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Strategy Enhancement of the Agribusiness Sector of a Village Unit Cooperative in Pasuruan, East Java: An Indonesian Case.
Field Study Abstract:
The results of the study revealed that KMI Setia Kawan as evaluated by its management, members and collaborators was a business-oriented institution coupled with the social/welfare responsibility. The “missionary zeal” internalized by the management staff and members contributed to teamwork in carrying out their mission. The cooperative attained benefits higher than an average KUD. It was recognized as one of the ideal KUDs in Indonesia. Factors that contributed to the success of KUD were (a) entrepreneurship and innovative attitude of the management staff; (b) support by respected leaders in the cooperative movements; (c) training of farmers, staff and workers; (d) innovative programs to improve milk quality; (e) hiring of skilled persons who take care of the technical aspect of their business; and (f) strict application of careful quality control system. However, nothing in its operations was permanent and flawless. It needs to be dynamic and responsive in meeting the members’ expectations in the face of stiff competition. Some improvement in the procedures of the bureaucracy, government policies, human resource development, and operation are to be undertaken.
To attain its objective and to overcome the cooperative development problems, two major strategies have been identified by Ropke (1992)*: (a) increasing human resource capability on entrepreneurship and management, and (b) promoting incentives and pressure to use resources more efficiently. In facilitating KMI Setia Kawan as a business-oriented institution and as a coordinator of KUDs in the surrounding areas, the core business of KMI should be dairy cattle production. The business has specific characteristics of matching the potential production, demand of raw materials, and other resources and development of KMI’s activities. Both core business facilities (feed mill unit, credit unit, and rearing unit) and supporting business (saprodi unit, store unit and general equipment unit) should be further developed to strengthen the continuity of core business unit. Several actions were suggested such as improving human resource (management staff) capability in entrepreneurship, cooperative management, and participation to promote efficiency. It should also create incentives/schemes for skilled cooperative managers. In addition, it should maintain and promote vertical and horizontal cooperative relationship for better access of information and support.
With a specific mission of KMI Setia Kawan, limited entrepreneurial capability, the enhancement of cooperative-enterprise requires strong assistance from private business. The government as well as non-government institutions particularly, should work together in formulating the feasibility study and provide business opportunities.
*Ropke, Jochen. 1992. “Rebuilding Cooperatives for a New Century, On the Future of Indonesian Cooperatives.” Journal of Indonesian Cooperative Studies 1.
