The researchers, led by Marco Waser from the University of Basel, stress that they do not know what components of the raw milk may be responsible for such effects, but they could be linked to the pathogenic and non-pathogenic microbe levels in the milk.
From this point of view, the research appears to be in line with previous studies that have reported that probiotic bacteria may reduce the risk of certain allergies like eczema and asthma in infants.
Many studies, both epidemiological and animal, have reported that disorder of the intestinal microflora is closely related to food allergy development, said the researchers, suggesting that the non-pathogenic content of farm milk could offer an interesting avenue of future study.
"The results of this study indicate that all children drinking farm milk have a lower chance of developing asthma and hay fever ," said Dr Waser.
"However raw milk may contain pathogens such as salmonella or enterohaemorrhagic E coli and its consumption may have serious health risks.
"We need to develop a deeper understanding of why farm milk offers children this higher level or protection and investigate ways of making the product safer, while retaining these protective qualities," he added.
"At the moment we can only speculate about why farm milk protects children against asthma and allergies.
Perhaps it is because farm milk has different levels or compositions of pathogenic and non-pathogenic microbes to milk sold in shops."
The PARSIFAL study - Prevention of Allergy Risk factors for Sensitisation in Children related to Farming and Anthroposophic Lifestyle - looked at 14,893 farm children aged between five and 13 from rural and suburban communities in Austria, Germany, the Netherlands, Sweden and Switzerland.
Parents were asked to complete detailed questionnaires about their child's consumption of milk, butter, yoghurt, eggs and fruit and vegetables and whether they were farm-produced or shop-bought.
Questions were also asked about breastfeeding habits and any allergies or asthma problems affecting the child or their family.
Blood tests to measure levels of the allergy specific immunoglobulin E (IgE) - the predominant antibody associated with an allergic response - were also carried out on about 4,000 children from across the five countries.
Writing in the journal Clinical and Experimental Allergy , Waser and co-workers report that consumption of farm milk, whether boiled or not, was associated with a reduction in the occurrence of asthma by 26 per cent, hay fever by 33 per cent, and food allergy by 58 per cent.
No effect was observed for eczema.
"It is interesting that there was no difference in the farm milk results regardless of whether it was boiled before consumption.
As boiling is likely to have been over-reported, this could indicate that pasteurisation is not as important as previously thought, as compounds other than microbes may offer a protective role," said Dr. Waser.
With previous research also showing a benefit from omega-3 fatty acids, future studies should include fatty acid profiles in addition to the microbial content, said the researchers.
"But despite our findings, we cannot recommend consumption of raw farm milk," he added.
"A deepened understanding of the relevant 'protective' components of farm milk and a better insight into the biological mechanisms underlying the reported epidemiological observation are warranted as a basis for the development of a safe product for prevention," concluded the researchers.
In an accompanying editorial, Michael Perkin from the University of London said the paper added to the body of evidence reporting the benefits of unpasteurised milk consumption.
"The potential of identifying the underlying mechanism that yields a two-thirds reduction in sensitization must be worth pursuing.
The key issue now is to determine what underlies this protective effect and whether it is possible to separate the protective from the potentially hazardous elements," he said.
According to the European Federation of Allergy and Airway Diseases Patients Association (EFA), over 30m europeans suffer from asthma, costing Europe €17.7bn ($23.8bn) every year.
The cost due to lost productivity is estimated to be around €9.8bn ($13.2bn).
The American Lung Association stated that almost 20m Americans suffer from the condition - reported to be responsible for over 14m lost school days in children, while the annual economic cost of asthma is said to be over $16.1bn (€11.9bn).
The work was supported by the European Union, the Swiss National Research Foundation, the Swiss-based Kuehne-Foundation and the Swedish Foundation for Health Care Science and Allergy Research.
Commenting independently on the research, Dr Judith Bryans, director of the UK's The Dairy Council told NutraIngredients.com: "It is a very interesting study and points towards the fact that there may be factors in milk that are beneficial under those conditions.
However, most people consume pasteurised milk, and therefore it would be good to have the research to show that the same benefits occur with pasteurised milk."
Source: Clinical and Experimental Allergy May 2007, Volume 37, Pages 661-670 "Inverse association of farm milk consumption with asthma and allergy in rural and suburban populations across Europe" Authors: M. Waser, K.B. Michels, C. Bieli, H. Floistrup, G. Pershagen, E. von Mutius, M. Ege, J. Riedler, D. Schram-Bijkerk, B. Brunekreef, M. van Hage, R. Lauener, C. Braun-Fahrlander, the PARSIFAL Study team Editorial: Clinical and Experimental Allergy May 2007, Volume 37, Pages 627-630 "Unpasteurised milk: health or hazard ?"
Author: M.R. Perkin