Beyond the grain: a review of multifunctional roles of rice farming in Asia

Abstract

Agriculture is multi-functional in character and provides a number of commodity and non-commodity outputs. Though multifunctionality of agriculture is recognized at the international level, it is yet to translate into policies at the national level. This is mainly due to the absence of comprehensive understanding of the non-commodity outputs associated with agriculture. The non-commodity outputs are in the form of hydrological, bio-diversity, emissions, socio-cultural, etc. Integrating the non-commodity outputs could potentially alter the cost-benefit ratios of agriculture investments and help sustain agriculture in the long run. Multi-functionality of agriculture is not only an efficient way of production (due to the jointness of products) but also helps addressing climate risks making it a policy objective itself. This paper aims to provide an in-depth understanding of multi-functionality and sets the basis for policy making and future research. This is a relatively new area of research that has potential to achieve sustainable agriculture development and also mitigate climate risks. The paper uses a systematic review of existing literature on multi-functionality of rice production systems with a focus on Asia. Availability of research studies are limited, as the research area is at a nascent stage and the review could identify about fifty studies that deal with joint products and multi-functionality after going through more than 100 studies accessed through search engines. Given the importance of rice crop in Asia, the review provides a comprehensive understanding of commodity (rice production and its by-products) as well as non-commodity outputs (hydrological, ecosystem services, socio-cultural, etc.) associated with rice production systems across the Asian countries. The systematic review clearly indicates that rice production systems provide number of non-commodity outputs. When valued in monitory terms by some studies, the non-commodity outputs outweigh commodity outputs in most countries. And the total value of the contribution of the rice systems is substantially higher than that of the value realized by the farmers, i.e., commodity outputs. Thus the contribution of rice-growing farmers in Asia to the national and global green economies is far greater than presently accounted for in the national accounts. Hence, these farming communities need to be compensated for their contribution and needs to be sustained given the social and ecological importance of the contribution.

1 Background

Multi-functionality (MF) is often used as a synonym for ecosystem services (ES), though they differ conceptually. Multi-functionality is the main characteristic of agriculture production, as it produces joint products in all its activities using non-allocable inputs, i.e., producing multiple outputs from the same inputs (OECD, 2001). Most crop systems also produce non-commodity outputs like groundwater recharge, water/air purification, landscape services, etc., using the same inputs. These non-commodity outputs originate from land use and crop practices, resulting in externalities that are positive as well as negative, intended or unintended. Externalities may also result in socio-economic/welfare benefits or dis-benefits at the individual, national, and global levels. Public policy is critical for addressing these externalities, i.e., enhancing the impact of positive externalities or mitigating negative externalities with a focus on public/social goods. This paper adopts the OECD (2001) multifunctionality framework.

Initially, the multi-functionality of agriculture was recognized in the context of international trade and domestic protection policies to safeguard the interests of the farm communities in the developed economies. Multi-functionality of agriculture has gained importance due to its close linkages with the Sustainable Development Goals (UNDP, 2023). Addressing the externalities for sustaining ecosystem services is integral to multi-functionality and sustainable development. This has helped multi-functionality to gain validity, beyond political reasons, in terms of economic rational, environmental sustainability, scientific credibility, and social objectivity. Social objectivity becomes evident when multi-functionality is adopted in the smallholder-dominated agrarian economies, such as those in Asia.

Thus incorporating multi-functionality into economic policy helps addressing three important areas of concern: (i) rationalizing and increasing the allocations toward agriculture by incorporating the value of its environmental services, (ii) achieve sustainable development goals of food security, poverty alleviation, etc., through mitigation/minimizing the negative externalities, and (iii) achieve socially inclusive sustainable development through improving the viability and resilience of small holder farmers in the developing countries (FAO, 2004). In the long run, this can change the terms of trade in favor of agriculture.

1.1 Multi-functionality and ecosystem services

Ecosystem services (ES) are ecological-function based and are often influenced by macro or global environmental changes that could be external to the ecological system. Multifunctionality (MF) of agriculture, on the other hand, is joint production function that is determined by internal or local attributes and policies at the national or sub-regional level. While ES originate from the natural and ecological systems and their interactions with human activities (MEA, 2003), MF looks beyond ecological systems and cover multiple and joint products, including socio-cultural aspects. These joint products and services could have positive or negative impacts. Both ES and MF are closely associated with the concept of ‘externalities'. They are not only impacted by externalities but also cause externalities. OECD defines multi-functionality as a characteristic of an economic activity producing multiple outputs that are commodity or non-commodity (externalities), positive or negative, joint or non-joint (OECD, 2000, p. 14).

