Inspired by concerns of the effects of a warming climate, drought variation and its impacts have gained much attention in China. Arguments about China's drought persist and little work has utilized agricultural drought survey area to evaluate the impact of natural drought on agriculture. Based on a newly revised self‐calibrating Palmer Drought Severity Index (PDSI) model driven with air‐relative‐humidity‐based two‐source (ARTS) E0 (PDSIARTS; Yan et al., 2014), spatial and temporal variations of drought were analyzed for 1982–2011 in China, which indicates that there was nonsignificant change of drought over this interval but with an extreme drought event happened in 2000–2001. However, using air temperature (Ta)‐based Thornthwaite potential evaporation (EP_Th) and Penman‐Monteith potential evaporation (EP_PM) to drive the PDSI model, their corresponding PDSITh and PDSIPM all gave a significant drying trend for 1982–2011. This suggests that PDSI model was sensitive to EP parameterization in China. Annual drought‐covered area from agriculture survey was initially adopted to evaluate impact of PDSI drought on agriculture in China during 1982–2011. The results indicate that PDSIARTS drought area (defined as PDSIARTS < −0.5) correlated well with the agriculture drought‐covered area and PDSIARTS successfully detected the extreme agriculture drought in 2000–2001 during 1982–2011, i.e., climate factors dominated the interannual changes of agriculture drought area, while PDSITh and PDSIPM drought areas had no relationship with the agriculture drought‐covered area and overestimated the uptrend of agriculture drought This study highlights the importance of coupling PDSI with drought survey data in evaluating the impact of natural drought on agriculture.