Dairy farming plays a key role in the lives of poor, rural people in developing countries, providing a major proportion of their cash income, capital assets, draught power, fuel and fertilizer. Small-scale dairying produces valuable food products and provides a regular income and work. Dairying also provides much of the cash needed to perform other socioeconomic activities. Milk production generates reliable incomes to meet household livelihoods (Somda et al., 2005). Possession of dairy animals means also financial security, status, self-confidence and an opportunity to have some control over their live (Ramkumar, 2004). It is also more labour intensive and supports substantial employment in production, processing and marketing. This is partly because dairy production often require the introduction of specialised dairy breeds and increased levels of inputs (nutrition and health care) and good linkages to markets, both for milk sales and input acquisition. In Kenya dairy farming has become a very significant source of income and food for an estimated 625,000 smallholder producer households and for those involved in the marketing of milk, in total some 25% of all households in Kenya benefit from dairy farming (Muriuki et al., 2001). In Tanzania about 700 000 dairy cattle are available under smallholder farmers, with an average of 4 cows per household, there might be 175 households keeping indoor fed dairy cattle in Tanzania. Dairy farming in Tanzania is estimated to grow at a rate of 6% per year and there are about 190,000 registered farmers currently (Swai and Kurimuribo, 2011). Most of these cattle are kept in the highland and relatively cold regions of Arusha, Mbeya, Kagera, Iringa and Morogoro. Smallholder dairy farming in Tanzania has had a significant impact on poverty alleviation in terms of income, education, food security and stabilizing farm incomes (Kisusu et al., 2000).