"Crackdown" in Nglanggeran Village

KOMPAS/ERIKA KURNIA

Tourists take photos with the backdrop of an ancient volcano in Nglanggeran Village, Patuk District, Gunungkidul Regency, Yogyakarta Special Region, on Thursday (5/2/2024).

Nglanggeran Village in Patuk District, Gunungkidul Regency, Yogyakarta Special Region, has become one of the pilot villages for the mentoring program for management village funds. Thanks to the right mentoring program with the collaboration of a number of stakeholders, this village in the southeast of Yogyakarta City continues to develop its area.

Nglanggeran Village Secretary, Rusmiati, believes that assistance and business counseling from these institutions are very helpful in completing the village funds allocation, which has been mostly used to combat poverty and build infrastructure.

For our community that is constantly exploring the potential of tourism, the assistance and training provided to complement village funds are very good for boosting the economy of the tourism sector.

In 2024, the village fund for Nglanggeran Village is worth IDR 813 million. Approximately 20 percent is allocated for direct cash assistance and around 30 percent for infrastructure development.

"For our society that is currently exploring the potential of tourism, the assistance and training provided to complement village funds are very good for boosting the economy of the tourism sector. We hope that there will be many things that we can develop if this can continue," he said.

KOMPAS/ERIKA KURNIA

Director General of Fiscal Balance at the Ministry of Finance, Luky Alfirman, was in Nglanggeran Village, Patuk District, Gunungkidul Regency, Special Region of Yogyakarta on Thursday (May 2, 2024).

Director General of Financial Balance Ministry of Finance (Kemenkeu) Luky Alfirman during a visit with journalists in Nglanggeran Village, Thursday (2/5/2024), stated that the Ministry of Finance is involved in assisting and supervising fund management village. This step is to mitigate challenges related to community capacity in managing the budget.

"We know that managing money is not easy, we want to use it as much as possible for welfare, but don't forget about governance," he said.

Therefore, Luky continued, the Ministry of Villages, Disadvantaged Regions, and Transmigration (Kemendes PDTT) oversees and assists in the management of current funds. The Ministry of Finance is interested in ensuring that village funds have an impact on the village.

Also read: Village Fund Management

It is BUMDes that is the target of assistance. The Ministry of Finance is collaborating with universities and government institutions to run it from 2022.

In 2024, a target of 2,000 BUMDes is set to collaborate with eight universities and the National School of Accountancy (STAN). The hope is that villages will be able to manage finances and develop their potential.

Regarding Nglanggeran village, the Indonesian Eximbank's Export Financing Institution (LPEI) provides assistance through the Village Foreign Exchange program. There is also the Sarana Multigriya Financial (SMF) through the housing financing program and the Government Investment Center with coaching and financing for ultramicro (UMi).

KOMPAS/ERIKA KURNIA

The signing of a cooperation agreement between the Government Investment Center and Nglanggeran Village, Patuk Subdistrict, Gunungkidul Regency, Special Region of Yogyakarta, on Thursday (2/5/2024) for the companion and financing program of ultramicro (UMi).

Since 2023, the village of Nglanggeran has received assistance from LPEI in the form of business mentoring for cocoa plantations, which are commonly owned by the residents of Nglanggeran. The assistance is provided through the BUMDes, a cooperative enterprise known as Amanah Doga Sejahtera.

LPEI Executive Director of Business Development Maqin U Norhadi on the same occasion explained that LPEI provides assistance to cocoa businesses in several forms. This assistance includes assistance with cocoa product processing units, assistance with organic certification, assistance with quality and technical production, assistance with export procedures and administration, as well as business matching fermented cocoa with entrepreneurs from Switzerland.

Also read: The Missed Village

So far, the tourism village in the southeast of Yogyakarta City has a cocoa plantation of 10.2 hectares. The production of cocoa fruit reaches 10 tons per year with a fermentation capacity of 132 kilograms per month.

"Cocoa is one of the sources of income for farmers in Nglanggeran Village. After being assisted by the Village Income program, there is added value to the price of fermented cocoa, which originally sold for IDR 25,000 per kilogram and now sells for IDR 100,000 per kilogram," said Maqin.

KOMPAS/ERIKA KURNIA

Coffee fruit and beans produced by Nglanggeran Village, Patuk District, Gunungkidul Regency, Yogyakarta Special Region, Thursday (2/5/2024).

