This study assessed the impact of the WACOT Out-Grower Scheme on the profitability of smallholder rice farmers in Kebbi State, Nigeria. Specifically, it examined the socio-economic characteristics of beneficiary and non-beneficiary farmers and compared their production costs, returns, and profitability. The study is significant because it provides empirical evidence on the effectiveness of contract farming in enhancing rice profitability, and rural livelihoods. A cross-sectional survey and quasi-experimental research design were adopted. Primary data were collected from 540 rice farmers comprising 270 beneficiaries and 270 non-beneficiaries selected through a multi-stage sampling technique across seven rice-producing Local Government Areas in Kebbi State. Data were analyzed using descriptive statistics and Cost-Benefit Analysis. The findings revealed that beneficiaries had better educational attainment, larger farm sizes, greater access to irrigation and extension services, and lower production costs (₦360,000/ha) than non-beneficiaries (₦396,800/ha). Beneficiaries also achieved higher average yield (5,200 kg/ha), total revenue (₦1,664,000/ha), net farm income (₦1,304,000/ha), return per naira invested (3.62), and benefit-cost ratio (4.62), demonstrating superior profitability. The study concludes that participation in the WACOT Out-Grower Scheme significantly enhances productivity, profitability, and institutional support for smallholder rice farmers. It recommends expanding farmers' access to quality inputs, extension services, irrigation infrastructure, affordable credit, and inclusive participation, particularly for women and resource-poor farmers, to strengthen sustainable rice production and food security in Kebbi State and Nigeria.