Agricultural Cooperatives in Indonesia

(Koperasi Pertanian di Indonesia)

The history of Indonesia’s farm cooperative/agricultura cooperatives -the Village Unit Cooperative or Koperasi Unit Desa (KUD)- is
inseparable from the record of Indonesia’s food self-sufficiency program. The KUD was given responsibilities in farm credit scheme,
agriculture input and incentives distribution, marketing of farm commodities, and other economic activities. The government
particularly guaranteed both marketing and market price to encourage the growth of agricultural cooperatives. Perum BULOG (The
State Owned Logistics Agency), with the government’s mandate stabilized the price of the nation’s staple food supply, particularly
rice, corn, soybean, poultry and meat, and other staple required by consumers. The role of BULOG was particularly significant
during the harvest period when BULOG bought and stored farm commodities from farmers through the KUD throughout the
country. Facing the 21st century, farm cooperative movement in Indonesia encounters great challenge due to the rapid change in
global economy and open market competition. Many agricultural cooperatives are struggling to exist, some simply disappeared, but
some shown their resistance and keep growing amid such changes.

Sejarah koperasi pertanian Indonesia -Koperasi Unit Desa (KUD)- tidak dapat dipisahkan dari catatan program swasembada
pangan Indonesia. KUD diberi tanggung jawab dalam skema kredit pertanian, input pertanian dan distribusi insentif, pemasaran
komoditas pertanian, dan kegiatan ekonomi lainnya. Pemerintah secara khusus menjamin harga pasar dan pemasaran untuk
mendorong pertumbuhan koperasi pertanian. Perum BULOG dengan mandat dari pemerintah menstabilkan harga pasokan
makanan pokok negara, terutama beras, jagung, kedelai, unggas dan daging, dan kebutuhan pokok lainnya yang dibutuhkan oleh
konsumen. Peran BULOG sangat penting selama periode panen ketika BULOG membeli dan menyimpan komoditas pertanian dari
petani melalui KUD di seluruh negeri. Menghadapi abad ke-21, gerakan koperasi pertanian di Indonesia menghadapi tantangan
besar karena perubahan yang sangat cepat dalam ekonomi global dan persaingan pasar terbuka. Banyak Koperasi Pertanian
berjuang untuk tetap eksis. Beberapa menghilang begitu saja, tetapi beberapa menunjukkan semangat untuk terus tumbuh dan
berkembang di tengah perubahan tersebut.
Agricultural Cooperatives by commodity
(Koperasi Pertanian berdasarkan komoditinya)

According to The Indonesia’s Law of Cooperatives (UU Nomor 25 Tahun 1992), the types of cooperatives in Indonesia are
generally grouped into: Consumer Cooperatives, Producer’s Cooperatives, and Credit Cooperatives.

Agricultural Cooperatives are usually included in the Producer's Cooperative group because it is produce agricultural products
based on their commodities, among others:
 Farmers’ Cooperatives (rice, corn, soybeans, etc).
 Horticultural Cooperatives (vegetables, fruits, etc).
 Plantation Cooperative (oil palm, coffee, coconut, etc).
 Animal Husbandry Cooperatives (cattle, chickens, goats, etc).
 Fisheries Cooperatives (marine fisheries, inland fisheries, etc).
Superior case examples of Agricultural Cooperatives on agricultural, livestock and dairy
products
(Contoh unggul Koperasi Pertanian pada produk pertanian, peternakan dan susu)

KSU Citra Kinaraya, Demak (rice products)

KSU Citra Kinaraya is a multipurpose cooperative whose main sector is in agriculture. It is located in Mlatiharjo Village, Gajah
Subdistrict, Demak Regency, Central Java Province, established in 2012. From the start, it was focused on producing custom rice
obtained from the latest rice breeding. Most rice seeds come from the results of breeding themselves by breeders Mr. Hery
Sugiartono.

Mr. Hery once served as the Head of Mlatiharjo Village. In 2010, he delivered his ideas at the Perippi National Congress
(Indonesian Rice Breeder Association) under the title "Initiating Special Rice, Opening Opportunities with Rice Market
Segmentation" with the approach to the need for market-oriented rice breeding, placing farmers as profit centers, and agricultural
development in the future should be more oriented to the processing and marketing of agricultural products because this is where
added value and competitiveness are sourced.

KSU Citra Kinaraya is supported by modern rice factory infrastructure in the form of rice milling units with a capacity of 2 tons/hour
each and sifter, color sorter, and vacuum packaging to package their rice products. KSU Citra kinaraya produces premium quality
rice. Grain supply comes from foster partner farmers spread in various regions in Demak, Sragen, Kudus, Purwodadi, Kendal, etc
with the planting season arranged so that it can be harvested alternately to allow grain supply to be available throughout the year.

