Bhutan’s Five-Year Strategic Plan (FYP) guides national development, resource allocation, and food security. Reliable, spatiotemporally explicit agricultural land-use data is essential for tracking progress and enabling policies such as subsidies and tax concessions. This study presents the Farm Action Toolkit (FAcT), an AI-enabled, Earth Observation (EO)-based framework for long-term cropland and paddy monitoring (2002–2024), linking EO data to farmer benefit access and FYP implementation. FAcT delivers Bhutan’s first national, field-scale cropland and paddy dataset, achieving 87–92% accuracy and \(R^2\) values of 0.75-−0.85 against government statistics. Between 2002 and 2024, cropland experienced a 22.5% net increase, with 50.3% gain and 27.8% loss with respect to the 2002 baseline. Of the cropland lost, 66% reverted to forest post-2018, aligning with 12th FYP conservation goals. Net primary productivity declined by 2%, while per-capita cropland area dropped by 16.5%, underscoring population pressure and land competition. In Paro District, approximately 30% of cultivated land verified using EO data was found to be active but missed policy benefits due to gaps in manual verification, revealing critical inclusion barriers. FAcT’s co-development with national agencies ensured scientific rigor and institutional uptake. The open-source toolkit (https://zenodo.org/records/15621464) supports land-use decision-making, resilience planning, and sustainable agriculture in smallholder, high-elevation, and data-scarce contexts. Findings contribute to Sustainable Development Goals (SDGs) 2, 11, and 15, demonstrating how EO-based agricultural monitoring can inform policy interventions and impact tracking in mountainous regions.