1.2 Multi-functionality of rice farming

Rice production systems, being the largest land- and water-based activities in the world, have multi-functional aspects (Figure 1) that need to be taken into account while assessing their overall contribution to the economy. Rice production systems are associated with diverse ecosystem services when compared to other farming systems, such as sugarcane, crop-livestock, or inter-cropping systems (Toriyama et al., 2005). Conceptually multifunctionality of rice production systems differ from ecosystem services, though both are associated with externalities. Multifunctionality and its externalities are endogenous to the production system and mostly human induced. The type and extent of human activities determine the nature of externalities (positive / negative) on a continuous or regular basis. Unlike ecosystem services multi-functionality externalities are location or region specific and with limited time lag in most cases. Multi-functionality, thus, requires activity specific policy interventions in order to sustain the positive impacts. At the same time, scale is an important aspect of multi-functionality or joint products. Uniformity in agronomic practices at scale makes the impacts significant. Though rice production systems in Asia are spread over large areas, farm practices often vary widely, especially among the smallholder farms. Ensuring uniformity in these practices may require institutional support in terms of input use, timeliness, etc. More importantly, institutional support is required in identifying the type and magnitude of non-commodity outputs and determine the incentive packages and their proper enforcement at the ground level i.e., delivery to the individual farmers or communities.

Figure 1

Unlike the majority of crops, there is a variety of rice production systems, including lowland, upland, flooding, floating, saltwater/backwater, rice-pisciculture, aerobic, and the system of rice intensification (SRI). Each system is associated with different non-commodity outputs and their associated externalities. Thus, rice production systems have a unique place in multi-functionality. Though multi-functionality is a subset of ecosystem services, policymakers or even researchers in most developing countries, such as India, are neither aware of nor acknowledge it. Even farmers are not aware of these services, as the benefits are social/public in nature rather than private (Reddy et al., 2025). More importantly, the majority of these services don't have markets, i.e., are not transacted in the normal markets (popularly known as market failure). While the economic value of the multiple commodity outputs (including joint or by-products) is well taken into account (individual to national and global) by farmers as well as policymakers, little attention is paid to the non-commodity outputs (services and their externalities) they provide. Sustaining the multi-functionality of agriculture could be seen as an efficient way of production (due to the joint-ness of products), and hence it can become a policy objective itself (OECD, 2000).

Apart from having a multiplicity of production systems, rice is among the most important food grains produced and consumed in the world. Rice plays a key role in world food security. In terms of area, it is the 3rd largest crop (11 percent of the global cropped area) after wheat and maize, and is the most water-intensive crop among the three. These figures are much higher in the context of Asia, which is a major producer of rice. This indicates the extent and intensity of ecosystem services rice production systems provide and the externalities associated with them in Asia. Besides, its high water-intensive nature produces widespread externalities (non-commodity). The important externalities include: flood control, groundwater recharge from return flows (irrigated paddy), soil conservation, household nutrition (rice-pisciculture), biodiversity, land scape and eco-tourism, water stress due to excess use of water especially in the case of irrigated paddy in uplands, water contamination due to excess use of fertilizers, waterborne (vector) diseases, etc. Besides, rice production systems have strong cultural linkages in most of the Asian countries (Reddy and Rahut, 2023).

1.3 Agro-ecology and rice production systems

Rice is grown in varying agro-ecological conditions across Asia (Table 1). These regions range from warm/arid to warm/humid and warm/cool tropics and sub-tropics (western China). It is grown in flood-prone (eastern India) areas as well as extreme dry (south India) regions. More than 60 percent of rice area is grown under irrigated conditions, and lowland rainfed rice is grown mostly in Cambodia, North-East Thailand, eastern India, Indonesia, and Myanmar (Gadal et al., 2019). Rainfed upland rice is grown in South Asia (South India) and Southeast Asia. Deep water rice is grown in Kerala (South India) and Southeast Asia. While rainfed lowland rice accounts for 31 percent of total rice area, upland rainfed rice is grown in 9 percent of the area. As far as rice productivity is concerned, cool sub-tropics with irrigation provide the highest yields followed by warm and sub-humid sub-tropics, warm arid and semi-arid irrigated ecological zones, warm, cool, and humid sub-tropics (irrigated), and warm and semi-tropics. Except for the warm and semi-tropical zones (irrigated), which are located in India, all other high-productive agro-ecological zones are located in China and Bangladesh (Table 1). These variations are mainly attributed to the differences in irrigation management, technology adoption, etc.

1.3.1 Climate change and rice production systems

Climate change is impacting agriculture in general and rice farming in particular. The most conspicuous impact of climate change on rice production is through changes in water resources. It is estimated that decrease in precipitation and increase in temperature would reduce the availability of water for rice cultivation. Climate change is forcing farmers to change cropping pattern and is likely to alter the soil nutrient balance (Toriyama et al., 2005, p. 562). While climate change is definitely impacting rice production systems, rice production systems also contribute to mitigating or minimizing the climate risks.

