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The word paddy is generally used for rice or unmilled rice. In this case the answer is a bit lame: paddy is used as a food crop.
Paddy could also refer to paddy fields; flooded and sometimes terraced rice fields often seen in South East Asia.
Paddy's are used to secure water for the always thirsty rice plants. The practice of leaving the fields submerged during the growing season keeps away many weeds (most plants can't root under water) as well as some pest animal like rodents and certain types of insects. Although wet rice cultivation it's the mostly used method it's also possible to grow rice on dry land. Because of the high water needs of most rice varieties this is only possible using irrigation or in regions with high and reliable rainfall.
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