Abstract: This research attempts to analyze the characteristic of Indonesian`s dairy cooperative and its performance. The study revealed that, all dairy cooperatives sampled facilitates and gives opportunities to farmers to carry on their small business unit and to improve. They attempt to develop the smallholding dairy farms into economically successful enterprises. It was found that the source of the increasing of cooperative`s capital and the total milk produced in this study is neither farmer`s productivity larger nor cooperative operational unit working efficiently, other than due to the influence of increasing the number of farmer and the dairy cattle. Theoretically, the success of the increasing of capital for the productive investment will afford an upcoming advantageous for the members in the form of better supports and services. However, this study has not yet found a significant correlation between the success in performance of the cooperative and the improvement of farmer`s dairy enterprises.