,000 hectares and is being cultivated by 2,400 farmer members. The production and operational costs are being contributed by the Partnership and Environment Development Program (PKBL).
         Even the farmer members receive a monthly salary of Rp2,200,000. "We buy their harvest at a price higher than what the state logistics board Bulog offers," Puspayoga disclosed. The minister was optimistic that if these 65 cooperative clusters are realized, it will be possible to ensure food resilience.
         According to Luwarso, the five districts, where pilot projects are running, will cultivate 1,000 hectares of land each. "If the prototype is for 1,000 hectares, then the cluster will have 5,000 hectares. The 65 clusters have been selected through a ministerial regulation. There are 65 districts which have been assigned to produce two million tons of rice with the aim to end imports," Luwarso, who was also appointed as the consultant in the  agriculture-based cooperatives development, said.
        The farmers involved in the programs will be brought under an institution in the form of smallholders' corporate body (BUMR). The BUMR will serve as the center for several cooperatives to form a company. "God willing, it will shortly be launched by the president in Sukabumi," Luwarso commented.
        With this scheme and other cooperatives related programs, these institutions in Indonesia can actually develop like those abroad. The Deputy for Production and Promotion of the Ministry of Cooperatives, I Wayan Dipta, said in other countries, cooperatives are capable of developing into strong and large businesses. "We can also be like them. Many cooperatives are already active in the social sphere," Wayan reminded.
         Wayan, who was a speaker at a seminar on cooperatives' synergy and exploitation of economic potential to ensure the prosperity of village communities, said a number of cooperatives in various regions had been developed successfully.
        These cooperatives have set up factories in the palm oil sector which have a turnover of hundreds of billions of rupiah, according to Wayan.***3***(A014/INE) EDITED BY INE