This study aimed to assess the operational efficiency of the agriculture cooperatives in Taiwan by the Three Stage DEA Model. Use of the Three Stage DEA Model can rule out the influence of environmental variables on agriculture cooperatives and also overcome data envelopment analysis deficiencies like random noise to assess agriculture cooperative performance under the same environment. The results of the study show that the estimated value of third stage efficiency is lower than that of the first stage, indicating agriculture cooperative efficiency has been highly overestimated before environmental variables are adjusted. In addition, Taiwan agriculture cooperatives obtain an average value of 0.75 in technical efficiency, suggesting that the operation of agricultural cooperatives can be improved by 25% more. Finally, technical efficiency could be overestimated by 6.9% if the environmental variable was not taken into account in this study.