Running across four districts and draining a third of the State of Kedah, Sungai Kedah plays a significant role in the lives of the people. The dominant form of land use in the basin is agriculture (62%). This is followed by forests cover (28%), urban areas (6.6%) and water bodies (3%). Muda Irrigation Scheme, also known as the Rice Bowl of Malaysia, is managed by MADA. 30% of it lies within the Sungai Kedah Basin.

Within Sungai Kedah Basin, there are also irrigation schemes outside of the MADA area managed by DID. A total number of 17 such schemes are found in the 4 districts within the basin. These areas added up to almost 3,500 schemes comes from various sources, including Sungai Kedah tributaries and MADA canals (DID, 2007).

The Pedu, Ahning and Muda dams in the upper catchment of Sungai Padang Terap Basin supply the State of Kedah and some parts of the State of Perlis with water for irrigation, as well as domestic and industrial uses throughout the year. 26% of Sungai Kedah Basin (about 62,000 hectares) comprises of permanent forest reserve in Bukit Perangin, Chebor Besar, Koh Moi, Padang Terap, Pedu and Sungai Badak.

These permanent forest reserves function as water catchment areas. During the rainy season, the catchment areas replenish the rivers and absorb large amount of rain water, thereby minimising risk of flooding. During the dry season, the catchment areas replenish the rivers and provide continuous supply of water.

These forests are habitat of a diversified collection of plant and animal species. This includes the river terrapins which are threatened due to habitat destruction and excessive egg poaching. The river terrapins are protected under the Kedah Terrapin Enactment 1972. The river is also the habitat for fish species such as toman, rohu, belida, jelawat, patin and lampam.