Abstract: The objective of the research is to formulate the development intervention strategies based on the identification of farmer’s need on small dairy farmers. The survey and observation were used in this analysis. Using key informants of the heads of cooperatives in Yogyakarta milk line, leaders of farmer groups and the head of livestock department. The results showed that current condition of dairy farming are: low rate of increase in dairy cow population, productivity of dairy cows has not been satisfactory because it has not performed maximally breeding, the level of farmer knowledge in the management of dairy cattle in general have not adequate. The current issues are low productivity of dairy animals, low quality of human resources and high demand of milk. Farmer cooperatives play an important role in the Indonesian dairy industry. The cooperatives collect milk from dairy farmers for sale to processing companies provide credit to farmers and offer extension advices. The aim of producers cooperative is to provide services either free of charge or at a reasonable cost to its members. In addition, cooperative ownership emphasizes participation and control by member producers (farmers). The challenge facing small farmers is how to gain greater access to markets, enhance their value chain position and increase their value-added so as to boost incomes and reduce poverty. Livestock small farmers are most often at the bottom of the value chain: their produce is often a small fraction of the value of the end-product. Without some specific support, small farmers may be at risk of being marginalized. Therefore, some efforts are recommended: stronger linkages among stakeholders in the dairy sector could help harmonize activities, eliminate duplication and harness the ensuing synergies, supportive measures and incentive structures are needed to encourage more formal sector participation in the dairy industry and improved access is needed to basic dairy inputs, credit and animal health.