Agriculture is the most important economic activity in Nagaland, with more than 90% of the population employed in agriculture. Crops include rice, corn, millets, pulses, tobacco, oilseeds, sugarcane, potatoes, and threads. However, Nagaland still depends on the import of food supplies from other states.
The widespread practice of jhum, tilling, has led to soil erosion and loss of fertility, particularly in the eastern districts. Only the Angami and Chakhesang tribes in the Kohima and Phek districts use terracing techniques. And most of the Aos, Lothas, and Zeliangs in Mokokchung, Wokha, and Peren districts respectively till in the many valleys of the district. Forestry is also an important source of income. Cottage industries such as weaving, woodwork, and pottery are also an important source of revenue. Tourism is important, but largely limited due to insurgency since the last five decades. Nagaland’s gross state domestic product for 2004 is estimated at $1.4 billion in current prices.