Under the National Drought Policy launched in 1992, drought was to be regarded as a normal feature of the operating environment for Australian farmers with an increased emphasis on improved drought preparation and self-reliance. Assistance provisions in the case of 'exceptional' droughts were to remain in place however. Several commentators have questioned the need to single out drought risk for govcmment intervention on the grounds of resource misallocation and that this approach is inconsistent with the 'total' risk management approach now widely advocated by advisers. In this paper, the results of a whole-farm stochastic budgeting analysis on a NSW and WA fam1ing system are reported. The objective is to provide perspective on drought as one of several causes of poor financial performance. Results indicate that while drought events lasting several production cycles are a significant contributor to poor performance, they are not exclusively so. Combinations of other factor can be equally significant, lending support to the notion of a whole-farm approach to risk management. Perhaps it is time to review the basis for the application of exceptional circumstances in fanning. A case can be mounted for support in business threatening' situations, but it should be approached from a whole-farm perspective with limits on access to support.