With superior character in rice quality, both in taste, nutrient content, aroma, and appearance (packed in 1 Kg vacuumed brick),
KSU Citra Kinaraya rice production has several characters namely japonica rice (Japan) and functional rice (red and black), among
others:
 Jasmine Rice: Aromatic fragrance. Milky white color. Suitable for Javanese, Sundanese, Japanese and Korean cuisine.
 Black Rice: Very good for people with gout, diabetes, heart disease, and can inhibit cancer.
 Red Rice: Good for diets. Suitable for diabetics. Low calorie levels. Taste better and fluffier.
 Brown Rice: 5 times more carbohydrates, vitamins and minerals than regular rice. Taste sweeter and fluffier.
 Genki Rice: Taste more delicious and fluffier. Rich in fiber and vitamins.

Jasmine Rice Red Rice Black Rice Sultan Rice

KSU Citra Kinaraya markets its premium rice products through social media, online marketplaces, resellers, exports, etc.
Koperasi Peternak Sapi Bandung Utara “KPSBU”, Lembang (dairy products)
West Java is the biggest milk producing region in Indonesia which contributes almost 34% of the total national milk production. One
of the dairy producing cooperatives in West Java is the KPSBU located in Lembang.

KPSBU started its business in 1971 and until now they have always tried to do the best for their members. Their vision is to
become the leading milk cooperative in Indonesia. KPSBU have 2 missions: (1). Increasing the welfare of their members through
excellent service in the dairy industry with committed management, (2). Increasing the institutional capacity of cooperatives through
education, human resource empowerment, and strategic partnerships.

KPSBU has several business units and one of them is a dairy unit. With 310 workers in the dairy unit, they produce 150 tons of
fresh milk every day. They have US$ 7,4 million assets and US$ 35.8 million turnover in the dairy unit. To achieve its vision, they
built a partnership with Frisian Flag, the Indonesian government and the Dutch government to build a "Milk Village" in Lembang. In
the "Dairy Village", they have a SKT (Smallest Work Unit) whose members consist of extension workers, milk testers, and
recorders so that they can produce fresh milk with national standards. They also have an animal feed processing machine to
maintain feed fulfillment for 21,361 of their cows.

Besides fresh milk, KPSBU also produces yogurht and other processed products. They sell their products in good packaging and
sell their products to PT. Frisian Flag and PT. Danone Dairy Indonesia.

Some of dairy products of KPSBU, Lembang:

Koperasi Produksi Ternak Maju Sejahtera “KPTMS”, Lampung (cattle products)
Animal Husbandry Production Cooperative Maju Sejahtera “KPTMS” which was established in 2014. The cooperative focuses on
cattle farming with a population of 2886 cattle. Until now the cooperative has 83 members. KPTMS Lampung also has a processed
product which is shredded beef with the trademark "Kriuk".

KTPMS Lampung succeeded in conducting calf harvest which was the result of a partnership between KPTMS and Indonesia
Australia Commercial Cattle Breeding (IACCB) where IACCB was first informed of KPTMS at the FGD for Beef Cattle Business
Development in West Nusa Tenggara which was carried out by the Assistant Deputy of Fisheries and Animal Husbandry in 2016.
After receiving the information, the KPTMS submitted a proposal and finally agreed to manage 105 BX cattle worth 1 billion rupiah.
This program has a significant impact on farmers because it turns out that keeping BX cattle is not as difficult as one might imagine,
within two years the KPTMS showed good results with performance so that in accordance with the contents of the parent and calf
partnership agreement, it fully belongs to KPTMS. With this collaboration the cooperative turnover increased to 1 billion rupiah and
until 2018 the KPTMS had a US$ 120 thousand and a turnover of US$ 71 thousand.

Some of activities of KPTMS, Lampung:

The role of agricultural cooperatives on contract farming
(Peran Koperasi Pertanian pada Sistem Pertanian Kontrak)

Agricultural Cooperatives play an important role in supporting small agricultural farmers. The key roles of cooperatives are to
improve access to markets, increase in bargaining position of farmers, adopt improved technologies, increasing social care, the
welfare of its members, obtaining a win-win situation that enables them to control and maintain farmers' products, while also
generating additional income. One way to do this is by applying the contract farming system to the target farmers (who are also
members of the cooperative).

The contract farming system is a partnership mechanism that strengthens the bargaining position of farmers, ranchers and
fishermen by linking them directly with business entities (in this case the Agricultural Cooperative) which are relatively stronger
economically. Through this system, farmers, ranchers and small fishermen can switch from traditional businesses / sub-systems to
high-value and export-oriented production. This not only has the potential to increase the income of farmers, ranchers and small
fishermen who enter into contractual agreements (become partners) but also has multiplier effects for the rural economy and the
economy on a broader scale.

