That there is a link between the Netherlands and Indonesia concerning cooperatives can be traced back by the first cooperative law which was introduced in Indonesia in 1915 and based on the Netherlands model. But in 1927 a revised law, largely based on British-Indian model was issued. The first Co-operative Department was established in 1935 and this became part of the Office for Co-operatives and Home Trade in 1939. At this time, co-operatives were primarily for saving and credit and were more or less primarily based on Java. In 1958 a new co-operative law was issued, and in the period 1960-1966 the number of co-operatives expanded rapidly, however they were highly politicized. The change of Government in 1966 initially brought a strong reaction in favour of co-operatives. The co-operative law of 1967, known as the “Law on the Basic Principles of Co-operatives”, made provision for independency. Co-operatives, apart from those in agriculture, were registered and audited by Government, but not actively promoted. The government directed co-operatives (KUD: Koperasi Unit Desa or village unit cooperatives) were viewed as basic unions for agricultural development and were inseparable from the Indonesian food self-sufficiency program. The village unit cooperative 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 farm cooperatives. However, based on the results and existence, the efforts to make the KUD’s a viable instrument for initiating and implementing rural development failed widely. According to experts some of the reasons for this failure, besides corruption, lack of management capacity and the like, was the fact that the incorporation of KUD is against cooperative principles. KUD was not based on joint economic need of the members, but it was incorporated by the government as their distribution vehicle to support green revolution program. KUD was not based on the self-sufficiency of its members. As well the government granted all the equity capital and members contributed a very small amount or paid even nothing.
The number of other cooperatives engaged in sectors other than agriculture grew substantially near the millennium. This growth was assumed to the freedom they enjoyed that was far greater than that of farm cooperatives. Also the growth was not fully depended on the government programs.
In 1992 the cooperative law number 25 was enacted. And in 2012, a new law was been introduced to replace the 1992 law, and should be implemented by the cooperatives by 2015. Though some cooperatives disagreed with the changes and went to Constitutional Court. As a result this new legislation was revoked. It is to be expected that a new regulation will be introduced during the coming years.
Sources of information:
http://ice_online.tripod.com/Wacana6.html
http://www.ilo.org/jakarta/info/public/pr/WCMS_183301/lang--en/index.htm
‘Agricultural cooperative in Indonesia’, Dr Kedi Suradisatra, 2006
http://web.stanford.edu/group/FRI/indonesia/documents/ricebook/Output/chap2.html
Agnes Janszen, @AgnesJanszen
