The major occupation in Kuttanadu is farming. Rice is the important agricultural product, giving Kuttanadu the monicker of "The Rice Bowl of Kerala". Three crops are grown every year now instead of the traditional two per year. Large farming areas near Vembanad Lake (Vembanadu Kayal) were actually reclaimed from the lake. The king decreed that whoever retains land can own it leading massive redemption of land from the lake. As the farming in the area increased farmers felt themselves constrained by the two cycles a year for rice cultivation. The reason for which is the availability of potable water in Kuttanadu. During the monsoon seasons, the water from the mountains flow through the rivers to the sea, bringing potable water to Kuttanadu. But during summer, due to the low level of the region, seawater enters Kuttanadu and makes the salt content of the water high making it unpotable. During 1968, government of India proposed a project, in which a bundh (Dam) will be made across the river so that seawater will not be allowed to come inside Kuttanad during summer, allowing farmers to cultivate and extra cycle per year. The project was planned in three phases, the south side, the north side and another phase to join the two sections. The project was delayed and by the time the first two phases were complete the entire money allotted for the project ran out and left the final phase in limbo. The farmers who were expecting lots of financial benefits after the completion of the project decided to take matters into their own hands and one night in 1972, a large group of farmers filled the gap between the north and the south side with earth. To this day, the earth embankment between the two sections of the bundh remains.
Eventhough the bund has improved the quality of life of the farmers, the bund is alleged to have caused severe environmental problems. The backwaters which were abundant with fish and part of the staple food of the people of the region require a small amount of salt water for their breeding. The bund has caused deterioration of the catch of fish in the region and the fishermen are opposed to the bund as of 2005. The bund has also disrupted the harmony of the sea with the backwaters and has caused problems not foreseen before the bundh like the omniprescence of the water weeds. Earlier the salt water tends to cleanse the backwaters but this does not happen any more leading to the pollution of the backwaters and the entire land nearby.