Koperasi Pertanian memiliki peran penting dalam mendukung petani kecil. Peran kunci koperasi tersebut, yaitu untuk
meningkatkan akses pasar, meningkatkan posisi tawar petani, meningkatkan kemampuan mengadopsi teknologi, meningkatkan
kepedulian sosial, kesejahteraan para anggotanya, mendapatkan situasi win–win solution yang memungkinkan untuk
mengendalikan dan mempertahankan produk para petani, juga sambil menghasilkan pendapatan tambahan. Salah satu caranya
adalah dengan menerapkan sistem contract farming kepada petani binaannya (yang juga anggota koperasi).

Sistem contract farming merupakan satu mekanisme kemitraan yang memperkuat posisi tawar-menawar petani, peternak dan
nelayan dengan cara mengkaitkannya secara langsung dengan badan usaha (dalam hal ini Koperasi Pertanian) yang secara
ekonomi relatif lebih kuat. Melalui sistem ini, petani, peternak dan nelayan kecil dapat beralih dari usaha tradisional/sub-sistem ke
produksi yang bernilai tinggi dan berorientasi ekspor. Hal ini tidak hanya berpotensi meningkatkan penghasilan petani, peternak
dan nelayan kecil yang ikut dalam perikatan kontrak (menjadi mitra) tetapi juga mempunyai efek berlipat ganda (multiplier effects)
bagi perekonomian di pedesaan maupun perekonomian dalam skala yang lebih luas.
Implementing supports for farmers
(Pelaksanaan dukungan bagi petani)

In accordance with the direction of President Jokowi, farmers and fishermen need to get out of on-farm activities to go to off-farm by
providing added value to their farming and fishing activities through processing of agricultural and fishery products as well as
developing their businesses.

To enter off-farm, farmers need funding schemes and also get assistance. People's Business Credit (KUR) is designed with special
schemes per cluster so that it can be in accordance with the needs of the agricultural and fishery cluster production grace periods.
Financing schemes must be followed by assistance, both in financial management, making good packaging, good packaging, good
branding, and also good marketing

The President wants his staff to start encouraging Micro, Small and Medium Enterprises (MSMEs), farmers, and fishermen who
have been engaged in small-scale economies to join and collaborate in groups (cooperatives) or large corporations. Thus, they will
have a large economic scale value as well.

By corporating, it is hoped that farmers and fishermen can be more effective in obtaining raw materials, accessing working capital
and investment, and making efforts to market their products so they can enter national and global supply chains.

Sesuai dengan arahan Presiden Jokowi, petani dan nelayan perlu keluar dari aktivitas on-farm menuju ke off-farm dengan
memberikan nilai tambah aktivitas usaha tani dan perikanannya melalui pengolahan produk pertanian dan perikanan maupun
pengembangan usahanya.

Untuk masuk ke off-farm, para petani perlu skema pembiayaan dan juga mendapatkan pendampingan. KUR didesain dengan
skema-skema khusus per klaster sehingga bisa sesuai dengan kebutuhan grace period produksi klaster pertanian maupun
perikanan. Skema pembiayaan harus diikuti dengan pendampingan-pendampingan, baik dalam pengelolaan keuangan, membuat
kemasan yang baik, packaging yang baik, branding yang baik, dan juga marketing yang baik.
Presiden ingin agar jajarannya mulai mendorong Usaha Mikro, Kecil, dan Menengah (UMKM), petani, hingga nelayan yang selama
ini bergerak dalam skala ekonomi kecil untuk bergabung dan berkolaborasi dalam kelompok (koperasi) atau korporasi besar.
Dengan demikian, mereka akan memiliki nilai skala ekonomi yang besar pula.

Dengan berkorporasi, diharapkan petani dan nelayan bisa lebih efektif dalam mendapatkan bahan baku, mengakses modal kerja
dan investasi, dan melakukan upaya untuk memasarkan produk mereka agar bisa masuk ke supply chain nasional maupun global.
Strategic plan for 2020-2024
(Rencana aksi untuk tahun 2020-2024)
Supporting credit access etc for cooperative members
(Dukungan kemudahan akses kredit dll untuk anggota koperasi)

The Indonesia government has facilitated access to finance for cooperatives and MSMEs through the People's Business Credit
(KUR) scheme with a ceiling of 2020 in the amount of Rp 190 trillion (US $ 13.5 million) with an interest of only 6 percent. The KUR
scheme is channeled by banking institutions to the cooperatives, and cooperatives to their members who apply for loans.

The Ministry of Cooperatives and SMEs also has a work unit called The Revolving Fund Management Agency known as LPDB-
KUMKM which is tasked with carrying out revolving fund management for Cooperatives/MSME financing to develop the local
economy.

