Understanding the interconnections and tradeoffs between food, energy, and water (FEW) in grain production, which are essential for agricultural sustainability, remains an elusive yet important task. We propose a four-step analysis method for exploring potential approaches to coordinating the FEW nexus in grain production based on a conceptual framework that incorporates the impact of rural livelihood transitions and farmland resource constraints. We apply this method to a small-scale watershed in Hunan Province, China using data from land-use maps, farm household surveys, farmland quality surveys, and cropping-pattern surveys. Transitions of rural livelihoods have led farmlands to become increasingly large in scale. The combined impacts of this concentration of large-scale farms and the government subsidy policy, which favors double cropping, undermines the FEW nexus. Our findings suggest two operational approaches for coordinating the FEW nexus in rice production. One is to develop adaptive agricultural policies that support farmers whose aggregate performance on rice production is superior or more balanced. The other is to optimize cropping patterns based on the suitability of farmland for grain planting.