The Ministry of Cooperatives and SMEs of Indonesia strives for food resilience through cooperatives, as Arif Rahman Hakim, the Secretary of the Ministry of Cooperatives and SMEs, said in a public lecture on Friday (November 24) at the UGM Faculty of Agriculture.
The public lecture, titled “Policies of the Ministry of Cooperatives and SMEs in Supporting Food Resilience and Independence in Indonesia,” also marked the beginning of the collaboration between UGM and the Ministry of Cooperatives and SMEs.
“I think the ministry’s policies are already supportive and comprehensive. We will make cooperatives the backbone of the economy, which we must encourage together,” said the Rector of UGM, Professor Ova Emilia, MD.
“If we look at the data, there are 127,124 cooperative units. 89% are at the regency level, 6.35% are at the provincial level, and 4.06% are at the national level,” the secretary said.
“Most of these 90% cooperatives are still in the micro business scale, and their turnover is below two billion. So, the productivity is still low, which is a challenge for all of us.”
Since 2018, the number of cooperative units has drastically decreased. After the pandemic, the number of cooperative units has slowly increased but has not surpassed the number in 2016, and the interest in cooperatives is declining.
Secretary Hakim explained that the government has allocated 40% of its budget to purchase MSME products. Therefore, when starting a business, MSME actors do not need to worry because the government must buy MSME products.
He regretted the condition of the Indonesian market, which is not dominated by domestic products. This issue needs to be addressed immediately to allow MSMEs to become the main contributors to the national economy in 2024.
“Our data states that 51% of MSMEs are still constrained by financing. 34.7% are constrained by marketing access. And 8.5% are constrained by raw material access. Facing this profile, the government has implemented a series of policies. One of them is increasing the contribution of productive cooperatives and SMEs,” said Hakim.
The key to building a resilient food system is to involve the community, especially young people. Currently, young people’s interest in building businesses or getting involved in cooperatives is low. Therefore, there needs to be something new that can attract young people.
The government has set a target of 30 million MSME actors to go digital by 2024. This target is not easy to implement on a micro-business scale, especially for businesses with low income and without digital technology. According to Hakim, Go Digital is one way to attract young people to the MSMEs.
“We have a goal to create high-quality and modern cooperatives. So, starting from 2020 to 2024, it’s not a grandiose plan. We want to make at least one regency have an ideal cooperative or one that can be used as an example,” he added.
“So, it can encourage young people to choose a business entity. If our cooperatives manage our natural resources, it will support the community’s welfare.”