According to research, this paper aims at studying and revealing the role of the milk cooperatives in village development through the recovery and growth of the overall dairy chain in Karnataka. The study reviews and analyzes the outcomes of the milk co-operative milk producers implemented by the KMF marketing assistance program and continued by the center for agribusiness and co-operative milk producers. The paper also identifies and discusses the forms of vertical integration occurring in the dairy sector of the state and concentrates on several important issues viz., contractual mechanism between farmers and cooperatives and farmers and processors, problems and challenges milk producers face, farm social investments. The paper also aims at studying the relationships between member farmers and milk marketing cooperatives.