Also, in order to grow new entrepreneurs and support job creation and poverty reduction, the Ministry of Cooperatives and SMEs
provides assistance in the form of grants to 2,500 Micro-scale Startup Entrepreneurs (WP) up to 12 million rupiah for each WP.

Pemerintah sudah mempermudah akses pembiayaan bagi Koperasi dan UMKM melalui skema KUR yang plafon anggarannya di
tahun 2020 sebesar Rp 190 triliun (US$ 13,5 million) dengan bunga hanya 6 persen. Skema KUR ini disalurkan oleh lembaga
perbankan kepada Koperasinya, dan Koperasi kepada anggotanya yang mengajukan pinjaman.

Kementerian Koperasi dan UKM juga memiliki satuan kerja yang bernama Lembaga Pengelola Dana Bergulir Koperasi, Usaha
Mikro, Kecil dan Menengah (LPDB-KUMKM) yang bertugas melaksanakan pengelolaan dana bergulir untuk pembiayaan
Koperasi/UMKM guna mengembangkan ekonomi lokal.

Dalam rangka menumbuhkan wirausaha pemula dan mendukung penciptaan lapangan pekerjaan serta penanggulangan
kemiskinan, Kementerian Koperasi dan UKM menyelenggarakan bantuan berupa hibah kepada 2.500 wirausaha pemula skala
mikro hingga Rp. 12.000.000 untuk masing-masing WP.
Mobile Banking system and credit business for rural farmers
(Sistem Mobile Banking dan pinjaman kredit untuk petani pedesaan)

Farmers who have productive businesses but are unable to access KUR are advised to take part in Micro Business financing (UMi)
which is a collateral-free, easy, and fast service facilitated by the Ministry of Finance in collaboration with existing financial
institutions, with the principle of improving, enhanching, and empowering farmers.

For the distribution of these micro business financing funds, the Ministry of Finance established the Public Investment Development
Public Service Agency (BLU-PIP). The BLU is working with three UMi financing distribution companies, namely PT. PNM (which
has the PNM Digi mobile application), PT. Bahana Artha Ventura, and PT. Pegadaian (which has the Digital Pegadaian mobile
app). The 3 partners returned the funds channeled to the Ministry of Finance with a maximum interest of 4 percent.

There are three ways that farmers can do to get the UMI financing without collateral from BLU-PIP. First, individually, farmers can
become members of PT. PNM. Farmers who plant rice, corn, and soybeans are considered productive businesses. Second,
farmers who are already in groups such as Joining Farmer Groups (Gapoktan) can access micro business financing through PT.
Pegadaian. Third, farmers who are already in groups in the form of Agricultural Cooperatives can access micro business financing
without collateral through PT. Bahana Artha Ventura. To finance agricultural BLU, in 2020 the government prepared a budget of
250 billion rupiah.

Petani yang memiliki usaha produktif tapi tidak mampu mengakses KUR disarankan untuk ikut serta dalam pembiayaan Usaha
Mikro (UMi) yang merupakan layanan tanpa agunan, mudah, dan cepat ini difasilitasi Kementerian Keuangan bekerja sama
dengan lembaga pembiayaan yang sudah ada, dengan prinsip meningkatkan (enhanching) dan memperkuat (empowering).

Untuk penyaluran dana pembiayaan usaha mikro tersebut, Kementerian Keuangan membentuk Badan Layanan Umum
Pengembangan Investasi Pemerintah (BLU - PIP). BLU tersebut bekerja sama dengan tiga perusahaan penyalur pembiayaan UMi,
yakni PT. PNM (yang memiliki aplikasi mobile PNM Digi), PT. Bahana Artha Ventura dan PT. Pegadaian (yang memiliki aplikasi
mobile Pegadaian Digital). Ke-3 mitra tersebut mengembalikan dana yang disalurkan kepada Kementerian Keuangan dengan
bunga maksimum 4 persen.
Ada tiga cara yang dapat dilakukan petani untuk mendapatkan pembiayaan UMI tanpa agunan dari BLU – PIP. Pertama, secara
individu, para petani bisa menjadi anggota PT. PNM. Petani yang menanam padi, jagung, dan kedelai adalah termasuk usaha
produktif. Kedua, petani yang sudah berkelompok seperti bergabung dalam kelompok tani (poktan) dapat mengakses pembiayaan
usaha mikro melalui PT. Pegadaian. Ketiga, petani yang sudah berkelompok dalam bentuk Koperasi Pertanian bisa mengakses
pembiayaan usaha mikro tanpa agunan melalui PT. Bahana Artha Ventura. Untuk pembiayaan BLU pertanian, di tahun 2020
pemerintah menyediaan anggaran 250 miliar rupiah.

Arigatō
Thank You
Terima Kasih