Japan and South Korea achieved remarkable economic development in the last 40-50 years through technological transfer from developed countries and exports of manufactured goods. The high economic growth of these two countries was accompanied by the unbalanced growth between the agricultural sector and the industrial sector; the comparative disadvantage of the agricultural sectors of these countries compared with EU and USA proceeded, while imports of agricultural products increased as market liberalization progressed.
In this article the following 4 points were discussed.
Firstly, the development mechanism of paddy field agriculture in the two countries in the process of rapid economic development was analyzed, and some empirical laws were pointed out.
Secondly, major factors, which expanded agricultural imports in the process of internationalization and globalization, were examined, and an agricultural import function was estimated. It was found in Japan's case that contribution of income increase was largest followed by the decrease in international prices of agricultural products.
Thirdly, the contents of agricultural protection reduction in Japan and Korea, which were carried out under the WTO agricultural agreement, were examined. The OECD evaluation of the agricultural protection of these two countries was also discussed.
Fourthly, the recent movement of Chisanchishou (consumption of locally produced agricultural products by local inhabitants) in Hyogo Prefecture was examined as one of the moves of localization under the progress of globalization.

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It is important to export high-quality agricultural products for the development of less favored countries, as in Eastern Asia. In this paper, the related mechanism between the export market structure and the domestic regional place of agricultural production is examined through a case study on the export of high-quality rice in the western district of Nishi-Iwami, Shimane prefecture, Japan. The conclusions are as follows:
1. Recently the demand for high-quality agricultural products has grown up in Eastern Asia countries, especially in the newly industrializing economies (NIEs), in which the GDP per capita of big cities is over $10, 000, thereby producing a new rich middle class. Thus, intra-trade of agricultural products could be formed between Japan and these countries.
2. As the retail shop system for high-quality agricultural products has established in one of the big cities of one of the NIEs, Taiwan, many high-quality rice and fruits could be exported from Japan.
3. The reasons that high-quality organic rice in the Nishi-Iwami district was exportable to Taiwan were the (a) existence of the demand in Taiwan, (b) the effect of marketing research, and (c) the existence of the organization of rice suppliers in the Iwami district.
4. It was possible to negotiate directly with high class shopping malls for the farmers' organization in this small, less-favored area, Nishi-Iwami, so that this organization could lower the transaction costs, get trusted, and benefit from profitable business conditions from that shopping mall.
Even through the scale of this rice trade was just one ton per month, the information of high-quality rice export of Nishi-Iwami to Taiwan spread widely all over Japan. As a result, the rice domestic demand increased more than the export demand, which in turn contributed to improving the economic conditions of the region.

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This paper explores the problems and perspectives of agricultural policy in northeastern Asian countries as a less favorable area in the world, especially focusing on current agricultural programs in Japan and Korea. One of the outstanding features of the current Korean agricultural policy is the introduction of 8 programs of direct payments in just less than 10 years for supporting small and middle-size farmers and guiding them toward ecological farming. These programs are neutral to structural changes in farming, and attach importance to income support of rice farmers. Though the Korean direct payments programs have been highly appreciated in Japan, they are guessed to be replaced by programs promoting structural improvement after the retirement of elderly farmers. The programs in that sense are thus not sustainable.
In contrast to Korea, the Japanese government introduced structural improvement measures into existing direct payments for farming in less favorable areas and upcoming direct payments for income compensation in 2007. The latter direct payments program is called “the Japanese type of direct payments”, and targets only large-scale farmers and community-based farming. The program is unique and never seen in the programs of European countries. But the structural improvement will not be easily accomplished in line with the purpose, because farmers hesitate to sell their land or lend it to large-scale farmers for long-term use due to the expectation of capital gain from selling their land as land for other use. It is necessary to zone agricultural land stably for promoting structural improvement by reducing the expectation of capital gain. One measure is to set up zoning criteria for agricultural land as distinct from those for urbanization. Under such stable zoning, it would be preferable to transfer direct payments without any target, which will thus distribute the resources by market mechanism optimally.
Zoning is a common issue among northeastern Asian countries, and should be examined more deeply from now on.

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Agriculture in Northeast Asian countries, including Japan, Korea, and China, has several common characteristics such as small-scale rice farming, and it is important for these countries to jointly establish an international food trade rule which enables their agricultural sustainability in the future against the severe free trade pressure from exporting countries with large-scale farms. Forming a Northeast Asian Free Trade Area is a way to strengthen cooperative relationships among these countries. However, there are still huge differences in agricultural productivity among these countries. Therefore, we should seek possibilities of a common agricultural policy that adjusts imbalance of FTA gains among the countries by creating a common fund collected in proportion to the GDP level of each country just like the EU budget. We proposed a systematic model to examine the feasibility of such programs considering combination of self-sufficiency rate of rice supply, budgetary constraints, reduction limit of rice tariffs, and nitrogen balance.

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