Heat the butter in a saucepan over medium heat. Stir in the onion; cook and stir until the onion has softened and turned translucent, about 5 minutes. Reduce heat to medium-low, and continue cooking and stirring until the onion is very tender and dark brown, 15 to 20 minutes more.
Pour in rice and stir to coat. Stir in water, parsley flakes, saffron, and 3 drops of yellow food coloring (optional). Reduce heat, cover, and simmer until water is absorbed, about 30 minutes.
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