1) There are two big factors strongly influencing Japanese agriculture: the structural change of world grain markets and huge trade imbalance between Japan and the U.S
2) The structural features of the world grain markets in 1980s could be characterized as “weak demand, over-supply” situation.
Seeing the outlook of various regions in the world in 5 or 10 years by USDA reports, there are few factors which can contribute to the strong growth for grain demands. But the potential export-supply capacity including set-aside land in the U. S. will be kept high.
Therefore, over-supply structure of the world grain market would continue for years, although a temporary fluctuation caused by the extraordinary climate might occur.
3) The present currency exchange situation, “strong yen, weak dollar,” is favorable to promote U.S. exports.
But, there are social, structural factors which make the non-price (quality) competitive power of manufactured goods weaker in the U.S. So, the substantial reduction of trade imbalance between the U. S. and Japan will not be easy in a few years. As the result, the on-going currency exchange situation will continue.
4). Considering these conditions, agricultural products price gaps between outside and inside of Japan will continue, and the substantial trade imbalance pressures to the trade liberalization of agricultural products would also continue.
5) In these circumstances, directions of Japanese agriculture should be following:
(1) Taking into the consideration that the self-sufficiency rate of grains in Japan is only 33% and most of 33% is sustained by only rice, we need to give the first priority to Food Security. Even if the over-supply market structure continues, we should not undervalue Food Security. (2) Japanese agriculture should be more flexible as to farm prices to respond at least gradually to the changes in international circumstances. (3) In the GATT negotiation (Uruguay Round), Japan should present her basic need to keep the minimum level of agricultural production and try to make rules Japanese agriculture could accept. (4) Trade imbalance has been caused by manufacturing goods. So, it should be reduced through that channel. (5) Japan should make the strategy to contribute to the world more clear and we have to take substantial expenditure for it.

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I want to clarify in this article whether the Japanese agriculture can survive under the adjustment policy of economic structure or not. The main conclusions are as follows.
1) Since 1985's G5, prices of farm products have reduced and the import of farm products has rapidly increased.
As the result of these, the agricultural production has ceased to increase. Under the reduction of the local labor market, the farm household members engaged in stable part-time works are decreasing, on the other hand the members in unstable part-time works increasing. The price of farm land is falling in pure rural regions.
2) The adjustment policy of economic structure is exposing all of Japanese industries to international competition under the exchange rate of 120-130 yen par US dollar. Under this adjustment process, Japanese government is going to adopt import liberalization policy for all farm products. As the result agriculture may be forced to disappear from Japan.
3) In order to protect Japanese agriculture, today's Japanese economic structure which too deeply depend on export should be changed to the economy based on the enlargement of domestic market and parchasing power of Japanese nation. And also the protection policy of agriculture must be realized on the existence of trade union “free from capital” and farmers' movement “independent of government.”

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Japanese agriculture faces the final stage of import liberalization of agricultural products. The purpose of this report is to investigate the effects of import liberalization of rice and beef.
A partial equilibrium model named the Pilot International Rice Model is constructed. The main assumptions for the calculation using the model are the complete liberalization of Japanese rice import and abolition of U.S. assistance to rice production. The results show that the Japanese rice production would have decreased from 11 million metric tons (brown basis) to 2 or 3 million tons while the U. S. rice export to Japan would have a little increased or decreased according to 1985 or 1986 as the initial base year. This indicates that the U. S. rice production has lost the international competitiveness without the government assistance.
A dynamic Japanese beef model which was built 3 years ago by the reporter and updated recently was used for the conditional projection. The results indicate that Japanese beef industry would be forced to contract to one-tenth by 2000 in case of complete beef import liberalization while the import of beef would increase about ten times as much as 1986 beef import. But Japan could maintain the beef production at the present level if the reasonable border and domestic measures are taken after the abolition of import quota system.

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The main purpose of this paper is first to identify and analyze the basic issues of Japanese agricultural policy under the changing world economic situations, and then to examine the future directions of Japanese agriculture as well as the needed changes for agricultural policy. Two important agricultural policy areas are taken for this analysis, namely, structural policy and agricultural trade policy.
It is pointed out that there exist three basic policy issues in the contemporary Japanese agriculture: (1) a gradual decline in terms of the net aggregate value of production and incomes in domestic agriculture, due mainly to lowered commodity prices and increased imports; (2) the structural imbalance of the supply and demand of rice, which requires a further adjustment to cut down the resurgence of overproduction; and (3) lowered returns to agricultural labor, which makes it more difficult to foster and create large-scale, viable farming units, particularly among rice producers.
Considering there are certain limitations of structural improvement in Japanese agriculture, productivity increase and cost reduction in rice and other field crops have to be pursued more efficiently by creating cooperative and community-based agricultural systems, rather than simply by expanding the farm size of individual farmers. As for the future agricultural trade policy, Japan will continue to receive stronger pressure to liberalize remaining trade barriers. But for the purpose of food security, the maintenance of regional economy, and other external benefits, Japanese agricultural policy needs to protect at least the present minimum level of agricultural production, while allowing for foreign exporters a greater access to the other commodities of minor importance in food security.

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