The world dairy industry has been driving their dairy policy on the basis of the self-supportihg principle. With progressing the GATT negotiation, the objective production amount has been reduced to maintain the optimum level, which decreasing the extra supply and over-stock before the U.R talks. The Oceania countries, where has the price competition capability, are continually increasing the milk production amount. Even through the USA is trying to increase their production amount with new export policy, the U.S.S.R collapse-down caused to decrease the milk production in world-wide basis. Because the U.S.S.R produced the highest amount of milk in the world. Moreover Europe Union countries, which recorded the half amount of dairy products in the world was decreasing their milk production. Therefore, about 4% of shortage is encountering at major dairy production countries in the standpoint of supply and demand. The drastic increasement of foreign dairy product import affects the domestic dairy industry with raw milk replacement and new dairy food demands creation since 1995, the initial period of free import system. Now, the domestic dairy industry are facing the inevitable problems such as the correction of producting and processing system. First of all, our dairy industry should resettle down the dairy production structure on the basis of self-supply of raw milk and offer the accurate dairy food informations. We still need to improve the raw milk quality. Also, more efforts are needed to have proper raw milk price policy. General domestic policies including the settlement of raw milk supply and demand, the reliability of inspection system in raw milk, ideal raw milk price system, centralization of raw milk collection, specially separated dairy organization should be improved legally in our dairy industry.