Expansive paddy fields filled with water reduce the temperatures and increases humidity and hence checks extreme weather conditions help improve micro environment and hygiene conditions at the village/community level. In tropical regions, air in wetland areas is often several degrees cooler than in nearby non wetland areas because of the heat absorbed in evaporative cooling processes (Rusinamhodzi, 2020). Rice fields are considered as artificial wetlands and are ideal for diverse biological organisms given their semi-aquatic nature. They provide ideal ground for shelter, food, breeding, and nesting habitat. The biological diversity is influenced by moisture and nutrient gradients within the rice fields. These include: invertebrates, including arthropods, crustaceans, microcrustaceans, molluscs, and nematodes, inhabiting the vegetation, and water dominate the fauna in rice soil habitats (Matsuno et al., 2006 and Rusinamhodzi, 2020).

Studies have shown that multi-functional and joint or co-production nature of rice production systems could effectively reduce the climate impacts. These include, for instance, crop-livestock systems (Lemaire et al., 2014), integrated rice-aquatic / fish production systems (Zhang et al., 2023) and rice-duck farming (Elly et al., 2019; Du et al., 2023; Sayed et al., 2025). These co-production systems reduces the use of chemical fertilizers by 57 percent and herbicides by 50 percent, saves on costs and increases the farm income (Sayed et al., 2025). Further, they enhance the nutrition value of the farmers food basket apart from improving the soil quality.

1.3.2 Objectives

The primary purpose of this review is to provide a comprehensive account of the status of research on the multi-functionality of rice production systems across Asian countries. Specific objectives include: (i) critically review the coverage of non-commodity outputs, i.e., positive and negative externalities; (ii) examine the various approaches adopted to assess the externalities, and (iii) identify the research gaps in multi-functionality research. Given that multi-functionality research is at a nascent stage in most of the Asian countries, this review aims to provide the background and basis for future research, empirical as well as policy. In order to provide an in-depth understanding of multi-functionality, the scope of the review is restricted to rice production systems, which account for a substantial proportion of land and water resources use in the region.

2 Conceptual approach

Given the broad objectives and scope, the present review aims to cover various dimensions of the multi-functionality of rice production in general and with a special focus on Asia. In the process the current review covered a large body of literature, including published, unpublished (gray literature), and online material.

2.1 Review design and protocol

This paper adopted a comprehensive systematic review approach. The review design was content based using a key term search followed by cross referencing. Studies that are dealing directly with multi-functionality aspects are included. The coverage of studies ranged from conceptual and theoretical to applied, methodological and policy related issues. Both quantitative and qualitative studies are included in the review, though preference was given to quantitative studies using scientific approach. Majority of the research studies reviewed are peer reviewed and published that include research publications of international organizations like OECD, FAO, IRRI, ADB, the World Bank, etc., and research papers published in peer-reviewed journals by academics and researchers. Further, online material like blog posts, reviews, real-time data, and other information available in various public domain sources from the world-wide web.

Online search engines, such as the World Wide Web, Google Scholar, Science Direct, Scopus, and Research Gate, are used to access the majority of the studies. Key words or phrases like multi-functionality agriculture/paddy/rice production, ecosystem services, sustainable agriculture, food security, environmental aspects of agriculture/rice, environmental impact assessment, rice production systems, life-cycle assessment of agriculture/rice production, ‘social cost-benefit analysis, etc (Figures 2, 3)¹. The review covered three decades i.e., 1995–2025 of research across the world. More studies are added based on cross-referencing from the available studies. In the process more than 100 studies and about 50 studies are identified as more relevant for the review. Though the review covers various countries across the world, the primary focus is on Asian countries, including China, India, Japan, Taiwan, Thailand, South Korea, Indonesia, Pakistan, Nepal, Thailand, Philippines, Bangladesh, Sri Lanka, Cambodia, Vietnam, Laos PDR, Bhutan, Myanmar, etc. Given the recent origin of multi-functionality of agricultural production, most of the studies included in the review are from the late 1990s onwards and up 2025 (covering three decades).

Figure 2

Figure 3

The literature review aims at providing a basis for future empirical studies in the area of multifunctionality of rice production systems in Asia. Therefore, the review takes into account the quantitative and qualitative aspects of multifunctionality as it includes economic, environmental, and social aspects of the production process. This requires understanding the economic, environmental, and social dimensions of the production process and production relations. As multifunctionality includes multiple commodity and non-commodity outputs (services), the first concern of the review is to scope all the ecosystem services during the life cycle of rice production. Further, identifying the externalities and trade-offs associated with the ecosystem services gives rise to second-level impacts of the production process. Reviewing the available frameworks, methodologies, and tools for identifying and assessing the impacts, especially externalities-related impacts, is critical to find the appropriate tools and methods for an integrated cost–benefit analysis of the production process. A critical review of environmental economics methodologies helps reveal appropriate tools for placing a monetary value on the non-commodity outputs and the associated externalities. Incorporating the value of externalities further helps policy makers assess the real and net contribution of the production system to the economy (in terms of GDP) and the policy support needed for rice production across regions, including its implications for policy reform and trade liberalization (OECD, 2001). Identifying and addressing the negative externalities is a policy challenge.

