For more than half of humanity, rice is life. It is the grain that has shaped the cultures, diets, and economies of billions of people in Asia. Rice is so integral to Asian life that despite the differences in history, customs, and culture throughout Asia, the central role of rice is the one certainty all Asian nations (www asiarice org, 2002). Mindanao is always considered the food basket of the Philippines. However, the people here are suffering from hunger, basically because they mostly belong to the lowest income group of the population in the country and they can less afford food even rice itself. With this economic standing, rice accounts a very large percentage of their daily calorie intake. Hence, the major aim of this paper was to analyze the impact of the production inputs to the gross returns of palay. This study used panel data estimation in analyzing the impact of the explanatory variables such as the cost of seeds/planting materials, cost of labor, quantiry of fertilizer applied, cost of crop protection products, cost of land and property charges, cost of machineries, tools and equipment, cost of energy and water, and other miscellaneous costs, farmgate price of palay and area harvested of palay to the dependent variable which was the gross returns of palay. Panel data was utilized using the (six) 6 regions of Mindanao namely Northern Mindanao, Southern Mindanao, Western Mindanao, Central Mindanao, CARAGA and ARMM over the 12 time periods, 1991 to 2002. There were three models which were analyzed, the irrigated, the non-irrigated and the all land type. Seventy-two(72) samples were utilized for the analysis. The result of the analysis revealed that the explanatory variables used can highly explain the variation in the gross returns of palay because the value of the R2 was very high at mostly 1% level of significance in the three models. The log linear production model indicates that the direction of an impact of an input can vary across regions and over time. However, better understanding of the economic, biophysical and technological framework of rice-based systems and their interactions with their environments will be a vital part of the future efforts
