Abstract: The development of characteristic agricultural products is vital for advancing rural industries and supporting comprehensive rural revitalization. However, these products often face a gap between value propagation and value creation. This study examines how the Chunlu cooperative federation upgrades the value chain for ratoon rice and proposes pathways for enhancing the value chain of characteristic agricultural products through value upgrading and relationship upgrading. The findings reveal that Chunlu achieved backward integration of the industrial chain via organizational, technological, and service function integration, aligning market demand with the production source. Through forward industrial chain integration, it internalized value-creating activities including processing development, brand marketing, and sales network establishment, maximizing internal surplus value. Furthermore, the cooperative gains industry influence by participating in standard setting and leverages regional agricultural product brand effects plus government resource allocation to establish sustainable competitive advantages. The upgrading of relationships among value chain entities serves as a robust support for the value upgrading of specialty agricultural products. Between the Chunlu and its member cooperatives, a governance mechanism combining formal institutions with informal constraints achieved incentive compatibility, fostering stable exchange relationships. The Chunlu's pursuit of large-scale development aligns with the functional tasks of local governments, and through cooperative mechanisms, it strikes an effective balance between pursuing profit maximization externally and adhering to its internal function of benefiting agriculture. This study provides practical insights for improving specialty agricultural products, promoting rural industries, and benefiting farmers.