3 Resource use, commodity, and non-commodity outputs

Rice production systems are among the largest users of land and water resources in Asia. Rice is grown in more than 133 million hectares in Asia, of which 55 percent is fully irrigated. Depending on the agro-climatic/bio-physical conditions, the duration of the rice crop water requirement ranges between 720 and 2160 mm, from transplanting to harvesting, in the case of long-duration varieties (130 days crop). In the case of short duration varieties (100 days), the requirement ranges between 540 and 1620 mm. Besides, an additional 300–700 mm is required for land preparation (Greenland, 1997). Water requirement also varies between wet and dry season rice cultivation. During the dry season, water requirement could be as high as 5,000 mm. In the wet season, it ranges from zero to 3,000 mm, depending on the quantity and distribution of rainfall during the season.

The advent of the green revolution has led to input-intensive farm practices, especially nitrogen, as well as pesticides. The high intensity of nitrogen application in rice production at the farm level seems to be highly misplaced, as research has shown that substantial rice yields can be obtained without the use of nitrogen fertilizers due to its high ability of biological nitrogen fixation (BNF). It is estimated that rice cultivation contributes about 40 kg N per ha. per season from BNF, irrigation water, and atmospheric deposition (Ladha et al., 2016). It is estimated that rice production targets for the year 2030 in China can be achieved by reducing nitrogen consumption by 10–27 percent (Cai et al., 2023). This is mainly due to the soil conditions under flooding, which drive biological nutrient cycling in rice production (Chivenge et al., 2020).

Thus, irrigated rice growing soils (flooding) have a number of additional characteristics when compared to upland crop soils. These are positive as well as negative in nature. Positive characters include: (i) higher natural supply of nitrogen, bases and silica along with higher availability of soil phosphorus, (ii) relative indifference to soil physical properties; (iii) detoxification of excessive nutrients and agrochemicals; (iv) resistance to soil erosion; (v) ease of weeding; (vi) tolerance for monoculture; and (vii) carbon sequestration (Kyuma, 2004). These factors contribute to land productivity. Besides, the natural features of rice fields (leveling and bunding) also help in checking soil erosion from floods, reducing flood intensity, etc. Together, they make rice production systems the most stable food systems in the world (Kyuma, 2005). On the negative side, rice systems generate 6–11 percent of annual methane emissions globally of which 78 percent is contributed by five Asian countries of China, India, Bangladesh, Vietnam, and Thailand (IPCC, 2023; Chen et al., 2025). Excessive application of fertilizers also causes air and water pollution. As a result, rice production systems are the largest nonpoint source of pollution. The standing water in rice fields is also a major source of waterborne and vector-borne diseases in most tropical countries. However, emissions vary among irrigated, rainfed, and alternate wet and dry rice systems. Irrigated rice systems account for a substantial share. Recent shifts in the rice systems toward less water intensive methods like system of rice intensification (SRI) could be the reason for decline in the methane emissions (Li et al., 2021), These are only a few of the externalities associated with rice production, and a comprehensive account will be provided later.

Climate change is adding to the woes of agriculture in general and rice farming in particular. Climate change is impacting agriculture through changes in precipitation, intensity, and distribution of rainfall. Delayed monsoon is forcing farmers to change cropping patterns, increasing the frequency of droughts, and increasing the incidence of pests and diseases etc. The most conspicuous impact of climate change on rice production is through changes in water resources. It is estimated that precipitation will decrease in the subtropics, and extreme events may become more frequent (IPCC, 2005). This would reduce the availability of water for rice cultivation and requires concrete efforts toward water conservation and improving water use efficiency. Climate change is likely to alter the soil nutrient balance (Toriyama et al., 2005, p. 562). Though climate change will have a marginal negative impact on food production in the Asia Pacific region by 2030 and 2050, it will have a greater impact on per capita food consumption and hunger (Wiebe et al., 2019). While climate change is definitely impacting rice production systems, rice production systems can also contribute to mitigating or minimizing the climate risks. These aspects will be discussed in detail in the following sections.

3.1 Commodity outputs

Commodity outputs are broadly categorized as food, feed, fiber, fuel, etc. However, the acceptability of the products for specific consumption purposes and their availability vary across regions. For instance, rice straw is widely used as animal feed in South India, while it is not so in North India. In fact, straw is burnt in the fields in some of the northern Indian states and other Asian countries. Similarly, rice fields are used for producing other crops, animals, fish, etc., in some regions. Food production is the most important commodity output, which is the basis for sustaining the rice production systems. Apart from direct consumption, rice is processed into a number of products that are widely consumed. The share of these processed foods is on the rise, even in rural areas, in recent years. Rice straw and husk are used as animal feed in many regions. Straw is use to cover the roofs of thatched houses in rural areas of South India and is also used as animal beds in many parts of Asia. Straw is also used in paper making. Straw is often incorporated into soils either directly or by burning. While direct incorporation is energy-intensive, burning causes air pollution. It is also used for energy production through combustion or anaerobic digestion to produce biogas.

