Also found on Wadi Hares, in the Gandulf Wadi west, southwest of Bastok. The Wadi Hares are on the second level of the Wadi, by using the spring guiser to reach it. I seem to get 1 in about every 5 killed.
You're thinking of another type of grass - specifically, the one used for the Chocobo License quest. Having killed enough wadi hares to get both the 4 clumps of grass I needed for the Chocobo License quest along with 4 more for my partner, I can firmly state that the Wadi Hares do not drop papaka grass.