Drought has been a recurrent feature of the American landscape in recent years, resulting in significant impacts in many economic sectors, including agriculture, transportation, energy, recreation, and health; it has also had adverse environmental consequences. For example, the economic impacts of the 1976-77 and 1988 droughts have been estimated at nearly $35 billion and $40 billion, respectively (NOAA, 1982; Riebsame et al., 1990). Other drought years, such as 1980, 1983, 1986, and 1989-91, resulted in significant losses as well. The present and future impacts of the current (1992) drought in the western states and in portions of the east are likely to be substantial and long-lasting. Almost without exception, the occurrence of widespread severe drought in the United States has illustrated the low level of drought preparedness that has existed in federal and state governments. Assessment and response programs that were implemented during the 1970s have been characterized as largely ineffective, poorly coordinated within and between levels of government, and untimely (GAO, 1979; Wilhite etal.,1986). Although state government has made considerable progress in drought preparedness, the verdict is still out on whether the federal government’s response to the 1988-89 drought had improved significantly over previous response efforts. Riebsame et al. (1990) suggests only a moderate improvement in efficiency. The lessons of past response efforts in the United States strongly suggest that a “risk management” or proactive approach to drought management would be a more effective mitigation tool than the “crisis management” or reactive approach heretofore practiced.