The processing of paddy for table rice gives husk and bran. Husk is converted into briquettes or pellets or burned directly and is used as a combustion energy source for small-scale steam engines, rice mills, and paddy drying (Nguyen et al., 2012). While husk is a good non-conductor of heat, bran is highly nutritious with high levels of antioxidants and low fat content (15 percent). Husk is used in ice factories to check melting and in brick kennels for burning. Traditionally, bran is used as animal feed by farmers. Rice bran also provides a lot of health benefits in the form of antioxidants. Of late, rice bran oil is being extracted from bran, which is a high-value cooking oil, though significant benefits are lost during rice-bran oil processing (Juliano, 2005).

Traditionally, livestock has been an integral component of farming systems in Asia. Draft animals, in particular, play a vital role by assisting in key agricultural activities such as plowing, puddling, and harvesting of rice fields. In addition to providing valuable manure that enhances soil fertility, livestock also utilize agricultural by-products such as grazing on rice straw, foraging in nearby fields, and being fed rice bran. They are often maintained as breeding stock, contributing to the sustainability of farm operations. In tropical Asia, smallholder rice farmers commonly keep at least one water buffalo for both labor and livelihood support. In China, most farming households raise pigs, chickens, and other animals, serving multiple purposes including food production, income generation, and manure supply.

Water buffalos are used as working animals, for milk and meat. Pig and chicken manure are highly valuable in rice farming, especially in China (Greenland, 1997). In some regions, ducks are introduced into floating rice fields after harvest, contributing to ecosystem balance by enhancing oxygenation and minimizing soil erosion. These livestock offer significant economic value and serve as a critical drought adaptation strategy, as farmers often rely on livestock sales to cope during severe drought years. However, the increasing adoption of farm machinery has led to a gradual decline in the role of livestock in agriculture. Rising feed costs, water scarcity, and labor challenges have further reduced the economic viability of maintaining livestock. Consequently, the benefits of integrated farming systems and sustainable agricultural practices are increasingly being lost.

3.2 Rice-fish systems

Fish farming in rice production systems is the most common activity in many East Asian countries. Fish being an important source of protein in these countries, farmers have shifted to the combination of fish culture with rice after the natural sources of fish (streams, ponds, rivers, etc) are failing to meet the increasing demand. In most of these countries, fish culture is quite successful in terms of providing additional food and income to the farmers. The joint system has a lot of potential in terms of economic gains to farmers and mitigating the environmental impacts, such as methane emissions and soil degradation. It is estimated that rice-fish systems yield 50 percent higher net returns in Bangladesh and 27 percent higher net returns in Indonesia when compared to a monoculture of rice (Mansharamani et al., 2020). As a result, the area under these joint systems is expanding in most countries, especially China (Greenland, 1997). At present, China has 1.11 million ha. under rice-crayfish culture farming (Xu et al., 2021). India, however, is yet to take up this activity on a big scale, though it has good potential. India has a potential of 20 million hectares, but only 0.23 million hectares is currently under rice-fish culture. The floating rice fields are also potential places for the combination of rice-fish culture.

The rice-fish systems appear to be performing better in terms of both commodity and non-commodity outputs compared to rice-only systems. It was observed that in Bangladesh and Indonesia, rice-fish systems not only provide higher yields and net returns but also reduce greenhouse gases (Mansharamani et al., 2020). A study of three regions in Thailand found that rice–fish co-culture generated higher average economic values by 25.4 percent compared to rice monoculture farming. Rice–fish co-culture thus provides more economic and ecological benefits compared to the rice monoculture systems (Arunrat and Sereenonchai, 2022). In China, rice-fish production systems provide 37.9 percent higher income when compared to rice monoculture. The value of commodity outputs is 2.31 times higher in the case of rice-fish commodity outputs (Liu et al., 2020).

3.3 Non-commodity outputs/services

Rice production systems and non-commodity services are interdependent. While commodity outputs generate non-commodity outputs and services, the latter play a critical role in amplifying the commodity outputs. Besides, non-commodity outputs and services, along with their associated externalities, contribute immensely to the overall environmental upkeep and sustainable development. The extent, magnitude, and value of these positive and negative externalities are linked to anthropogenic pressure and human-led management practices. It is observed that food production systems account for 60 percent of biodiversity loss, 24 percent of greenhouse gas emissions, 33 percent of soil degradation, and 61 percent of commercial fish stock depletion. Addressing these concerns and moving toward more sustainable production systems that can ensure food and nutrition security for the growing populations and protect the natural systems for the benefit of future generations is a leading policy challenge (Rusinamhodzi, 2020, p. 45).

