Strategic non-use:

Abstract

This paper investigates a counterintuitive climate adaptation strategy: the "strategic non-use" of high-input resources by smallholder farmers in rural Tanzania when faced with extreme heat. We examine the mitigating role of village cooperatives in driving this low-input production behavior and its subsequent impact on maize yields and household welfare. Our study was conducted in three waves from 2008/09 to 2012/13, analyzing the effects of weather shocks on household welfare in Tanzania using data from the. Tanzania National Panel Survey and weather data from the Global Land Data Assimilation System (GLDAS) and Climate Hazards Group InfraRed Precipitation with Station data (CHIRPS). We find that extreme heat is a devastating shock, reducing maize yield by 8.9% and household income by 3.0%, with the impact being significantly more severe on households in villages without cooperatives. We uncover a novel dual- mechanism for this institutional resilience: Village cooperatives strategically promote low-input adaptation.We demonstrate that the cooperative's yield-saving mitigation is achieved by rigorously guiding the community to reduce inorganic fertilizer use during the extreme heat season. Simultaneously, cooperatives, promote long-term sustainability investments like erosion control. Critically, these contrasting mechanisms reveal a policy trade-off: the short-term benefit of yield protection comes at the cost of the cooperative promoting erosion control, a sustainable measure associated with a significant short-term reduction in farmer income. This finding re-frames the role of cooperatives from being mere input promoters to essential institutions for climate-smart risk management and financing the adoption of sustainable practices. However, these positive effects have a limited impact on small farmers; therefore, establishing more inclusive cooperatives and greater involvement of small farmers in decision-making processes can be effective. Government and policymakers should prioritize village cooperatives in their policy actions, particularly in light of the growing climate risks.