Village cooperatives-BUMDes collaboration key for rural progress

Jakarta (ANTARA) - The government envisions Red and White Village Cooperatives working in harmony with village-owned enterprises (BUMDes) to improve the welfare of rural communities, Deputy Minister of Villages and Disadvantaged Regions Development Ahmad Riza Patria stated.

Patria emphasized that the emergence of new cooperatives is not meant to replace or overshadow existing BUMDes but rather to complement them. He urged both entities to collaborate rather than compete, so they can fully capitalize on their host villages' natural resources.

"Both BUMDes and cooperatives are needed. There is no need to shut down BUMDes, as both can work hand in hand to support their communities. We want village cooperatives to contribute to welfare enhancement efforts," he noted in a statement cited here on Thursday.

During a dialogue on preparations for the Red and White Village Cooperatives program in Sofifi City, North Maluku, on Wednesday (June 4), Patria explained that the planned cooperatives could help expand market access for rural commodities, potentially reaching other regions and also international markets.

Earlier, on Monday (June 2), the deputy minister urged future cooperative operators to ensure the upcoming business entities become key drivers of rural welfare.

He stressed that to effectively improve village prosperity, cooperatives must be run with a profit-oriented approach.

“A cooperative must generate profit to be sustainable. To gain profit, income must exceed expenditure,” he stated during a similar event in Jayapura City, Papua.

Patria further explained that financially sound cooperatives would motivate more members to save rather than borrow, resulting in long-term, sustainable impacts on both the cooperatives and their host villages.

“If the cooperative is profitable, more members will deposit funds than borrow. This will reverse the current trend where people prefer borrowing over saving,” he noted.

The deputy minister expressed confidence that with professional management, Red and White Village Cooperatives would become key pillars of economic growth and development in rural communities.