In China, conversion to rice–crayfish co-culture increases the net value of ecosystem services by 145.3–176.9 percent (Xu et al., 2021). It is assessed that the value of ecosystem services of rice-fish systems is 35.72 percent higher than that of rice monoculture. It is 4.78 times larger than commodity outputs from crop land and slightly lower than the value of ecosystem services from the wetlands (Liu et al., 2021). Rice-fish systems are also observed to be environmentally more friendly when compared to rice monoculture in China as well as in the Mekong basin area. It was observed that rice-fish systems increased invertebrate predator abundance by 19.48 percent and hence reduced the need for pesticide by 23.4 percent. The rice-fish system produced an average economic value that is 10.33 percent higher than in the rice monoculture (Wan et al., 2019). This is true for both traditional rice-fish systems as well as more input-intensive modern rice-fish systems (Hu et al., 2016). In addition, rice-fish co-culture enhanced both soil and rice quality (Wan et al., 2019). In the Mekong basin, it was observed that despite the reduced use of pesticides, there was no decline in yields (Berg et al., 2017). Thus, it is clear that rice-fish production systems can contribute positively to sustainable food/rice systems. In what follows, the important positive and negative externalities associated with non-commodity outputs are presented.

3.4 Positive externalities

The most important positive externalities associated with rice production systems and rice-fish production systems are presented in Table 2. Studies have shown that rice fields are valued highly for their non-commodity outputs and services. These non-commodity outputs/services could be purely multi-functional externalities or ecosystem services externalities or a combination of both. For instance, farmers in Taiwan value water preservation, land protection functions, benefits of environmental conservation, recreation and landscape, cultural heritage, and social value of rice production systems more than the commodity outputs, i.e., rice (Chang and Ying, 2005; Chiueh and Chen, 2008; Chiueh, 2012). A study of Japan observed that rice production systems carry high biodiversity value, as more than 5000 species are housed in rice fields and the surrounding environment. However, modernization of rice cultivation and the decline of rice cultivation could adversely affect the overall biodiversity in Japan (Natuhara, 2013). It may be noted that some of externalities that are associated with ecosystem functions like micro-environment may not translate into measurable welfare effects.

3.5 Negative externalities

Most of the negative externalities are associated with methane and other greenhouse gas emissions, water contamination, soil degradation, etc (Table 3). Rice production systems are among the largest contributors of greenhouse gases. A systematic assessment of methane emissions from agriculture in China observed that methane emissions rose from 16.37 Tg yr⁻¹ in 1990 to 19.31 Tg yr⁻¹ in 2006, with an average annual increase of 1.04 percent. Between 1990 and 2006, emissions from rice production declined while they increased in livestock systems. As a result, the spatial distribution of emissions shifted from southern parts (rice growing) to northern, north-eastern, and north-western provinces (livestock-centric) (Fu and Yu, 2010). It is estimated that the carbon footprint for land use varies between 4.54 ± 0.44 t CO₂-eq./ha for early rice, 6.84 ± 0.79 t CO₂-eq./ha for single rice, and 8.72 ± 0.54 t CO₂-eq./ha for late rice. Emissions are lower for early rice when compared to other systems. While the emissions from nitrogen fertilizer use accounted for 33 percent of the total carbon footprint, direct CH4 emissions account for 57 percent. The carbon footprint of double rice cropping under an aggregated farm is about 0.86 ± 0.11 t CO₂-eq./t grain when compared to 1.14 ± 0.25 t CO₂-eq./t grain under a household farm, i.e., 25 percent lower. This is mainly due to high nitrogen use efficiency and low methane emissions. Interestingly, a negative correlation between rice yields and carbon intensity was observed, indicating a decline in GHG emissions with increased grain yield. This is possible due to better farm management practices (Yan et al., 2015).

Rice-fish farms also face negative externalities in terms of health and lower yields due to the use of pesticides on the rice crop. In the Can Tho and Tien Giang provinces of Vietnam, four different systems are used, namely, rice system with high pesticide use (RHP), rice system with low pesticide use (RLP), rice-fish system with high pesticide use (RFHP), and rice-fish system with low pesticide use (RFLP). While 80 percent of the HP farmers use pesticides to control pests, more than 80 percent of the LP farmers use integrated pest management strategies. It was observed that 85 percent of the farmers experienced health impacts, and fish yields declined over the past 3 years in 80 percent of the farmers' cases due to pesticides. Besides, high pesticide-intensive farmers (RFHP) experienced lower fish survival, fish yields, and rice yields compared to LP intensive farmers (RFLP). There is a positive correlation between fish survival and rice yields. Among the four groups, RFLP farmers had the highest income, while RFHP farmers had the lowest income (Berg and Tam, 2018).

