India remained the largest milk producing country in 2007-08 with a share close to 15 percent of world milk production. However, a combination of factors, led by high GDP growth in particular has led to a rapid increase in the domestic demand for milk. Producer prices for milk continued to increase leading to a corresponding rise in consumer prices. Not only increasing urbanization means greater consumerism, but with the rapid spread of the modern communication systems like television in the rural areas and ever increasing emphasis on advertisements, the consumption pattern for dairy products is rapidly changing all over the country. India is positioning first in the production of milk. Milk processing organizations in India have tremendous potential in dairy industry sector. Dairy sector has ample potential to create opportunities in the field of export of milk products, production of milk and milk products. In light of this the study is conducted in Kolhapur District, one of the districts in which Operation Flood Programme was implemented. The dairy units in Kolhapur are involved in processing and packaging of the buffalo milk and producing the milk products as Shrikhand, Milk Powder, Ghee, Paneer, Cheese etc.