Changes in the economic, demographic and political characteristics of Thailand have had a strong impact on the traditional nature of Thailand's agriculture and livestock industries over the last few decades. This paper outlines the development of the Thai dairy industry and discusses economic factors including government policies, influencing its development. Land rights have effecrted its development, eg. the availability of credit to dairy farmers. In addition, the small size of Thai farms and lack of a ready market in land has resulted in small herd sizes. Furthermore, the extensive use of common property resources has implications for resource management and sustainable agricultural development in Thailand. A number of environmental issues are considerd, associated with raising dairy cattle and other livestock in Thailand. The growth of the Thai industry highlights the urgency of cattle disease control, especially the control or eradication of particular diseases. The policy implications of this are discussed.