The spirit of making the cooperative as a cornerstone of the economy began to fade after the reform era. In measure, the number of cooperatives indeed experienced an increase each year, but the percentage of cooperatives categorized as inactive cooperatives continue to increase.
According to data from the Indonesian cooperative department (2016), the percentage of inactive cooperatives in Indonesia reached 29.1% by the end of 2015, a significant increase compared to the year 2000 which was only 13.7%. The VUC condition is similar to the fall of cooperatives in the Indonesian economy.
The stipulation of Presidential Instruction number 18 the year 1998 was the beginning of the VUC decline in Indonesia, the role of VUC to help the economy of rural communities such as providing agricultural raw materials is instead taken over by the market mechanism. This made the VUCs in villages collapse and villagers lost the means to get agricultural needs and to market agricultural products that were forced to rely on the middlemen.
The lack of agricultural support means that farmers have difficulty in processing and producing quality products while marketing the agricultural products to middlemen will be very harmful to them because the price of grain purchases set by the middlemen is usually well below market prices. Consequently, farmers' incomes are sometimes insufficient to fulfill their basic needs. It is necessary to revitalize the role of the VUC to help villagers to meet their welfare.
VUC revitalization efforts are key in restoring the VUC function as early as the business entity establishment. In returning the VUC to the village community, VUC reform is needed by making it as a new structure economic institution capable of providing facilities as well as protection of members' efforts in systematic business (Yuwono, as cited in Ika 2009).
The four VUC Revitalization points listed in the Bulaksumur declaration on August 1, 2009, can be a step-by-step solution to restoring the prosperous of VUC.
The first is an effort to check Presidential Instruction No. 18 the year 1998 about VUC coaching. Policy revitalization is important to restore the cooperatives function as usual.
The second is the reinvolvement of VUC in the distribution of production facilities, food procurement, and rural community economic development programs so that they can be free from middlemen.
The third point is improving the quality of human resources in VUC management through cooperative education, training, and mentoring. This is done to remind the quality of farmers in planting so they can harvest more and increase the quality of the agricultural product.
Then, the fourth is reforming the VUC begin by integrating farmer groups and total farmer groups as one of the organs in the VUC structure. This institutional reform effort is done to strengthen the role of farmers in village cooperatives so that village cooperation can develop according to the potential of these local farmers.
The implementation of these four points of declaration in the development and management of VUC is expected to improve the welfare of the villagers where the majority of them work in the agricultural sector.