Listing of these externalities is based on theoretical and conceptual understanding of the rice production processes. However, these externalities do not include the linkages and trade-offs with related sectors. For instance, rice production is critically linked with the irrigation or water sector, the fertilizer sector, the energy sector, etc. While using these complementary resources, the process of production, transfer, etc., generates further externalities, such as the development of water infrastructure, which may result in the loss of forest lands and biodiversity, and the production and transportation of fertilizers may cause severe damage to the environment and natural resources. In order to have a complete view of the linkages and their associated externalities, one needs to have a comprehensive framework. Though sustainable development is often referred to as the overarching framework in all the conceptual studies (OECD, 2000, 2001; FAO, 2004), how to adopt it in an analytical and empirical setting is not given due attention. Understanding the inter-sectoral linkages and trade-offs is important for assessing the ability of the farm sector to enhance the resilience of a national economy. These linkages help the free flow of resources toward the primary sector when other sectors are contracting due to macro-economic shocks (FAO, 2004).

4 Measuring non-commodity outputs (externalities)

The number of methods and tools, along with the frameworks, has evolved over the past three decades for valuing the externalities associated with environmental goods and services. Some of these methods are data-intensive, and some demand sophisticated statistical or econometric analysis. Most of these methodologies have been adopted for assessing the multi-functionality of rice production systems as well as rice-fish production systems (Table 4). CVM, along with economic valuation methods, appears to be more widely used. CVM is used for estimating the willingness to pay for the multi-functionality of rice / rice-fish systems. Economic valuation methods using farm management data have been adopted to assess the impacts of multi-functional roles and comparative benefit assessments of rice monoculture and rice-fish co-culture production systems. Interestingly, the most complex life-cycle assessment is also used to assess the ecosystem services, including greenhouse gases, associated with rice production systems as well as straw management. Indirect methods like loss of production, replacement costs, and travel cost methods are used for assessing biodiversity, etc. Of these methods, CVM is more flexible and can be used to cover most multi-functional roles of rice production systems when compared to other indirect methods. One advantage of CVM is that it provides both qualitative and quantitative assessment, as it helps infer the perception of the respondents pertaining to a particular service.

It is amply clear that rice production systems provide much more than they contribute to commodity outputs, food security, etc. Its contribution of non-commodity outputs, if valued, amounts to multiple times that of commodity outputs across the Asian countries (Table 5). Among the Asian countries, only the three non-commodity outputs (flood prevention, groundwater recharge, and soil erosion) are valued at US$43,744 million as against the commodity output (rice production) value of US$1,430 million. This is despite the fact that 10 out of the 17 countries (included here) have higher commodity outputs when compared to non-commodity output values (Table 5). Except for Korea, all the major rice-producing countries (Japan, China, India, Pakistan, Philippines, and Thailand) have higher non-commodity output values. Japan accounts for 65 percent of the total non-commodity output value in Asia, followed by China (9 percent), India (7.5 percent), etc., (Table 5). Among the three non-commodity outputs, flood prevention accounts for 74 percent of the non-commodity value, followed by groundwater recharge (22 percent) and soil erosion (4 percent).

It is estimated that the multi-functional contribution of these human-made wetlands is much higher than the rice production itself in the Republic of Korea (Yoon, 2009). In light of the declining area under rice in Korea, it is argued that these artificial wetlands need to be sustained in order to protect the ecosystems and their numerous services. A comprehensive study of 10 rice varieties in six rice regions of China identified the most important ecosystem services, including primary production, gas regulation, nitrogen transformation, soil organic matter accumulation, and water regulation and flood control. The economic value of these ecosystem services, excluding primary production, was estimated at 74–89 percent of the total value of ecosystem services, i.e., non-commodity outputs provide 7–8 times more value when compared to rice production value. It was observed that the value of ecosystem services was higher when nitrogen fertilizer was applied in the range of 275 to 297 kg per hectare (Xiao et al., 2012).

Rice production systems provide both positive and negative climate mitigation services. Rice production systems are considered as biodiversity hot spots, housing, and nurturing numerous species. Protecting these systems could provide invaluable environmental services in the long run. Of late, modernization of irrigation systems like canal lining is adversely affecting the biodiversity in the systems, and hence, infrastructure development needs to be adopted to meet biodiversity requirements (Matsuno et al., 2006). At the same time, the promotion of rice-fish co-culture systems appears to be promising for sustaining and enhancing biodiversity. Recent studies have clearly shown that rice-fish co-cultures have great potential in increasing the economic viability as well as ecosystem services. Although rice-fish systems address multiple SDGs (zero hunger, climate action, and life under water), coupled with good economic potential, the spread of these co-culture systems has been limited. These systems need to be promoted systematically. Studies have suggested innovation in irrigation systems to address floods and drought situations, improved quality and quantity of fish seedlings for improved fish survival after leaving them in rice fields, new technologies for pest and disease control, etc., are critical for promoting these systems (Arunrat and Sereenonchai, 2022).

