There is a growing interest for understanding whether technological and input linkages in contract farming increases farm productivity and efficiency, this paper provides empirical evidence by taking a case study of hybrid paddy seed cultivation under contract farming in Andhra Pradesh. For this purpose, data were collected from 150 sample households, comprising 81 contract farmers and 69 non-contract farmers from Karimnagar district of Andhra Pradesh pertaining to the year 2008. Heckman sample selection model is estimated to examine the productivity difference between contract and non-contract farmers and production frontier function was used to measure the technical efficiency. The application of inputs and yield per acre varied across crops and also farmers. The factors like labour, chemicals and region have shown a significant contribution to total output of the contract crop, while labour, chemicals, power and region have shown significant contribution to total output of non-contract crops that is being grown by the non-contract farmers. The results indicated that non-contract farmers could achieve higher productivity and efficiency in growing non-contract crop compared to contract farmers. On the other hand, contract farmers could achieve higher productivity in growing contract crop as compared to non-contract ones. Thus the impact of modern technology in contract farming on traditional knowledge and local environment should be examined in depth and the interest of the farmers need to be protected.