A survey of more than 150 small dairy farms and local economic, professional and political stakeholders was conducted in six regions of France. It revealed five types of farm strategy in relation to the farm’s size, agricultural diversification, importance of direct selling, and farm and household incomes. A “resource-based” approach shows that the sustainability of small farms is linked to economic, social and human resources. In this way the study shows the important part played by the household’s income and the farmer’s integration in the social fabric. This approach is complemented by an institutional approach: The sustainability of a small farm depends on local economic, professional and political institutions and an important role is played by the territorial context. Local representations can be formalised in different development processes and concern both the possible future of the dairy sector and the types of farm that are in a position to be competitive, and in this way contribute to the selection of dairy farms. This study shows that small dairy farms are not doomed to disappear. The mobilisation of the farm household’s internal resources combined with the positive impacts of the “local dairy surroundings” can offset in part, but successfully, the dairy sector’s permanent restructuring.