Integrating SAFA Framework for Optimizing and Strengthening Sustainable Indonesian Dairy Cooperative

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Jakarta— Partnerships Determine the Future of Indonesian Dairy Cooperatives, IJBAE Study Reveals the Role of SAFA. Budwi Brontosantoso, a researcher from Trisakti University Jakarta, through a scientific article published in January 2026 in the International Journal of Business and Applied Economics.

The study shows that many cooperatives are locked into narrow, transactional partnerships focused solely on supplying raw milk. While such arrangements guarantee short-term market access, they often fail to strengthen long-term resilience. As a result, cooperatives struggle to cope with price volatility, market dependency, and rising sustainability demands from industry and regulators.

Dairy Cooperatives at a Critical Crossroads

Indonesia’s dairy sector faces mounting pressure. Domestic demand for milk continues to grow, but production remains dominated by smallholders organized in cooperatives that rely on a single commodity and a limited number of buyers. This structure weakens bargaining power and exposes farmers to economic shocks.

According to Brontosantoso, cooperatives should function as people-centered economic institutions—building resilience, social welfare, and environmental responsibility. The problem is that many cooperatives lack a comprehensive framework to assess whether their partnership models truly support long-term sustainability.

Comparing Two Partnership Models

The research examines two dairy cooperatives in Indonesia, each representing a different Multi-Stakeholder Partnership (MSP) typology. Data were collected through in-depth interviews, focus group discussions, field observations, and document analysis involving cooperative managers, dairy farmers, industry representatives, and sector experts.

To evaluate sustainability performance, the study applies the Sustainability Assessment of Food and Agriculture (SAFA) framework developed by the Food and Agriculture Organization (FAO). SAFA assesses sustainability across four dimensions: governance, economic resilience, environmental integrity, and social well-being.

Based on this approach, the research distinguishes between Type I MSPs, which are transactional and prescriptive, and Type II MSPs, which are more transformative and capacity-building.

Economic Resilience Makes the Difference

Among all dimensions, economic resilience shows the starkest contrast between the two partnership types.

Type I partnerships reveal high structural vulnerability. Cooperatives depend heavily on supplying fresh milk to a single buyer, with little incentive to develop value-added products, diversify markets, or invest in innovation. As a result, long-term economic risks are amplified rather than reduced.

In contrast, Type II partnerships display stronger economic foundations. These cooperatives invest in product diversification, brand development, market expansion, and social investment. Partnerships are treated as learning platforms rather than mere transactions, enabling cooperatives to gradually build independence and resilience.

Governance: Strong Administration, Weak Strategy

From a governance perspective, both partnership types show relatively good performance in accountability and member participation. However, in Type I partnerships, governance tends to be procedural—focused on meeting external requirements set by industry partners.

Sustainability, in this case, is not yet embedded as a strategic objective. Type II partnerships, meanwhile, demonstrate more reflective governance practices. Cooperative leaders and members increasingly view governance as a tool to strengthen bargaining power, organizational learning, and long-term vision, although limited human resource capacity remains a major constraint.

Environmental and Safety Issues Remain Overlooked

The study also identifies shared weaknesses across both partnership types. Environmental practices are generally implemented only when they produce immediate economic benefits, such as waste processing into fertilizer or biogas. Key issues like water conservation and animal welfare remain underdeveloped.

Even more concerning is occupational health and safety. In both cooperative models, safety risks are often perceived as individual responsibilities rather than institutional ones. This creates a blind spot in social sustainability, despite otherwise strong social capital within cooperatives.

Implications for Policy and Industry

These findings carry important implications for policymakers, dairy processors, and cooperative managers. Partnerships that focus solely on securing milk supply may stabilize short-term operations but undermine long-term sustainability by reinforcing dependency.

Brontosantoso argues that integrating the SAFA framework into partnership design can help cooperatives systematically identify weaknesses and plan strategic improvements. Such an approach also supports broader Sustainable Development Goals, including poverty reduction, food security, decent work, and inclusive economic growth.

Author Profile

• Budwi Brontosantoso, PhD -  Universitas Trisakti, Jakarta.
  

Source

Brontosantoso. Integrating SAFA Framework for Optimizing and Strengthening Sustainable Indonesian Dairy Cooperative.

Business and Applied Economics, Vol. 5 No. 1, Januari 2026, hlm. 343–358.2026

DOI:https://doi.org/10.55927/ijbae.v5i1.571       

URLResmi: https://nblformosapublisher.org/index.php/ijbae