The Red and White Village/Sub-district Cooperative (KDKMP) program, touted as a driver of the people's economy, is now facing a harsh reality. In various regions, these cooperative outlets are recording extremely low daily turnover, with some units reporting no transactions at all. This phenomenon raises major questions regarding the urgency and effectiveness of the business model implemented by the central government.
Research results from the National Research and Innovation Agency (BRIN) show a worrying correlation between village poverty levels and cooperative performance. The lower the economic status of a region, the more sluggish KDKMP activities are there. This is exacerbated by rural demographic conditions, which have seen a loss of much of the productive-age population, meaning the absence of local driving actors makes the cooperative an alien entity irrelevant to residents' needs.
Structurally, KDKMP is squeezed between two deeply entrenched market forces. Upstream, farmers remain heavily dependent on middleman networks that supply planting capital and act as crop buyers. Meanwhile, downstream, the aggressive expansion of franchised minimarkets offering convenience and price efficiency has eroded potential customers. The strategy executed by the cooperative is deemed to have failed to breach this competitive wall due to a lack of socio-economic flexibility.
Sharp criticism from academics and civil society organizations highlights the top-down or centralized approach in designing this program. Strategic decision-making—ranging from the appointment of managers to the physical design of buildings—is entirely controlled from the center without involving the aspirations of villagers as economic subjects. This condition is considered to stifle the spirit of economic democracy and the principle of family togetherness, which should be the core spirit of cooperatives according to the constitution.
In addition to frequent managerial issues and labor conflicts, controversy over the use of village funds has also surfaced. With an allocation reaching IDR 34.57 trillion, the program is accused of draining the independent fiscal space of villages that should be used for basic infrastructure development. Without adequate data transparency and a shift toward a more participatory strategy, this massive investment in KDKMP risks becoming a prolonged fiscal burden that fails to add value to the rural economy.
