This book analyses the economic effects of subsidies for milk production. Problem of inconsistency of Entities laws and regulations for agricultural subsidies on State level was identified as the main cause of inefficiencies in subsidies and their low economic effects. Political situation in country has brought agricultural producers in unequal position depending on their residence. Having three laws makes room for manipulations of budget intended for development of agriculture and is one of key factors why agricultural sector is underdeveloped. Key focus of this paper was on analysis of production of raw cow milk, procedures of applying for agricultural subsidies for milk production, costs of these applications and other problems that milk producers face in such procedures. This paper, using official government’s statistics and comparing it with information collected from case studies, measures to what extent current legislation and regulation affect milk producers and what should be done to improve their position, particularly in overcoming problem of discrimination caused by use of different regulation.