<PAGE>



                    SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549


                                FORM 10-Q


             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934


              For the three months ended September 30, 1995


                     Commission File Number 0-17039


                            American Rice, Inc.
           (Exact Name of Registrant as Specified in its Charter)



           Texas                                76-0231626
(State or other Jurisdiction of     (I.R.S. Employer Identification No.)
Incorporation or Organization)



       16825 Northchase, Suite 1600
             Houston, Texas                            77060
 (Address of Principal Executive Offices)           (Zip Code)


                            (713) 873-8800
                     Registrant's Telephone Number,
                          Including Area Code



Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by section 13 or 15 (d) of the Securities Exchange 
Act of 1934 during the preceding 12 months (or for such shorter period 
that the registrant was required to file such reports), and (2) has been 
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

The number of shares outstanding of the registrant's common stock, 
$1 par value, as of November 10, 1995 is 2,443,706 shares
<PAGE>

PART 1 - FINANCIAL INFORMATION
Item 1.  Financial Statements


                     AMERICAN RICE, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Thousands of Dollars)
                                 (Unaudited)

                                    Three Months         Six Months
                                Ended September 30,  Ended September 30,
                                   1995      1994      1995      1994
                                ----------------------------------------

Net sales                         $90,369   $78,314  $176,761  $184,020

Cost of sales                      80,652    69,264   157,507   163,647
                                ----------------------------------------
    Gross profit                    9,717     9,050    19,254    20,373

Selling, general and
  administrative expenses           6,074     5,609    11,845    10,881
                                ----------------------------------------
    Operating income                3,643     3,441     7,409     9,492

Interest expense                    4,204     3,071     7,602     5,969
Interest income                      (353)     (179)     (528)     (350)
Minority interest                    (111)      (65)     (246)       (4)
Other income and expense               60        85       151       158
                                ----------------------------------------
Earnings (loss) before
  income taxes                       (157)      529       430     3,719

Provision for 
  income taxes (benefit)              (56)      197       155     1,377
                                ----------------------------------------
    Net earnings (loss)             $(101)     $332      $275    $2,342
                                ========================================
Preferred stock dividend
  requirements                      1,483     1,483     2,965     2,965
                                ----------------------------------------
Net loss applicable
  to common stock                 ($1,584)  ($1,151)  ($2,690)    ($623)
                                ========================================
Loss per applicable
  common and common equivalent
  share (Note 4):

  Primary                           ($.65)    ($.47)   ($1.10)    ($.25)
                                ========================================
  Fully diluted                     ($.65)    ($.47)   ($1.10)    ($.25)
                                ========================================

See Notes to Consolidated Financial Statements
Page 1<PAGE>



               AMERICAN RICE, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                     (Thousands of Dollars)

                                             September 30,  March 31,
                                                   1995      1995
                                                --------------------
ASSETS                                          (Unaudited)

Current assets:
  Cash and cash equivalents                        $1,903    $1,864
  Accounts receivable, net                         30,499    33,423
  Inventories
    Finished goods                                 24,854    17,108
    Raw materials                                  31,135    33,097
  Prepaid expenses                                  1,360       793
  Deferred income taxes                             3,507     3,451
                                                --------------------
    Total current assets                           93,258    89,736


Net assets of Houston properties held for sale     18,767    18,767
Other assets                                       20,038    15,710
Receivable from ERLY                               23,070    11,901
Property, plant and equipment, net                 42,278    41,386
                                                --------------------
  Total assets                                   $197,411  $177,500
                                                ====================

Continued on next page

See Notes to Consolidated Financial Statements
Page 2<PAGE>

               AMERICAN RICE, INC. AND SUBSIDIARIES
             CONSOLIDATED BALANCE SHEETS (CONTINUED)
                     (Thousands of Dollars)

                                              September 30,  March 31,
                                                   1995      1995
                                                --------------------
                                                (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Notes payable                                   $17,030   $33,937
  Accounts payable and accrued expenses            33,222    34,372
  Income taxes payable to ERLY                        -       1,037
  Current portion of long-term debt                   -       6,727
                                                --------------------
    Total current liabilities                      50,252    76,073

