Despite some constraints in the economic and physical capital, the practice of smallholder dairy farming provides a source of income and employment for some rural areas in Indonesia. The government has recognized this and designed a cooperative system for developing this kind of farming practice through a range of financial, technical and institutional supports. This cooperative approach has interesting consequences. The interactions among farmers in dairy farmer groups or cooperatives have been demonstrating mutual relationships that can actually provide low-cost production inputs through facilitating integrated farming systems. This kind of relationship can be understood through the theoretical concept of social capital. By employing sustainable livelihood framework and resilience framework, Rudi argues that social capital has become an important element in agricultural development since many studies have demonstrated its capability in enhancing productivity, sustainability and resilience of smallholder farmers.