The establishment of Merah Putih Village Cooperatives is one of the flagship programs of the Prabowo-Gibran administration, alongside the Free Nutritious Meals (MBG) program. However, the cooperative initiative has yet to operate optimally, as construction of buildings is still ongoing and incomplete, and several villages continue to face challenges with permits and funding. The development of these cooperatives accounts for more than half of the village fund allocations, which will be managed by Agrinas over the next two years.
The nationwide establishment of Merah Putih Village Cooperatives has drawn public attention, including from academics, due to concerns over weak regulatory reinforcement, top-down policymaking, governance issues, potential local power relations, and its impact on community participation in village economic systems.
Professor Zainal Arifin Mochtar from the Faculty of Law, Universitas Gadjah Mada (FH UGM), commonly known as Uceng, stated that the concept of cooperatives is fundamentally built upon economic democracy that grows organically from society. According to him, cooperatives are collective enterprises managed jointly by their members, from decision-making processes to profit-sharing.
“If we imagine what a cooperative is, the decision-making process is conducted democratically and collectively. The business is run together by its members, and the profits are also enjoyed collectively,” he explained during a public discussion titled “Menggugat Koperasi Desa Merah Putih Sebagai Ancaman Demokrasi Ekonomi” (Challenging the Merah Putih Village Cooperative as a Threat to Economic Democracy) on Wednesday (May. 20) at the fourth-floor auditorium of the UGM Faculty of Social and Political Sciences (Fisipol UGM).
The public discussion, organized by the Social Research Centre of Fisipol UGM together with the Caksana Institute and IDEA Foundation, served as a forum to examine the dynamics of village cooperatives from the perspective of economic democracy.
Professor Zainal highlighted that the cooperative concept within economic democracy differs significantly from the Red and White Village Cooperative scheme, which was established through top-down political directives. He stated that public participation in formulating the policy remains limited, even though sound policymaking should be built through equal dialogue between the government and society.
“From what I see, the Red and White Village Cooperative was formed through political instruction, not from the needs of the community at the grassroots level. Even the public discussion surrounding it, in my opinion, has not been adequate,” he said.
Furthermore, Professor Zainal warned that excessive state involvement in regulating village economic systems could lead to a new form of centralism. He explained that such conditions could make the state overly dominant in determining the direction of village economies.
“The state determines the design, the structure, and even the business direction. It is rather dangerous when the state takes over too many aspects of the people’s economy,” he stressed.
UGM sociologist Dr. Andreas Budi Widyanta reflected on the differences between the cooperative concept introduced by Mohammad Hatta and the Merah Putih Village Cooperative (KDMP) scheme. As Indonesia’s Father of Cooperatives, Hatta viewed cooperatives as business entities aimed at generating profit while also embodying moral, social, and political movements to strengthen smaller communities against the dominance of large capital owners.
Dr. Widyanta stated that the cooperative concept differs from the Red and White Village Cooperative model. According to him, the Red and White Village Cooperative concept is more top-down or centrally controlled.
“Cooperatives should fundamentally arise from the shared needs of their members and be managed democratically based on mutual cooperation principles. Therefore, cooperatives should grow from the bottom up. Meanwhile, the implementation of KDMP is instructed from above through government policy,” he said.
In addition, Dr. Widyanta also highlighted the impact of the Red and White Village Cooperative policy on villages. He argued that the cooperative scheme has the potential to reduce village autonomy because many village programs must be adjusted to accommodate the cooperative establishment agenda.
“Villages should serve as autonomous political subjects. When policies are decided centrally without sufficient deliberation, what happens is the reduction of village authority,” he remarked.
He added that cooperatives should ideally be built through collective community participation rather than command-based approaches. According to him, state-controlled cooperative practices risk drifting from the spirit of economic democracy.
“If cooperatives are built through command and coercion, then the spirit of mutual cooperation and collective awareness within society will disappear. In fact, cooperatives were created to strengthen social solidarity within communities,” he explained.
Chair of Carik Kulon Progo Ngayogyakarta Hadiningrat (Cakraningrat), Wiwit Triharjo, explained that the Village Law is one of the important foundations for strengthening community independence and unity. According to him, villages have the right to regulate their own economies. He stated that village funds have also been reduced, resulting in budget-efficiency measures that affect community social institutions.
“From the village perspective, villages are actually being rushed to immediately establish these cooperatives. I believe villages have the right to manage their own economies, and indeed, the Red and White Village Cooperative appears to be somewhat forced,” he said.
Author: Diyana Khairunnisa
Editor: Gusti Grehenson
Post-editor: Rajendra Arya
Photo: Aldi Firmansyah