Long-term debt                                     94,056    48,573
Deferred income taxes                               8,616     8,616
Minority interest                                     -          26
Stockholders' equity (Note 3):
  Preferred stock, $1.00 par value; 4,000,000
    shares authorized;
    Series A- 777,777 convertible shares issued
      and outstanding, liquidation preference
      of $19,989                                      778       778
    Series B- 2,800,000 convertible shares issued
      and outstanding, liquidation preference
      of $14,000                                    2,800     2,800
    Series C- 300,000 shares issued
      and outstanding, liquidation preference
      of $1,500                                       300       300
  Common stock, $1.00 par value; 10,000,000
    shares authorized; 2,443,892 shares
    issued and outstanding                          2,444     2,444
  Paid-in capital                                  25,286    25,286
  Retained earnings                                13,627    13,352
  Cumulative foreign currency
    translation adjustments                          (748)     (748)
                                                --------------------
  Total stockholders' equity                       44,487    44,212
                                                --------------------
    Total liabilities and stockholders' equity   $197,411  $177,500
                                                ====================

See Notes to Consolidated Financial Statements
Page 3<PAGE>
                  AMERICAN RICE, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (Thousands of Dollars)
                              (Unaudited)
                                                    Six Months
                                                 Ended September 30,
                                                   1995      1994
                                                --------------------
OPERATING ACTIVITIES:
  Net earnings                                       $275    $2,342
  Adjustments to reconcile net earnings to net cash
    provided by (used in) in operating activities:
    Depreciation and amortization                   2,980     2,852
    (Gain) loss on sales of property                   (3)       11
    Deferred income taxes, net                        (56)      846
    Changes in assets and liabilities that
      provided (used) cash:
      Accounts receivable                           2,924    (7,051)
      Inventories                                  (5,784)   15,995
      Prepaid expenses                               (567)     (758)
      Other assets                                     83      (231)
      Receivable from ERLY                           (669)     (319)
      Accounts payable and accrued expenses        (1,094)    1,793
      Income taxes payable to ERLY                 (1,037)      109
                                                --------------------
  Net cash provided (used) by
    operating activities                           (2,948)   15,589
INVESTING ACTIVITIES:
  Property, plant and equipment additions          (2,863)   (2,259)
  Proceeds from sales of assets                         8        20
  Loan to ERLY                                    (10,500)      -
                                                --------------------
  Net cash used in
    investing activities                          (13,355)   (2,239)
FINANCING ACTIVITIES:
  Decrease in notes payable                       (16,907)   (9,463)
  Proceeds from issuance of mortgage notes         94,000       -
  Mortgage notes issuance costs                    (5,425)      -
  Repayment of long-term debt                     (55,300)   (3,908)
  Other, net                                          (26)       (4)
                                                --------------------
  Net cash provided by (used in)
    financing activities                           16,342   (13,375)
                                                --------------------
NET INCREASE IN CASH                                   39       (25)
CASH:
  Beginning of the period                           1,864     1,721
                                                --------------------
  End of the period                                $1,903    $1,696
                                                ====================
See Notes to Consolidated Financial Statements
Page 4<PAGE>

<TABLE>
                           AMERICAN RICE, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                           Six Months Ended September 30, 1995
                                 (Thousands of Dollars)
                                      (Unaudited)
<CAPTION>


                                                                 Foreign      Total
                                            Additional           Currency    Stock -
                         Preferred  Common   Paid-in   Retained Translation  Holders'
                          Stock     Stock    Capital   Earnings Adjustments  Equity
                         --------- --------- --------- --------- --------- ---------
<S>                      <C>       <C>      <C>        <C>       <C>       <C>
Balance April 1, 1995     $3,878    $2,444   $25,286    $13,352    ($748)   $44,212

Net earnings                 -         -         -          275                 275
                         --------- --------- --------- --------- --------- ---------
Balance
  September 30, 1995      $3,878    $2,444   $25,286    $13,627    ($748)   $44,487
                         ========= ========= ========= ========= ========= =========


<FN>
See Notes to Consolidated Financial Statements
</TABLE>
Page 5<PAGE>

AMERICAN RICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.  Basis of Presentation:

The consolidated financial statements presented herein at September 30, 
1995 and for each of the three and six month periods ended September 30, 
1995 and 1994 are unaudited; however, all adjustments which are, in the 
opinion of management necessary for a fair presentation of the financial 
position, results of operations and cash flows for the periods covered 
have been made and are of a normal, recurring nature.  The results of 
the interim periods are not necessarily indicative of results for the 
full year.  The consolidated balance sheet at March 31, 1995 is derived 
from the March 31, 1995 audited consolidated financial statements but 
does not include all disclosures required by generally accepted 
accounting principles. Although management believes the disclosures are 
adequate, certain information and disclosures normally included in the 
notes to the financial statements has been condensed or omitted as 
permitted by the rules and regulations of the Securities and Exchange 
Commission.  These financial statements should be read in conjunction 
with the audited financial statements and notes thereto included in 
American Rice, Inc.'s ("ARI") Annual Report on Form 10-K for the fiscal 
year ended March 31, 1995.

