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In this study, we aimed to improve rice farmers’ productivity and profitability in rainfed lowlands through appropriate crop and nutrient management by closing the rice yield gap during the dry season in the rainfed lowlands of Indonesia. The Integrated Crop Management package, involving recommended practices (RP) from the Indonesian Agency for Agricultural Research and Development (IAARD), were compared to the farmers’ current practices at ten farmer-participatory demonstration plots across ten provinces of Indonesia in 2019. The farmers’ practices (FP) usually involved using old varieties in their remaining land and following their existing fertilizer management methods. The results indicate that improved varieties and nutrient best management practices in rice production, along with water reservoir infrastructure and information access, contribute to increasing the productivity and profitability of rice farming. The mean rice yield increased significantly with RP compared with FP by 1.9 t ha−1 (ranges between 1.476 to 2.344 t ha−1), and net returns increased, after deducting the cost of fertilizers and machinery used for irrigation supplements, by USD 656 ha−1 (ranges between USD 266.1 to 867.9 ha−1) per crop cycle. This represents an exploitable yield gap of 37%. Disaggregated by the wet climate of western Indonesia and eastern Indonesia’s dry climate, the RP increased rice productivity by 1.8 and 2.0 t ha−1, with an additional net return gain per cycle of USD 600 and 712 ha−1, respectively. These results suggest that there is considerable potential to increase the rice production output from lowland rainfed rice systems by increasing cropping intensity and productivity. Here, we lay out the potential for site-specific variety and nutrient management with appropriate crop and supplemental irrigation as an ICM package, reducing the yield gap and increasing farmers’ yield and income during the dry season in Indonesia’s rainfed-prone areas.