The Chairman of the Amanah Doga Sejahtera Cooperative, Ahmad Nasrodin, said that although the recent increase in cocoa prices is also due to the scarcity of global cocoa production, the assistance from LPEI has contributed to increasing the cocoa's value in the village.

"The assistance of a produce management unit worth Rp 20 million and their guidance in closing our gaps has enabled us to improve the yield of our farm, which was previously mostly done manually. A buyer from Switzerland also came yesterday based on the recommendation of LPEI. So, the opportunity in cocoa is exceptional. Now it depends on the farmers, whether they can seize this opportunity or not," said Ahmad.

Sarana Multigriya Finansial (SMF) has been collaborating with Nglanggeran Village since 2019. The collaboration is mainly for financing the lodging facilities owned by residents as part of the village's tourism destination program.

Meanwhile, the Government Investment Center will hold a mentoring and ultra-micro financing program. This program is intended for communities in need of business financing.

KOMPAS/ERIKA KURNIA

The Chairman of Amanah Doga Sejahtera Cooperative, Ahmad Nasrodin, was interviewed by reporters in Nglanggeran Village, Patuk District, Gunungkidul Regency, Yogyakarta Special Region, on Thursday (May 2, 2024).

The government, through the Ministry of Finance, has allocated IDR 71 trillion for 75,259 villages in 434 regencies and cities in 2024. This budget will be maximized for villages with good financial governance and performance.

A budget of IDR 69 trillion was disbursed before the fiscal year began. The remaining IDR 2 trillion was allocated in the current year as incentives or additional village funds. The funds from the State Revenue and Expenditure Budget (APBN) are only a portion of the IDR 857 trillion transferred to the regions in 2024.

There are fiscal incentives for districts and cities that have good performance, as well as for villages. We provide motivation and rewards for villages with good performance.

Village funds are mandated by Law Number 1 of 2022 regarding Financial Relations between the Central Government and Regions (HKPD Law). The government has been implementing it every year since 2023.

In allocating village funds, the government uses various schemes. For the budget to be given in the current year, certain criteria are applied. Meanwhile, the determination of the budget before the current year takes into account basic allocation, affirmative allocation, formula allocation, and the recently implemented performance-based allocation.

"So, there are fiscal incentives for districts and cities that have good performance, the same for villages. "We provide motivation, give rewards to villages that perform well (in terms of taxes and public services)," said Luky.

Based on the program, this village fund is channeled to support the handling of extreme poverty. For direct cash assistance to villages with target beneficiaries (KPM) families, the portion is at most 25 percent. Targeted resident data can use central government data as a reference.

There is also a portion to support food and animal resilience programs, with a minimum of 20 percent allocation. Another portion is allocated to support prevention and reduction of small-scale village diseases and/or to support priority sector programs in villages through financing assistance for village-owned enterprises (BUMDes).

Also read: HKPD Law Passed, Government Optimistic Fiscal Decentralization is More Optimal

Village funds can be allocated for village development programs in accordance with the potential and characteristics of the village. Village funds can also be used for operational purposes of the highest level of village government, up to 3 percent.

The budgeting of village funds through the HKPD Law, according to Lucky, is a milestone achievement since Indonesia began implementing fiscal decentralization in 2004. Village funds emerged in 2015, when the government issued Law Number 6 of 2014 concerning Villages.

The village fund is one of seven types of income that villages can receive according to the foundation of the Village Law. Its allocation is also supervised by three ministries at once, namely the Ministry of Finance, the Ministry of Home Affairs, and the Ministry of Village, Development of Disadvantaged Regions, and Transmigration.

Since 2015 until 2024, the government has allocated a village fund worth Rp 609.68 trillion. In 2015, the distributed village fund amounted to Rp 20.7 trillion for 74,093 villages, or an average of Rp 280.3 million per village.

From 2015 to 2024, the government has budgeted village funds worth IDR 609.68 trillion.

In 2024, village funds will increase more than threefold to Rp 71 trillion with an average value of Rp 943.34 million per village. Each village can now receive various funds, ranging from around Rp 900 million to over Rp 1 billion per year.

"We distribute it so that on one hand we can recognize the differences between villages, and on the other hand we also want this distribution to be fair," said Lucky.