2. Notes Payable and Long-Term Debt

In a public offering completed on August 24, 1995, ARI issued 
$100 million in principal amount of 13.0% mortgage notes due 2002 (the 
"Notes").  Portions of the net proceeds of $94 million were used to 
repay $53.8 million of existing term debt, to make a $10.5 million 15% 
loan to ERLY due 2002, and to reduce borrowings outstanding under the 
$47.5 million revolving credit loan.  The Notes were issued pursuant to 
an indenture between ARI and U.S. Trust Company of Texas, N.A. (the 
"Indenture").

The Notes provide for interest payments semiannually, mature on July 31, 
2002, and are non callable by ARI prior to July 31, 1999, after which 
date the Notes are callable at the option of ARI, in whole or in part, 
at any time upon not less than 30 nor more than 60 days notice, at 
107.0% of the principal amount, declining ratably to par on or after 
July 31, 2001.  Except under certain changes of control, upon 
remarketing of the industrial revenue bonds, or asset sales, as defined 
in the Indenture, ARI is not required to make mandatory redemption 
payments on the Notes.  The Notes accrue fixed interest at an annual 
rate of 13.0%, an effective yield rate of  14.4%. 

In addition to fixed interest, the Notes bear contingent interest of 
4.0% of consolidated cash flow (as defined) up to a limit of $40.0 
million of consolidated cash flow during the fiscal year in which such 
interest accrues. Contingent interest accrues in each semiannual period 
(as defined) in which consolidated cash flow in such period and the 
immediately preceding semiannual period is equal to or greater than 
Page 6<PAGE>
$20.0 million.  Contingent interest is payable semiannually, but ARI may 
elect to defer all or a portion of any such payment to the extent that 
(a) the payment of such portion of contingent interest will cause ARI's 
adjusted fixed charge coverage ratio (as defined) for the two 
consecutive applicable semiannual periods to be less than 2.0:1 and (b) 
the principal of the Notes corresponding to such contingent interest has 
not then matured and become due and payable.

The Notes are secured by (a) a first or second priority security 
interest in substantially all of ARI's property, plant and equipment 
(including related leasehold interests), (b) a first priority security 
interest in 39 acres of land in Houston, Texas held for sale, (c) a 
pledge agreement creating first priority security interests in the 
capital stock of ARI held by ERLY (other than 200,000 shares of ARI's 
Series B preferred stock pledged to the holders of ARI's Series 
C preferred stock), (d) the ERLY notes receivable and (e) a security 
agreement creating a first priority security interest in all registered 
U.S. trademarks and a security interest in all other registered 
trademarks owned or licensed by ARI.

The Notes rank senior in right of payment to all subordinated 
indebtedness and pari passu in right of payment with all existing and 
future senior indebtedness of ARI, including borrowings under the 
revolving credit loan.  The Indenture includes covenants that in certain 
instances restrict, among other things, (a) the payment of dividends, 
(b) the redemption of equity interests of ARI, (c) the payment on or 
redemption of indebtedness subordinate to the Notes, (d) certain 
investments (as defined), (e) the incurrence of certain indebtedness and 
issuance of preferred stock, (f) certain transactions with affiliates 
and (g) certain mergers, consolidations or sales of assets.  In 
addition, the Indenture contains certain limitations on capital 
expenditures, operating lease obligations and rice contract polices and 
procedures. The Indenture and the revolving credit loan described below 
contain cross default provisions.

