Masters DissertationEfficiency analysis remains an important issue in economic studies, especially for projects which spent tax payers‟ money, grants and loans. Efficiency has implications on agricultural policy in terms of improving paddy production through improved input use efficiency at Madibira smallholder irrigation scheme. This study sought to determine factors influencing paddy production and technical input use efficiency among farmers at Madibira scheme. The total sample for study was 120 respondents. In addition, the study was also designed to examine specific and some selected characteristics affecting farmers‟ efficiency at Madibira smallholder famers‟ irrigation scheme. Descriptive and linear regression analyses were used as analysis tools. The input use efficiency of farmers at Madibira smallholder famers‟ irrigation scheme was computed using Data Envelopment Analysis (DEA) tool. The study found that land, cost of paddling, and transport cost of bags from the field to the residence were significantly affecting the farmers‟ efficiency. Other inputs were found to be positive but not significant. The overall technical efficiency of the farmers ranged from 0.423 to 1 with an average of 0.705. This means that farmers were technically efficient since 55% farmers got technical efficiency score of more than 71% which is above the mean score. In addition, the average yield of paddy at Madibira irrigation scheme for the year 2010/2011 was 2.852ton/ha. The average income was TZS 288 9617 in which the maximum and minimum yields were 3.85ton/ha and 1.82ton/ha respectively. To improve efficiency of smallholder farmers at Madibira irrigation scheme Madibira Agricultural and Marketing Cooperative Society (MAMMCOs) should introduce cheap and local technology for seed paddy preparation. Also, loan institutional and cooperative should be strengthened.