Under the guidance of government and with active participation of farmers,rural cooperative economy has been developing,but it is in its initial stage.

This paper expounds the relation between cooperative economy and market economy,analyses the objective ne-cessity of energetically developing the rural cooperative economy in China,points out that cooperative economy is a necessaryway for farmers to participate in the system of market economy,and puts forward some suggestions on how to develop coopera-tive economy in China.

After the establishment of socialist market economy, on the base of rural contract responsibility system,develop and perfect the rural cooperative economy is the most important way to keep rural economy developing continuously、steadily and healthfully.

According to the theory of Parsons AGIL Former,the article analyzes the functions of rural economic cooperation organization,as an action system,and its function obstacles,and brings forward the corresponding countermeasures,in the hope of promoting the development of rural economic cooperation organization.

China can learn from American and Japanese experiences and make significant progress in the following fields: agriculture financial aid,construction of related laws,development of rural economic cooperation organizations,socialized backfeeding,and etc.