This study aims to determine the efficiency of production and factors affecting production inefficiency of shallot farming in Madiun Regency. The research was conducted in Bandungan Village, Saradan District. This study involved 60 farmers as the samples determined by accidental sampling method. The data analyzed was farming data on Raya season or dry season. The efficiency of production was determined by frontier method. The result showed that shallot farming in Madiun Regency was efficient in production with an average efficiency value was 0.903. Factors which positively affecting shallot production in Madiun Regency were family's potential labor and farmer participation in farmer group. The efficiency of shallot production during the Raya season or dry season could be optimized. The use of family's potential labor should be reduced an farmer groups must be optimized to empower farmers.