The relationship between farm productivity and farm structure has been analyzed focusing mainly on one channel of transmission of this relationship, viz. input-use pattern in rice production. The hypothesized relationship tested in this study is that land inequality influences access to/ use of resources in rice production and in-turn influences productivity. Market imperfections aggravate the negative effect of land inequity on productivity. Results have shown that smallholders’ share in inputs like fertilizers, and irrigation has increased over time, but a large number of smallholders still do not have access to these resources. Study has demonstrated that policies like fertilizer subsidy, agricultural credit, and minimum support prices are able to address market imperfections only partially. Hence, for improving productivity and profitability of rice production of smallholders in particular and other farmers in general, addressing of structural inequity needs attention besides a focus on technology development.