Rural finance is the important factor in supporting the development of farmer cooperatives. In this paper, we obtain the national county panel data by sort the information about farmer cooperatives and bank outlets from the Tianyancha etc., and use the two-way fixed effect model to examine the influence mechanism of rural financial market competition on the development of farmer cooperatives, and find that the competition in the rural financial market will improve the development speed of cooperatives, and narrow the gap of the scale of cooperative development, but exerts insignificant impact on the scale of cooperative development. After the IV regression and robustness test, the conclusion is still valid. Therefore, rural financial policies should focus on improving rural financial supervision to promote competition to support the development of cooperatives.