Future-Oriented Dairy Farmers’ Willingness to Participate in a Sustainability Standard: Evidence from an Empirical Study in Germany

Abstract

As a major agricultural subsector, milk production plays an important role in the EU 28. Political decisions such as the abolition of the milk quota system in 2015, highly volatile milk prices, high bargaining power of retailers and fierce international competition have led to challenges for both farmers and dairies and have created a need to improve competitiveness. Furthermore, the dairy sector is increasingly subject to societal demands for higher animal welfare and ecological standards. The concept of sustainability in the form of a production standard can be seen as a means for both dairy farmers and dairies to gain competitive advantages and meet stakeholders’ demands. Farmers’ willingness to participate in a sustainability standard is a key factor for its successful implementation. One attractive target group for such a standard are future-oriented farmers who plan to stay in dairy farming in the long run. This study, therefore, focuses on future-oriented dairy farmers and investigates their willingness to participate in a comprehensive sustainability standard. A hierarchical agglomerative cluster analysis is conducted to identify different groups based on their willingness to participate. 211 farmers can be categorized into three different clusters: ‘halfhearted sustainability proponents’, ‘highly dedicated sustainability proponents’ and ‘profit-oriented sustainability refusers’. Further analysis provides insights into the determinants of farmers’ willingness to participate in a sustainability standard. The results of this study provide manifold starting points for deriving managerial implications for the successful implementation of sustainability standards in European dairy farming