The study was conducted in Dharwad district, Karnataka with the help of data collected from 200 sample dairy farmers selected using multistage random sampling method. The data pertaining to the period - August 1994 to May 1995 and were collected by survey method. The study revealed that the share accrued to all the factors used under OMPT was found to approximate their contribution to total output. Feed and capital were found to get a greater percentage of increase in absolute factor share. This increase in absolute income under new milk production technology has far reaching implications for personal income distribution. In the absence of effective fiscal measures, this gain leads to inequitable distribution of personal income in rural areas. Because of this increase in absolute share accrued to feed, the feed price has increased .This is windfall capital gain for feed manufacturers and this is a technology led gain accrued to feed manufacturing industry.