However, the use of chemical fertilizers and pesticides in the production of agricultural products increase crop yield; but cause huge damages to natural resources and the environment. In this study, the chemical fertilizer and pesticide inputs is considered as desirable inputs in the production process that help to increase crop yield. Then, those inputs is assumed harmful (undesirable) inputs that damage the environment. Required data collected using questionnaires from 140 paddy farmers in Babolsar city. Stochastic frontier production function method was used to estimate technical and efficiencies. Results showed that the average technical and environmental efficiency are 87 and 77 percent, respectively. It is observed that environmental efficiency is far less than the technical efficiency. In other words, in order to estimate close to reality production efficiency, harmful (undesirable) chemical inputs must be considered in the production process. Factors affecting technical and environmental efficiency shows that higher education, participation in extension courses and land defragmentation increase the technical and environmental efficiencies significantly. It is recommended to rise farmer's awareness through their participation in extension courses, as well as land defragmentation to increase efficiency in the region. Also, it is suggested that external effects of production enters in the estimation of production efficiency.