The revolving credit loan, which was amended effective June 30, 1995, 
bears interest at the prime rate of interest plus 0.5% and will mature 
on May 24, 1996.  Funds available for borrowing under this revolving 
credit loan at any time may not exceed 85% of eligible accounts 
receivable (or 90% of accounts receivable backed by acceptable letters 
of credit from customers) and 70% of eligible inventory.  The revolving 
credit loan is primarily collateralized by a first priority security 
interest in trade receivables, inventory, and certain key man life 
insurance. At September 30, 1995, the outstanding balance on this loan 
was $10.1 million and on October 1, 1995 the borrowing base under the 
loan was $37.4 million.  During the six months ended September 30, 1995, 
ARI's maximum borrowing under the loan was $32.4 million
Page 7<PAGE>

Long-term debt consisted of the following:

                                          September 30,  March 31,
                                              1995         1995
                                            ---------------------
     13.0% Mortgage Notes                   $100,000
        Less unamortized discount             (5,944)
     Chase Manhattan Bank                                 $23,755
     Internationale Nederland Bank, N.V.                   23,755
     Texas Commerce Bank                                    6,842
     Other notes                                              948
                                            ---------------------
        Total                                 94,056       55,300

     Less current maturities                     -         (6,727)
                                            ---------------------
        Total long-term debt                $ 94,056      $48,573
                                            =====================


3.  Statement of Cash Flows
   
Borrowings under the revolving credit line in the six months ended 
September 30, 1995 and 1994 totaled $176.0 million and $161.5 million, 
respectively, and repayments during the same periods totaled $192.9 
million and $171.0 million, respectively.  ARI made cash payments for 
interest and financing fees of approximately $6.2 million and $4.4 
million during the six months ended September 30, 1995 and 1994, 
respectively.  ARI paid $1.2 million and $424 thousand for federal and 
state income taxes during the six months ended September 30, 1995 and 
1994, respectively.

4.  Reverse Stock Split

A one-for-five reverse stock split was effected for all issues of 
preferred and common stock on September 8, 1994.  All per share 
information in the financial statements has been adjusted for this 
reverse stock split.

Item 2. Management's Discussion and Analysis of Financial Condition and 
Results of Operations

Results Of Operations

The Company purchases and processes rough rice into branded and 
commodity rice for sale in both international and domestic markets. 
Demand for branded rice products is relatively constant and margins are 
typically higher than those for commodity rice products. Demand for 
commodity rice products is relatively constant globally, but demand for 
U.S. grown commodity rice is dependent upon supply and its cost relative 
to other sources of supply. Supply and costs for both branded and 
commodity products depend on many factors including governmental 
actions, crop yields and weather, and such factors can persist through 
one or more fiscal years.
Page 8<PAGE>
Significant Factors Effecting Future Operations

Japan has commenced placing orders pursuant to that country's commitment 
under the General Agreement on Tariffs and Trade ("GATT") treaty (see 
discussion of Japan business in following paragraph). ARI medium grain 
sales to Japan from its Maxwell, California facilities which will begin 
in November 1995 are expected to favorably impact earnings in the third 
and fourth quarters. However, the current marketing outlook for U.S. 
Southern long grain rice, also a major element of ARI's business, is 
somewhat uncertain, with generally weak demand for unbranded export 
sales. Such sales are an important component of ARI's capacity 
utilization.

ARI's sales to Asia totaled $42.8 million and $50.0 million in the 
fiscal years ended March 31, 1994 and 1995, respectively. Japan 
accounted for virtually all of ARI's sales to this region. For the 
twelve month period ended August 1994, Japan imported 2.4 million metric 
tons of rice, including approximately 500,000 metric tons from the U.S. 
ARI processed and milled approximately 62% of the tonnage from the U.S. 
These rice imports, the first in 25 years by Japan, were necessary due 
to adverse weather conditions that materially reduced Japan's 1993 rice 
crop. Management believes that the poor rice crop, combined with the 
fact that Japan's declining rice production had fallen short of annual 
Japanese rice consumption for seven of the last ten harvests, had 
depleted Japan's rice stock-pile requiring significant rice imports. 
Although this was an unusual occurrence, as a participant of GATT, Japan 
is contractually obligated to import 379,000 metric tons (8.4 million 
hundredweights) of rice for the twelve month period beginning April 1, 
1995 increasing to 758,000 metric tons (17.7 million hundredweights) 
annually by the year 2000. Japan's purchases to date under the first 
year commitment indicate that the U.S. has an excellent opportunity to 
continue to supply approximately half of these projected imports.

Three Months Ended September 30, 1995 Compared to 
Three Months Ended September 30, 1994

Net Sales. Net sales increased $12.1 million, or 15.4%, from $78.3 
million in fiscal 1995 to $90.4 million in fiscal 1996. Of this 
increase, $10.4 million resulted from increased export sales and $1.7 
million from increased sales in the U.S. and Canada.

