Low price competitiveness of Tanzania produced rice driven by high production costs calls attention to developing ways of improving efficiency in production. This study was conducted to analyse production costs and factors influencing choice of inputs provider in smallholder irrigated rice production. Specifically, it focused on comparing costs of production, determining factors influencing smallholder irrigated rice farmers’ choice of inputs provider and analysing production cost efficiency. Data were collected from four cooperative irrigation schemes in Pwani and Morogoro regions involving 200 farmers. Production costs were quantified using enterprise budgeting technique and differences analysed using T-test. Factors influencing choice of inputs provider were determined using Logit model. Translog stochastic cost frontier was used for cost efficiency analysis. Study findings indicate that, costs of production stands at 315.47USD/MT. Farmers purchasing inputs through irrigation scheme cooperative had lower production costs than farmers purchasing from other input providers. Factors influencing choice of production inputs provider were distance from the cooperative to nearest town, membership in other organizations, extension services, input quality satisfaction and availability of cash and credit payment mode (p<0.05). Rice output and prices of labour, fertilizer and irrigation water significantly affected costs of production with unit cost of production being decreasing by increasing rice output (p<0.05). Inefficiency in production was significantly influenced by farming experience, planting methods, frequency of weeding, degree of specialization and source of purchased inputs and accounted 82.08% of variability in costs of production (p<0.05). The study concludes that, there is loss of efficiency in production due to high production costs attributed by rice output produced, input prices, source of purchased inputs and other agricultural practices. It is recommended to use labour saving technologies, purchasing inputs through irrigation scheme cooperative and gaining more economies of scale by increasing specialization.


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