Rice is the largest user of water in Asia, probably accounting for more than half of irrigation water withdrawals. Two key trends in the Asian rice economy that may be affecting water productivity are the rapid spread of pump irrigation and direct seeding. The number of pumps has grown exponentially in Bangladesh and Vietnam, and pump irrigation now dominates gravity irrigation in many countries. Direct seeding accounts for about one-fifth of the rice area in Asia, but this share is increasing. Comparing water productivity values is difficult across space and time; in general, it is more relevant across time. Water productivity has increased over time in several selected systems, primarily due to increased yields of modern varieties and improved management of large-scale water flows. There is less evidence that improved field-level water management has led to increased water productivity, although this may have also contributed. The extent to which agricultural water scarcity will affect poverty in Asia depends crucially on how well societies will be able to create incentives for users to save scarce water, thus facilitating the adoption of new technologies. Because of the rapid spread of pumps, incentives to save water in rice cultivation are growing. Even for gravity-flow surface water, new institutions are developing in China that promise to improve incentives. International trade in agricultural products, or trade in “virtual water,” may also have a role to play and should be encouraged.