Export sales increased due to higher volume and to higher average 
prices. Total export sales volume increased approximately 
800 thousand equivalent rough rice hundredweights or 18%, accounting for 
a $8.3 million sales increase. Average export prices increased 
approximately 4%, accounting for $2.1 million in sales increases. Export 
volume was higher primarily due to increased volume in the Middle East 
partially offset by lower sales to Japan compared to the second quarter 
of the prior year. Domestic sales were higher as a result of higher 
volume partially offset by lower average prices.
Page 9<PAGE>

Gross Profit. Gross profit was 11% of sales for the fiscal 1996 quarter 
and 12% for the same period in 1995. Gross profit increased $667 
thousand, or 7.4%, from $9.1 million in the fiscal 1995 second quarter 
to $9.7 million in fiscal 1996, due primarily to increases in gross 
profit from Western Hemisphere and Middle East sales partially offset by 
lower gross profits from the absence of Japan business in the fiscal 
1996 quarter.

Selling, General and Administrative Expenses. Selling, general and 
administrative expenses increased $465 thousand, or 8.3% from $5.6 
million in the fiscal 1995 quarter to $6.1 million in fiscal 1996. 
As a percentage of net sales, selling, general and administrative 
expenses decreased from 7.2% in the 1995 quarter to 6.7% in fiscal 1996.

Interest Expense. Interest expense increased $1.1 million from 
$3.1 million in the fiscal 1995 period to $4.2 million in fiscal 1996 
due to higher average balances outstanding and higher average interest 
rates. Interest expense in both periods includes amortization of 
capitalized debt issuance costs.

Six Months Ended September 30, 1995 Compared to 
Six Months Ended September 30, 1994

Net Sales. Net sales declined $7.2 million, or 3.9%, from $184.0 million 
in fiscal 1995 to $176.8 million in fiscal 1996. The decline in sales 
was composed of $7.7 million in decreased export sales partially offset 
by $455 thousand from increased sales in the U.S. and Canada.

Export sales declined due to lower volume partially offset by higher 
average prices. Total export sales volume declined approximately 
1.7 million equivalent rough rice hundredweights or 14%, accounting for 
a $16.4 million sales decline. Average export prices increased 
approximately 8%, accounting for $8.7 million in sales increases. Export 
volume was lower primarily due to the lack of sales to Japan compared to 
the prior year. This sales decline was partially offset by higher sales 
to the Middle East. Domestic sales were higher as a result of higher 
volume partially offset by lower average prices.

Gross Profit. Gross profit was 11% of sales for both the fiscal 1995 and 
1996 quarters. Gross profit declined $1.1 million, or 5.5%, from 
$20.4 million in fiscal 1995 to $19.3 million in fiscal 1996, due 
primarily to lower sales to Japan from ARI's Maxwell, California 
facility partially offset by increases in gross profit from Western 
Hemisphere and Middle East sales.

Selling, General and Administrative Expenses. Selling, general and 
administrative expenses increased $964 thousand, or 8.9% from 
$10.9 million in fiscal 1995 to $11.8 million in fiscal 1996. As a 
percentage of net sales, selling, general and administrative expenses 
increased from 5.9% in 1995 to 6.7% in fiscal 1996 due primarily to a 
higher proportion of branded sales in 1996.
Page 10<PAGE>

Interest Expense. Interest Expense increased $1.6 million from 
$6.0 million in fiscal 1995 to $7.6 million in fiscal 1996 due to higher 
average balances outstanding and higher average interest rates.

Liquidity and Capital Resources

ARI requires liquidity and capital primarily for the purchase of rough 
rice and to invest in property, plant and equipment necessary to support 
operations. Historically, ARI has financed both working capital and 
capital expenditures through internally generated funds and by funds 
provided by credit lines.

In a public offering completed on August 24, 1995, ARI issued 
$100 million in principal amount of 13.0% mortgage notes due 2002 (the 
"Notes").  Portions of the net proceeds of $94 million were used to 
repay $53.8 million of existing term debt, to make a $10.5 million 15% 
loan to ERLY due 2002, and to reduce borrowings outstanding under the 
$47.5 million revolving credit loan.

