The study examined the level of economic efficiency of rice farmers and assesses the link between the estimated efficiency level to farmer’s socio economic and other characteristics. To seek this objective, the author use multistage sampling technique to select 153 rice producers in fogera woreda and cross sectional data were collected by using interview through structured questioners for 2018 production year. Cobb Douglas stochastic frontier analysis was used to estimate efficiency scores. The mean technical, allocative and economic efficiencies were 79%, 86% and 68% respectively. This implies that output of rice can be increased by 21% given the existing inputs and technological level and rice farmers has the possibility of reducing their production cost by 14% to produce the existing output level. Furthermore, the study assessed factors affecting inefficiency levels of rice producers by using Tobit model. The Tobit regression result revealed that age of the household head, sex of the household head, family size, education, experience, extension service, membership of farm association and training were the variables that affect technical, allocative and economic inefficiency scores. Thus, the author recommended policies targeting institutional improvements (training, education and membership of farmer associations) and focus on experience of farmers would reduce rice farmer’s inefficiency or improve farmer’s efficiency in rice production.