A Research Report Submitted to the Faculty of Social Science in Partial Fulfillment of the requirements for the Award of Bachelor of Science in Economics Project Planning and Management of Mzumbe University.The study made an analysis of rice production among smallholder farmers in Nzega district in Tabora region. The study objectives were to identify the cost and benefit incurred during the production process, to analyze the influence of social economic factors on rice production and to assess the risk involved in production of rice. The study population was rice farmers of Nzega district. To achieve the objective of the study, relevant cross sectional primary data were collected through questionnaire, from 80 rice farmers in Nzega district. The data collected were analyzed and relevant descriptive statistics were reported. Results of the regression shows that Income, Farm size, Experience and Financial risk were significant variables that affect rice production. Income increases production by 36.32%, Farm size decrease production by 5.6%, Experience increases production by 34.6% and financial risk decreases production by 17.3%. Post estimation test such as Multicollinearity and Heteroscedasticity were conducted. The multicollinearity test results implied that all explanatory variables were free from multicollinearity problem. Heteroscedasticity test results implied that the model does not suffer heteroscedasticity problem. The results obtained through the profitability analysisconcluded that, on average farmers benefit from rice production because the costs that are incurred in production are less as compared to the returns; Farmers face some challenges in their production activities including higher input prices, poor extension services and most of the farmers are price takers. Based on the findings of the research report some recommendation were made including; Farmers should communicate and negotiate with suppliers and loan terms with lenders so that lenders can address rice smallholder farmers credit needs on long terms with affordable interest rates, farmers should create some strategic plan for their farming activities by controlling their key farm expenses, considering leasing and rental options rather than purchasing machinery, equipment or land as purchasing the tools for production may seem to be more cost fully.