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Periodic droughts are common phenomena in the semi-arid area of the Canadian prairies. Over the past 50 years there have been four major multi-year droughts in Saskatchewan, some of which were regional and even national in nature. The frequency and intensity of droughts is expected to increase in the future. One of the sectors most adversely affected by droughts is agricultural production (both crop and livestock production). Adaptation to these natural disasters is one way to cope. However, in this context, many questions need answering. These questions are addressed in this study using two communities in Saskatchewan that faced a drought during 2001 to 2003. Although droughts created adverse economic conditions, these were not the only cause of vulnerability of producers. In response to previous droughts, farmers had developed adaptation measures, such as adoption of minimum or zero tillage systems, off-farm employment, and participation in risk management programs of the federal government. In some cases, producers felt the inadequacy of risk-management programs as a major source of increased vulnerability from future droughts.