Mechanized two-wheel tractors have become increasingly important for improving smallholder rice farming efficiency in Indonesia. This study analyzes the impact of introducing tractor-based tillage on labor time, production costs, and farmer welfare in Cangkring Village, Plered, Cirebon. A quantitative survey of 60 rice farmers was conducted, measuring farm budgets and using SEM-PLS modeling to link tractor adoption to efficiency and income outcomes. Results show average paddy yields of 7,000 kg/ha at IDR 6,500/kg, giving gross revenue ~IDR 45.5 million/ha. Total production cost averaged about IDR 20.635 million/ha (≈Rp17.97M fixed and Rp2.67M variable), yielding a net profit of IDR 24.865 million/ha (R/C≈2.2). The cost of mechanized operations (hand tractor plowing plus power-threshing) was relatively low (~IDR 1.39 million/ha). SEM-PLS analysis confirms that tractor use significantly improved field efficiency (path β≈0.36, p=0.001) and reduced unit production costs (β≈0.58, p<0.001). Both greater time efficiency (β≈0.45, p<0.001) and lower costs (β≈0.22, p=0.034) had significant positive effects on farmer welfare, and tractor use also had a significant direct positive effect on welfare (p=0.025). Mediation tests revealed strong indirect effects of mechanization on welfare via efficiency and cost savings (indirect β≈0.806 and 0.804, p<0.001 each). These findings indicate that small-scale tractor mechanization substantially boosts productivity and profitability for Indonesian rice farmers. In conclusion, adopting tractor-based mechanization greatly enhances labor productivity and income among rural smallholders, suggesting that targeted support (training, subsidies) for such technology can significantly improve farmer welfare and agricultural efficiency in Indonesia.