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Drought is a constant part of rangeland dynamics in arid and semi-arid regions, and has enormous impacts on extensive livestock production by reducing outputs as well as by generating short-term farm decapitalisation (e.g. when livestock die). Since rural people rely on animal husbandry for their livelihood, productive losses become a social problem. Approaches to deal with drought have generally been focused on the livestock-range management linkage, with many suggestions originating from different disciplines. However, fewer efforts had been made to understand the adaptive capacity of households to cope with drought, through changing from on-farm to off-farm approaches. We assessed the implications for household gross income of different smallholder survival strategies, in the context of a severe regional drought. Three strategies were selected: (i) social networks involving partnerships, (ii) income diversification, and (iii) farm production diversification. While drought impacted homogeneously on the production indicators among the different strategies, differences were apparent in household economic performance. Better prices obtained from associated sales and off-farm income strategies registered better household gross income levels. For these cases the effect of drought on farm productivity could be decoupled from household income. Results provide new insights in understanding the social impact of drought on rangelands, challenging current ideas about how governments can support poorest and most vulnerable farmers in rural arid and semi-arid regions.