Birbhum is primarily an agricultural district with around 75% of the people dependent on agriculture. While 159.3 km (61.5 sq mi) of land is occupied by forests, 3,329.05 km (1,285.35 sq mi) of land is used for agricultural purposes. 91.02% of the population live in villages. Major crops produced in the district include rice, legumes, wheat, corn (maize), potatoes and sugar cane. The district has thirteen cold storages. Land with irrigation facilities in 2001-02 totalled 2,763.9 km (1,067.1 sq mi). There are five barrages, providing irrigation support. Canada Dam on the Mayurakshi river at Massanjore lies close to the border of Birbhum and the Dumka district in Jharkhand. Further down the Mayurakshi is the Tilpara Barrage at Suri.
Birbhum is a major centre of cottage industries. Perhaps the most notable cottage industry here is a non-profit rural organization named Amar Kutir. Other main industries in Birbhum are agriculture-based industries, textiles, forestry, arts and crafts. Sriniketan is noted for its dairy industry and as a forestry centre. Some of the notable forms of cottage industries of Birbhum include textile—especially cotton and locally harvested tussar silk, jute works, batik, kantha stitch, macramé (weaving by knotting threads), leather, pottery and terracotta, solapith, woodcarving, bamboo and cane craft, metal works and various tribal crafts. There are 8,883 small and medium scale industries. Principal industries of the district include cotton and silk harvesting and weaving, rice and oilseed milling, lac harvesting, and metalware and pottery manufacture. Bakreshwar Thermal Power Station (210 MW x 3 + 210 MW x 2 under construction) is the only heavy industry in the district.
In 2006 the Ministry of Panchayati Raj named Birbhum one of the country's 250 most backward districts (out of a total of 640). It is one of the eleven districts in West Bengal currently receiving funds from the Backward Regions Grant Fund Programme (BRGF)
