Agricultural cooperatives in China, known as Farmers’ Professional Cooperatives (FPCs), are becoming popular and have been intensely promoted by the Chinese government to facilitate agro-industrialization of small farmers. This paper investigates the impacts of the participation in FPCs on farm income by dividing rural households into two village groups (whether villages were はっdesignated as “agricultural model villages”) as well as controlling endogenous bias of participation. Estimated results show that the economic impacts of the participation in agricultural model villages are much larger than those in other villages, since agricultural related services offered by FPCs in appear to be more standardized in agricultural model villages.
