Karnataka ranks second, next only to Rajstahan in India, in terms of total geographical area prone to drought. Among its 27 districts, 18 are drought prone. During the years, 2001-02, 2002-03 and 2003-04 it faced consecutive droughts. A study was conducted in 2004 to assess the consequences of 2002-03 drought in Karnataka with special emphasis on livestock and fodder components. Three districts of Karnataka (Chamrajnagar, Gadag and Gulbarga) each belonging to severely, moderately and less drought affected categories and representing three agro climatic regions were selected through multistage random sampling method. Data collected from 271 households was analysed. The annual income of the households reduced to half in drought year. The reduction was more in case of crops (61.42%) followed by livestock (30%) and labour (20%). There was significant difference in the number of farmers purchasing fodder during normal (50.92%) and drought years (81.18%). Similarly significant difference was noticed for the average quantity of fodder purchased in normal (22.83q) and drought years (38.80q); per ton fodder value (Rs.2199 in normal and Rs.4166 in drought years); average distance traveled to purchase fodder (4.25 km in normal and 44.07 km in drought years). In drought year, 17.34 percent households resorted to distress selling of livestock and the average herd size reduced from 4.15 ACU to 3.85 ACU. While majority (70.84 %) purchased fodder to mitigate drought effect, 32.10 percent of them fed less to the livestock than the usual quantity. The negative effects of drought on fodder and livestock would be reduced by enabling them to access fodder in a radius of 10 km of their habitation through fodder banks. This saves considerably their exorbitant expenditure towards transportation of fodder.