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The aim of this paper is to investigate the role of producer cooperatives (PCs) on rural development in Fars, Khorasan, Semnan, Golestan and Hamadan provinces of Iran in 2007. More specifically, this paper focuses on the economic aspects and social changes occurred in rural area concerning the cooperatives development. In order to measure quantitatively the effectiveness of economic and social changes, we included per capita income, factors productivity, expansion of rain irrigation, technology changes as economic indicators and the rate of participation in social activities, rate of migration and job creation as social indicators in the model. The findings based on 212 Producers Cooperative sampling data in the selected provinces show that the PCs have played a positive role in preventing migration to urban area. Moreover, the PCs have statistically significant and positive effects on the production, employment and labor productivity in this sector. In addition, in some areas they contributed to develop commercial agriculture.

Keywords: Efficiency, Producer Cooperative, Migration, Iran’s Agriculture Sector JEL Classification: J54, J61, B25, D73

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