This study determines how production and trade policy distortions affected rice productivity in thirty-three rice-producing countries. A rice-productivity index for each country is constructed, and a model linking the productivity gap with policy distortions is presented. After controlling for the differences in infrastructure, openness, and human capital, this article shows that high subsidies and protection in developed countries combined with taxation of rice farming in poor countries have widened the gap in rice productivity between rich and poor rice countries.