Economic Empowerment through Cooperatives: The Case of the Setia Kawan Dairy Cooperative in Nongkojajar, Pasuruan, from an Islamic Entrepreneurial Perspective

Abstract

This study investigates the role of cooperatives in empowering rural communities through a case study of the Setia Kawan Dairy Cooperative (KPSP) in Nongkojajar, Pasuruan, East Java, analyzed from an Islamic entrepreneurial perspective. Dairy farming represents a vital livelihood strategy for rural households in Indonesia, yet farmers often face challenges including high input costs, weak market access, and dependence on intermediaries. Cooperatives offer a collective solution by pooling resources, improving bargaining power, and facilitating access to training and innovation. Using a qualitative descriptive method, data were gathered through observations, interviews with cooperative leaders and member farmers, and documentation from cooperative records and government sources. Findings show that KPSP implements empowerment strategies through four main mechanisms: (1) training and mentorship to improve livestock management; (2) market expansion and partnerships with multinational companies to stabilize demand; (3) innovation in product diversification, including the introduction of hydroponic milk; and (4) institutional support such as credit access and affordable feed provision. These initiatives have enhanced farmers’ productivity, income, and confidence, while fostering social solidarity. Importantly, KPSP’s practices align with Islamic entrepreneurship principles of justice (adl), mutual assistance (ta’awun), and social benefit (maslahah), ensuring that empowerment is both economically viable and ethically grounded. The study contributes to the literature by bridging community empowerment, cooperative economics, and Islamic entrepreneurship. It also offers practical insights for policymakers and practitioners seeking to strengthen rural livelihoods through cooperative-based, ethically informed development strategies.