Is Sustainability Key to Become More Resilient After the COVID-19 Pandemic? The PA Farmer Case

Abstract

During the COVID-19 pandemic, businesses are dealing with worker safety, reduced sales, supply chain disruption, among many other challenges. Their managers might think to shift their attention to survival, especially when operating in a highly uncertain industry. This research suggests that there is no better time to reinforce investments in sustainability practices. Firms that manage diverse stakeholder tradeoffs and short-term and long-term pressures become more equipped to be more resilient in the long run. Evidence from dairy industry supports this thesis. Dairy farmers have struggled to meet break-even points due to trade disputes, low milk prices, and a decline in milk consumption in the last few years. COVID-19 has brought significant new challenges to them as many were asked to dump milk and curtail production levels, straining their weak financial position. Using a sample of 587 Pennsylvania dairy farmers, the findings show that farmers who have invested in environmental, labor, and animal welfare practices are more likely to (a) continue their operations and (b) implement an emergency plan. Interestingly, large and women-owned farmers seem the ones to benefit more from these investments, suggesting that tailored programs to these groups are needed. This research provides some important implications for public policy makers, co-operatives, and dairy farmers.