Nigeria is a major importer of rice in the world with over 756 million USD annual expenditure on rice
importation. This is probably due to insufficient domestic production occasioned by inefficient utilization
of resources and other farm inputs. This study is therefore designed to estimate the costs and returns to rice
production; and analyze resource use efficiency in rice production in Ogun State, Nigeria. A three-stage
sampling technique was used to select a total of 120 rice farmers. Gross margin and regression analyses were
used to analyse the data for the study. The study revealed that an average small scale rice farmer realizes
a gross margin of N 90, 634.35 per hectare. While farm size, labour and crop production systems account
for 80.5% (coefficient of multiple determination, R2
) of the changes in rice production, the study revealed that
farm size, labour and seeds were grossly underutilized in rice production. The study therefore recommends
the need for policy that would enhance increase in the allocation of land, seeds and labour in the production
of rice.