The Notes provide for interest payments semiannually, mature on July 31, 
2002, and are non callable by ARI prior to July 31, 1999, after which 
date the Notes are callable at the option of ARI, in whole or in part, 
at any time upon not less than 30 nor more than 60 days notice, at 
107.0% of the principal amount, declining ratably to par on or after 
July 31, 2001.  Except under certain changes of control, upon 
remarketing of the industrial revenue bonds, or asset sales, as defined 
in the Indenture, ARI is not required to make mandatory redemption 
payments on the Notes.  The Notes accrue fixed interest at an annual 
rate of 13.0%, an effective yield rate of  14.4%. 

In addition to fixed interest, the Notes bear contingent interest of 
4.0% of consolidated cash flow (as defined) up to a limit of $40.0 
million of consolidated cash flow during the fiscal year in which such 
interest accrues. Contingent interest accrues in each semiannual period 
(as defined) in which consolidated cash flow in such period and the 
immediately preceding semiannual period is equal to or greater than 
$20.0 million.  Contingent interest is payable semiannually, but ARI may 
elect to defer all or a portion of any such payment to the extent that 
(a) the payment of such portion of contingent interest will cause ARI's 
adjusted fixed charge coverage ratio (as defined) for the two 
consecutive applicable semiannual periods to be less than 2.0:1 and (b) 
the principal of the Notes corresponding to such contingent interest has 
not then matured and become due and payable.
Page 11<PAGE>
As of September 30, 1995, the total contingent interest accrued was 
$89,162. Relevant details are as follows:
                                
                               December 31, 1994       June 30, 1995
                                ----------------    -----------------
    Consolidated Cash Flow:
        Year Ended                   $24,329,000          $20,631,000
        Semiannual Period Ended       $9,897,000          $10,735,000
    Contingent Interest Accrued
        as of September 30, 1995: 
           Amount Pertaining to 
              Semiannual Period 
              Ended (Total-$89,162)      $17,595              $71,567
           Accrual Dates       August 24 through  September 1 through
                                 August 31, 1995   September 30, 1995
    Contingent Interest Paid
        as of September 30, 1995:            -0-                  -0-
    Adjusted Fixed Cost Coverage
        Ratio for Year Ended                                 1.9 to 1 

For the quarter ending September 30, 1995, the consolidated cash flow 
was $4,804,000.                    

The Notes are secured by (a) a first or second priority security 
interest in substantially all of ARI's property, plant and equipment 
(including related leasehold interests), (b) a first priority security 
interest in 39 acres of land in Houston, Texas held for sale, (c) a 
pledge agreement creating first priority security interests in the 
capital stock of ARI held by ERLY (other than 200,000 shares of ARI's 
Series B preferred stock pledged to the holders of ARI's Series 
C preferred stock), (d) the ERLY notes receivable and (e) a security 
agreement creating a first priority security interest in all registered 
U.S. trademarks and a security interest in all other registered 
trademarks owned or licensed by ARI.

The Notes rank senior in right of payment to all subordinated 
indebtedness and pari passu in right of payment with all existing and 
future senior indebtedness of ARI, including borrowings under the 
revolving credit loan.  The Indenture includes covenants that in certain 
instances restrict, among other things, (a) the payment of dividends, 
(b) the redemption of equity interests of ARI, (c) the payment on or 
redemption of indebtedness subordinate to the Notes, (d) certain 
investments (as defined), (e) the incurrence of certain indebtedness and 
issuance of preferred stock, (f) certain transactions with affiliates 
and (g) certain mergers, consolidations or sales of assets.  In 
addition, the Indenture contains certain limitations on capital 
expenditures, operating lease obligations and rice contract polices and 
procedures. The Indenture and the revolving credit loan described below 
contain cross default provisions.

The revolving credit loan, which was amended effective June 30, 1995, 
bears interest at the prime rate of interest plus 0.5% and will mature 
on May 24, 1996.  Funds available for borrowing under this revolving 
Page 12<PAGE>
credit loan at any time may not exceed 85% of eligible accounts 
receivable (or 90% of accounts receivable backed by acceptable letters 
of credit from customers) and 70% of eligible inventory.  The revolving 
credit loan is primarily collateralized by a first priority security 
interest in trade receivables, inventory, and certain key man life 
insurance. At September 30, 1995, the outstanding balance on this loan 
was $10.1 million and on October 1, 1995 the borrowing base under the 
loan was $37.4 million.  During the six months ended September 30, 1995, 
ARI's maximum borrowing under the loan was $32.4 million.

ARI's Board of Directors previously adopted a resolution authorizing its 
management to sell 39 acres of land in Houston, Texas. The proceeds of 
any such sale are required by the terms of the indenture to be offered 
for redemption of the Notes. Management believes that the net realizable 
value of this property approximates its current carrying value of $18.3 
million.

