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Agricultural landscapes are dynamic environments which change in response to cropping and trade opportunities, available technologies and climatic conditions. In this article, we investigate farmers' vulnerability to climate-related stressors and crop price volatility in rural Navarre, Spain. Specifically, we analyse the extent to which livelihood differences and vulnerability can be partly explained by the development of a large-scale irrigation project promoted by the Spanish and regional governments. Grounded on qualitative and quantitative data gathered across 22 villages, we demonstrate that small-scale diversified farmers appear the most vulnerable and least able to adapt to climate-related stressors and crop price volatility. In contrast, more market-driven, large-scale intensive farmers, who participate in the irrigation project, are the least vulnerable to these stressors. We argue that the irrigation project has increased the short-term adaptive capacity of irrigation adopters while establishing the institutional conditions for the displacement of small-scale farming. Therefore, we suggest that farmers' vulnerability in Navarre can be explained by maladaptive irrigation policies designed to favour large-scale and market-driven agriculture.