Seventy-seven adaptive research trials were conducted, with the participation of local farmers, on their fields during the 1993 and 1994 wet seasons (southwest monsoon seasons) in the warm subhumid tropical zone on the west coast of India. The objective of the trials was to compare the agronomic and economic benefits of an improved management consisting of placing urea briquettes containing diammonium phosphate (UB–DAP) by hand (56 kg N/ha and 14 kg P/ha) after controlled transplanting using a modified 20×20 cm hill spacing with two other practices: (i) the current management system, consisting of random transplanting and two split applications of prilled urea (PU) and a basal application of single superphosphate (SSP) and (ii) the farmers' traditional management practices, involving random transplanting and broadcasting of fertilizers. In spite of marked variations in rainfall distribution patterns during the 1993 and 1994 seasons, the improved management using UB–DAP increased grain yields by 2·14 t/ha (89%) in 1993 and 1·23 t/ha (45%) in 1994 over traditional management practices and by 1·56 t/ha (52%) in 1993 and 0·83 t/ha (27%) in 1994 over the current management system. These additional yields were obtained at a 28–36% lower plant population density (25 hills/m2v. 35–39 hills/m2). The use of a modified 20×20 cm spacing could reduce by up to 50% the labour normally required for the conventional placement of UB by hand about 1 week after transplanting using the standard 20×20 cm spacing (8–10 workdays/ha). The estimated value: cost ratios for the improved management ranged from 4·9 (1994) to 8·6 (1993) and increased further when the savings in seed input were considered. Stochastic dominance analysis of the yield data suggests that the improved management of UB–DAP could be risk-free and therefore would be preferred over the other two managements by rice farmers and policy makers.