Capital expenditures, limited by the Note Indenture to $5.5 million per 
fiscal year (with carryover provisions as defined) if the consolidated 
cash flow (as defined) does not exceed $30 million per year, were $2.9 
million and $2.3 million for the six months ended September 30, 1995 and 
1994, respectively. Management anticipates the $5.5 million limitation 
will allow for maintenance of existing facilities and will also support 
limited growth.

ARI's Preferred B and C stock carries annual cumulative, non-
participating dividends of $5.2 million and $750 thousand respectively.  
No dividends have been declared or paid as of September 30, 1995.  As of 
September 30, 1995, the Preferred B dividends accumulated but not 
declared are $12.1 million and the Preferred C dividends accumulated but 
not declared are $1.8 million.
Page 13<PAGE>


PART II - OTHER INFORMATION

Item 1.   Legal Proceedings - none

Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

11.1  Computation of Earnings Per Share.

27    Financial Data Schedule

(b)  During the quarter ended September 30, 1995, Registrant did not 
file any Form 8-K Reports.

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.



                                           American Rice, Inc.
                                           -------------------
                                               Registrant


                                             
                                           Joseph E. Westover
                                       ---------------------------
                                       Vice-President / Controller

Page 14<PAGE>

								
Exhibit 11.1

                  AMERICAN RICE, INC. AND SUBSIDIARIES
                   COMPUTATION OF EARNINGS PER SHARE
              (Thousands of Dollars Except Per Share Data)


                                Three Months          Six Months
                             Ended September 30,   Ended September 30,
                              1995       1994       1995       1994
                           --------------------------------------------

PRIMARY EARNINGS (LOSS) PER SHARE

  Net earnings (loss)           ($101)      $332       $275     $2,342

  Less dividends on preferred stock:
    Series B                   (1,295)    (1,295)    (2,590)    (2,590)
    Series C                     (188)      (188)      (375)      (375)
                           --------------------------------------------
                               (1,483)    (1,483)    (2,965)    (2,965)
                           --------------------------------------------
  Loss applicable to
    common stock              ($1,584)   ($1,151)   ($2,690)     ($623)
                           ============================================
  Average common and common
    equivalent shares outstanding:
    Common                      2,444      2,444      2,444      2,444
    Preferred Series A              -          -          -          -
                           --------------------------------------------
                                2,444      2,444      2,444      2,444
                           ============================================

  Loss per share
   applicable to common stock  ($.65)     ($.47)    ($1.10)     ($.25)
                           ============================================

      *  See Note 4 to Consolidated Financial Statements

Continued on next page
<PAGE>

Exhibit 11.1 (Continued)

                  AMERICAN RICE, INC. AND SUBSIDIARIES
                   COMPUTATION OF EARNINGS PER SHARE
              (Thousands of Dollars Except Per Share Data)

                                Three Months          Six Months
                             Ended September 30,   Ended September 30,
                             1995 **    1994 **    1995 **    1994 **
                           --------------------------------------------

FULLY DILUTED EARNINGS PER SHARE *


  Net earnings (loss)           $(101)      $332       $275     $2,342


  Less dividends on preferred stock:
    Series C                     (188)      (188)      (375)      (375)
                           --------------------------------------------
  Earnings (loss) applicable to
    common stock                ($289)      $144      ($100)    $1,967
                           ============================================
  Average common and common
    equivalent shares outstanding:
    Common                      2,444      2,444      2,444      2,444
    Preferred Series A            778        778        778        778
    Preferred Series B          5,600      5,600      5,600      5,600
                           --------------------------------------------
                                8,822      8,822      8,822      8,822
                           ============================================

    Earnings (loss) per share
     applicable to common stock ($.03)      $.02      ($.01)      $.22
                           ============================================


    *  See Note 4 to Consolidated Financial Statements

    ** This calculation is presented in accordance with Regulation
    S-K item 601(b)(11) although it is contrary to paragraphs 14, 30,
    and 40 of APB Opinion No. 15 because it produces an antidilutive
    result. The Opinion provides that a computation on a fully
    diluted basis which results in an improvement in earnings
    per share when compared to primary earnings per share 
    (antidilution) not be taken into account. Therefore fully diluted
    earnings per share reported on the income statement are the same
    as primary earnings per share.