4.5 Limitations

Assessing the magnitude of the bio-physical changes like micro environment, air and water purification is difficult as the impacts are not uniform across the agroecological systems. While number of externalities are identified it is difficult to identify and assess all of them, as some of them like soil improvements, GHG emissions, etc., are long term in nature. It may be noted that valuation estimates are neither accurate nor comparable across locations and time periods. These estimates often use different methodologies, base year prices, spatial scales, and definitions. Making price adjustments are also difficult due to the involvement commodity and non-commodity outputs. Further, hither to only three types of non-commodity outputs have been considered for calculating the monetary values. While there are number of non-commodity outputs that need to be included, some of the ecosystem services like micro-climate, socio-cultural impacts, etc., are difficult to convert into value terms. As a result, the policy relevance of these estimates are limited. Integrating values of non-commodity outputs into main stream economic system has been a slow process, especially among the developing countries. These are some of the limitations that need to be kept in view when comparing the monetary values across situations.

5 Research gaps and future directions

The review of research on the multi-functionality of rice production systems in Asia provides useful insights into the multi-functionality of rice systems in Asian countries and helps identify the gaps at different levels. The review provided a clear direction for incorporating the non-commodity outputs of rice production systems. Integrating these outputs into green accounting would enhance the contribution of rice production systems to the economy and emphasizes the need for increased allocations to agriculture. At the same time incentive structures need to be put in place in the form of payments for environmental services to the farming communities. This calls for more systematic research addressing the research gaps. Some of the important research gaps include:

• i) Geographically, South Asia has not received due attention on the multi-functionality of rice production research and debate. Even in countries like India, which has the largest area under rice, research on multi-functionality is yet to start in a systematic way.

• ii) Even within East Asia and the Pacific, only a few countries, such as China, Japan, Taiwan, and Korea, have received more attention. This may be because some of these countries are experiencing a substantial decline in the area under rice cultivation.

• iii) Cross-country comparative studies are not available. Given the differences in terms of multi-functionality research advancement across Asian countries, it would be useful to initiate comparative studies to draw lessons from some of the advanced countries.

• iv) Very few studies have attempted to put monetary values on the benefits and costs. There are substantial methodological gaps in the valuation procedures. Similarly, scoping of non-commodity outputs that include ecosystem services need to be consistent across the counties. Consistency in the approach and methodologies improves the comparability of estimates. In the absence of such a comprehensive and consistent evaluation policy policymakers may not be in a position to make any informed policy choices.

• v) More systematic research is required to bridge the gap between research and policy. This calls for studies covering more regions and also long-term studies. Integrated studies adopting multi-disciplinary and trans-disciplinary approaches need to be initiated at the regional level in order to address the gap systematically.

• vi) Research pertaining to the multi-functionality of rice-fish co-cultures appears to be a high pay-off, as evidenced by some studies. However, more rigorous research looking at the positive as well as negative externalities, sociocultural aspects, etc, needs to be carried out in order to promote rice-fish farming on a large scale.

• vii) Another important gap is regarding the absence of policy research. That is, future research studies need to be designed to integrate policy requirements for smoother uptake by policymakers.

5.1 Future direction

The present review provides enough evidence to formulate some testable propositions emerging from the literature that need to be tested across regions. Important ones include:

• a) Rice production systems provide a greater number of non-commodity outputs/services than commodity outputs.

• b) The value of non-commodity outputs outweighs commodity outputs by many fold.

• c) The positive externalities associated with non-commodity outputs are likely to outweigh the negative externalities.

• d) Commodity as well as non-commodity outputs can be further enhanced through new cultivation practices like rice-fish co-culture systems.

• e) Net benefits from multi-functionality can be further enhanced through the adoption of appropriate mechanisms to enhance positive externalities and mitigate/minimize negative externalities.

• f) While there is enough evidence in the east Asian region, south Asia is lagging behind. In the case of east Asia there is enough evidence to support payments for environmental services. This, however, needs to be systematically collated to design the incentive mechanisms. In the case of south Asia more research is required to establish the value of non-commodity outputs of the rice production systems.

Thus, formulating regional and comparative research studies is an important next step toward establishing the multi-functionality of rice production systems in Asia and sustaining these systems to ensure sustainable development. The emphasis of future research should be comprehensive (covering all aspects of multi-functionality) and integrated, involving multi-disciplinary/trans-disciplinary approaches.

6 Conclusions

This paper provides a systematic and comprehensive review of multi-functionality of rice production systems and formulates a basis for future research in this frontier area. The review highlights the importance and likely magnitude of non-commodity outputs and the need for their integration at the policy level. The review comes up with propositions that pave the way for future research. In the process the review also identifies frameworks, methodologies, and tools for testing these hypotheses across regions and countries. Thus, carrying out regional and comparative studies is an important next step toward establishing the multifunctionality of rice production systems in Asia and sustaining these systems for sustainable development. Future research should emphasize comprehensive (covering all aspects of multifunctionality) and integrated (involving multidisciplinary and transdisciplinary approaches) studies.

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