**1.Introduction**

Pakistan is considered among the leading raw milk producing countries. Unlike the production systems in the developed countries like United States of America and most of Europe, milk production systems in Pakistan have similar characteristics to the most developing countries of subcontinent. Characteristically, smallholding with subsistence- or market-oriented-level farming keeps the major share (about 90%) followed by peri-urban or commercial-level farming [1].

Current dairying in Pakistan is a combination of both traditional and commercial methods of raising dairy animals, and producing milk and milk products. During last two decades, commercial farming with imported dairy inputs has increased and reached roughly about 1% of the total raw milk production. With the changing human needs and urbanization, the traditional system are on the edge of converting from subsistence level to more commercial and large-scale production systems during the said period [2]. In addition, policy made at government level in 2007 (Pakistan's first-ever Livestock Policy) placed considerable focus on dairy sector development. This has invited several private stake holders to invest in the farming, procurement, and processing of dairy and dairy products.

Despite the fact that the government has identified the dairy sector as one of the key priority sectors for development, the farmers being the main stakeholders are still facing constraints of inherent nature. They find limited opportunities to access consumers or industry directly and, therefore, have little control on the price or quality of milk owning to small-sized enterprises and limited resource inputs.

This chapter reviews last 10 years data and reports those significant changes that have been brought about in dairying in the country. The main objective of this chapter is to identify the current trends in dairy industry of Pakistan and describe those factors, which can influence the sustainability and profitability of dairying in the near future.
