The livestock sector is an important part of the rural economy and milk production is the most vital and significant income generating activity in this sector. The value of milk in Pakistan alone exceeds the combined value of wheat, rice, maize and sugarcane while the country remains the fifth largest producer of milk in the world. However, only 3% of the milk is processed while 97% is marketed in the non-formal sector. Loose milk is either consumed in the villages or sold in the cities through gawallaws (milkmen). Establishment of milk collection centres along the milk pockets can be critical in improving both the quality and quantity of the milk collected and processed. To achieve the dual objective of enhancing productivity of milk along with developing an appropriate marketing mechanism by means of active community participation, PRSP is implementing a GoPb sponsored project for the Establishment of Milk Processing Plants (EMPP). This five-year project was launched in July 2006 at a cost of Rs. 499.32 million and covers six districts Sialkot, Narowal, Gujranwala, Hafizabad, Mandi Bahauddin and Gujarat. The key objectives of this project include the promotion of sustainable livestock development through better milk marketing, enhancement of livestock production through improved and effective veterinary services and socio-economic uplift of livestock farmers in the project area. Under this project, PRSP is also involved with the Livestock and Dairy Development Department and the Pakistan Dairy Development Co. to help improve milk marketing. The overall purpose of the project is to establish a milk marketing system (within the jurisdiction of the project) to increase the income of farmers from dairy products and reduce the dependence of rural families on the earnings of family members engaged in other occupations. The intended Livestock Farmer’s Organizations (LFOs) and Milk Collection Organizations (MCOs) are to give priority to adoption of better livestock management practices and subsequently undertake capacity building of local people. Realizing that equitable distribution of milk through marketing centres and other resources cannot be achieved and enforced by farmers alone, the support of LFOs is considered vital.