PREFACE: Modernization has led to a great deal of improvement in day-to-day requirements, making living standards more luxurious. Keeping in view the changing and advance scenario, we are focusing to improve the lifestyle of farmers and milk collection system. This will prove a great boon in the field of agriculture that forms the backbone of any nation. Dairy farming is worldwide joint business venture of farmers. Dairies collect milk from farmer’s everyday & payments for this milk are done according to the rates per liters. This rate depends on various factors like weight, FAT, CLR & SNF of the milk. To achieve these objectives we have developed a system that will measure these parameters and calculate the payment automatically. The system consists of two units; one unit is placed at milk collection centre (MCC) that consists sensors, microcontroller, LCD, card connector & keypad as main elements. This unit collects data & stores it in a memory card given to the farmer. The other unit is at cash counter (CC) also consists of microcontroller which reads the data from memory card & sends it to PC where calculation of bill is made for making payment to the farmer.