"It is important for the agriculture sector to cut and shorten the supply chain, which used to have eight stages but now will be reduced to three," he said in Jakarta on Friday.
Amran explained that lengthy supply chains cause price instability in agricultural products. The more intermediaries involved, the higher the selling price, which eventually burdens consumers.
Under the government's Red-and-White Village Cooperatives program, the supply chain will be simplified to three stages: farmers, cooperatives, and consumers.
"This means farmers become prosperous and consumers are happy. Farmer welfare improves, while consumers' purchasing power increases as they can buy more because the chain is shortened to just three levels," he said.
To support the cooperatives, the government will supply fertilizers, seeds, and farming equipment to farmers.
"The government will also distribute agricultural production facilities and serve as an off-taker for rice, sugar, and other products," Amran added.
On Friday, the National Armed Forces (TNI) and state-owned company PT Agrinas Pangan Nusantara signed a cooperation agreement to build the cooperatives' facilities.
The partnership supports the government's plan to establish 80,000 village cooperatives across the country.
President Prabowo Subianto, during the program's launch on July 21, said he envisions the cooperatives as instruments to boost the national economy by raising people’s living standards.
He emphasized that operating in large numbers would make the cooperatives effective in accelerating Indonesia's economic growth.
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Translator: Walda, Kenzu
Editor: Anton Santoso
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