ABSTRACT Plasticulture has proliferated in Egypt due to water scarcity, production uncertainty, and climate stress. Even though it is extensively promoted for boosting productivity and climate resilience, its long‐term impacts on farmers' livelihoods and environmental sustainability are inadequately addressed. In this study, we employed thematic analysis informed by grounded theory (TAG) to examine the interplay among plasticulture adoption, climate stress, market governance, and knowledge systems in shaping future adaptation strategies. We analyzed qualitative data from multisite focus group discussions conducted across three major plasticulture‐producing governorates in Egypt. Using an iterative, comparative, and predominantly inductive analytical process, we developed a conceptual model that identifies key processes, mediating conditions, and feedback loops influencing adaptation outcomes. Our findings indicate that the model identifies adaptive viability under compounding stress as the central concern shaping farmers' adaptation decisions. Even though plasticulture produces short‐term productivity gains, it is associated with environmental trade‐offs, profit instability, and advisory uncertainty. These findings suggest that the sustainability implications of plasticulture are shaped by reinforcing feedback mechanisms involving environmental, economic, and informational conditions, highlighting the importance of context in determining whether plasticulture contributes to resilience or vulnerability. The findings highlight tensions between boosting food production (SDG 2) and the obstacles to responsible production and environmental sustainability (SDG 12), while underscoring the need for systemic climate action (SDG 13). Successful climate adaptation requires interventions that disrupt economic, environmental, and informational feedback loops by integrating governance of waste management, advisory systems, and markets, rather than solely advocating for technology adoption.