The logistics industry has the opportunity to take part in the government's megaproject to develop more than 80,000 units of the Merah-Putih Village Cooperative (KDMP). This sector is one of the spearheads of the distribution of agricultural products and various basic necessities.
As an illustration, in his 2026 State Budget (APBN) Financial Note Speech before the People's Consultative Assembly (MPR), last week, President Prabowo Subianto reiterated his commitment to ensure the KDMP functions optimally.
"The establishment of Merah Putih Village and Village Cooperatives has started this year. By the end of 2025, each cooperative will have a warehouse, will have cold storage, will have outlets, and each cooperative will have two trucks to pick up and deliver its produce," Prabowo said on Friday (15/8/2025).
The addition of distribution facilities and capacity is well-reasoned. According to the President, these facilities support the government's mission to improve public nutrition and increase the consumption of animal protein - especially fish.
Tria Dianti
Not only that, the addition of KDMP distribution capacity as the motor of the village economy is also expected to accelerate the transportation of village products to reach the market.
On various occasions, both Minister of Cooperatives Budi Arie Setiadi and Deputy Minister of Cooperatives Ferry Juliantono said that the plan is for KDMP to become a distribution chain for production products to community needs such as agricultural products and medicines. Therefore, it is necessary to involve a strong logistics system to support the success of this program.
The President's commitment received a positive response from national logistics and supply chain businesses. Chairman of the Indonesian Logistics Forwarder Association (ALFI) Institute Yukki Nugrahawan Hanafi stated that the integration of the logistics sector can encourage economic equality, job creation, and the stretching of the national supply chain logistics sector.
"We see opportunities for collaboration in the national logistics sector to help realize this vision. However, we see that the government needs to consider four important factors so that this realization can run optimally," Yukki explained in a written statement received by SUAR, Friday (16/8/2025).
The four important factors referred to by Yukki include: KMP's organizational governance capacity in running optimal logistics and supply chains, availability of an efficient fleet, digitalization of logistics and supply chains, and ensuring the availability of logistics and supply chain human resources.
"In this context, supply chain logistics businesses are ready to work together to provide assistance, training, and business collaboration to make this vision a success," Yukki concluded.
Watch out for loopholes to fail
However, cooperative researcher and Chairman of the Association of Strategic Socio-Economic Cadres (AKSES), Suroto, warned of the KDMP's failure in the implementation of a big plan like President Prabowo's idea. The crucial point lies in the mechanism of transferring bad credit risks that directly cut the Village Fund and guaranteeing commodities sold by KDMP to Himbara banks (government-owned banks).
"If the market does not absorb the goods, losses will not be incurred by banks or suppliers. Village funds that should be used for development and community empowerment will be cut to cover the loss. The village is only an extension of the execution arm, without the power to determine suppliers, types of goods, or business models," Suroto wrote in a written statement received by SUAR, Friday (15/08).
At first glance, this mechanism makes villages vulnerable to being trapped in a prolonged debt cycle and losing the direction of autonomous development. On the other hand, this mechanism is actually a trigger for villages to be able to strategize so that KDMP finances are maintained. In addition, productivity grows optimally and village products can compete competitively.
Partnerships must be by design
To ensure the optimal functioning of the KDMP, logistics entrepreneurs emphasized that the implementation of the plan should not only pay attention to the readiness of the macroscopic plan, but also the technical aspects in the field.
Chairman of the Indonesian Logistics Association, Mahendra Rianto, underlined the challenge of details, which are often overlooked in overly large and massive plans. In fact, aspects in the field determine the success or failure of the implementation of government plans. Therefore, the implementation of the logistics plan should not be rushed.
He took the example of the government's plan to set up cold storage in each KDMP unit, but did not explain the implementation of the cold supply chain flow as a framework.
Mahendra explained that each commodity has a different cold supply chain and treatment. For example, fish from Sulawesi and Maluku. "Can our government convince markets in Singapore, Malaysia, Hong Kong, China, or Australia to buy our fish? The lifespan of fish as perishable food is not long. Bacteria levels must be closely monitored, especially in countries that apply high standards. Have we done that yet?" he said.
The biggest challenge of the cold supply chain, according to Mahendra, is the degree of difference in the quality of freshness of goods at harvest and those received by buyers in the market. Transportation needs, therefore, must be part of a comprehensive integrated plan.
"Cold storage does not solve the problem. What solves the problem is the movement of the goods to the market for sale. If it is only stored in cold storage and not sold, the goods will eventually be damaged," said Mahendra when contacted by SUAR, (16/08).
"Cold storage does not solve the problem. What solves the problem is the movement of the goods to the market for sale," Mahendra said.
Mahendra reminded that steps to procure cold storage had also been taken several years ago, with far-from-fire results. "Now, the cold storage is hanging out, there is no content. Do not repeat similar mistakes, because of unclear information, pouring funds into things that have been wrong from the start," he said.
There are effective strategies that the government can do to prevent repeated mistakes in implementing the distribution capacity improvement plan. Namely, cooperating with private partnerships to provide training and upgrading of human resources and the establishment of quality control that makes KDMP products compete in the market.
"Try, the supermarket chains that get operating licenses teach the cooperatives and take goods from them. Don't turn it around. The government can say, 'Please take these goods from the villagers. Tell them how to meet the quality standards,' so they [supermarket chains] are the ones guiding," Mahendra said.
In addition, KDMP can only succeed if the government, farmers/fishermen, and the market have a mutual understanding. "The fact is, our farmers need money every day. The government must understand that, if they want to fix the supply chain. Don't let the farmers end up with debts after harvest, while the middlemen take the profits. The government must be honest and open to this problem," he said.
Authors: Benedictus Krisna Yogatama and Christian Wibisana
