This is a food item, consuming it (via right click) will replenish your food and water. This item has some anti-radioactive properties, consuming it will lower your radiation level. It will also provide minor healing.
The small rations is a consumable item. It has a high anti-radiation effect and is therefor useful in areas which contain Radiation.
The small rations can be consumed by putting it into the Hotbar and pressing the specified key of 1-6. Or from anywhere in your Inventory by hovering your mouse over the item and then clicking on it with your right-mouse button after which you can select the Consume option.