This paper, which is based on the translog income function, has shed some light on how the production adjustment program for rice, in which the set-aside rate is rising and subsidy unit price is declining, will influence income obtained from growing rice and the demand for land rented by farm households. Several important findings may be summarized as follows.
　A decline in the subsidy unit price diminishes both agricultural income and demand for rented land, However, a rise in the set-aside rate increases demand for rented land. On the other hand, the enforcement of the set-aside program caused the income of rice farming households to increase until 1986 and thereafter to decrease. This is due to the fact that the subsidy unit price has been lower than the land rent per area since 1987.
　This study suggests that so long as the set-aside quotas are assigned uniformly to farms, paddy fields will never be consolidated into larger farms. Thus, the following proposals to reform the current system regarding the set-aside program are presented. To begin with, the four political constraints are given as follows: the consistency of the set-aside program with structural reform in the rice sector, the quantitative equilibrium of supply and demand for rice, the desire to keep income at the present level, and the desire to avoid any increase in the total amount spent to subsidize the program. Given these constraints my proposal is the discriminatory assignment of the set-aside rate and the subsidy unit price in accordance with the size of farms. More specifically, a higher set-aside rate together with a higher subsidy unit price should be assigned to large farms and vice versa.
　This proposal, however, is not necessarily the first-best solution in terms of the efficient farmland allocation because there exist economies of scale in the Japanese rice sector.

　Depending on the general understanding of studies in agricultural structure in Japan, in the nonagricultural labor market where farm labor powers are newly drawn, there is a low wages level that is called “ Kiriuri, ” and it is said that it has a great influence on the existing form of opportunity cost of labor powers of farm households and the development of agricultural structure.
　On the contrary, this paper intends to show a recognition of the actual condition that regions where the “ Kiriuri ” can hardly be found in young and middle-aged male labor powers of part-time farm households spread over the level land of the West Japan centering around the Kinki district in the 1980s, and to maintain that the general understanding needs to be bounded regionally. For that, we investigated the wage structure of Kameyama City in Mie Prefecture, and considered the possibility of generalizing the results of the investigation.
　The major conclusions are summarized as follows: 1) The structure of the local male labor market of Kameyama City consists of two strata, and that of women three strata. When this structure is compared with the results of former research on local labor market, we can indicate as the feature of the area surveyed that there is not the bottom of the wage structure of young and middle-aged men. 2) It seems that we can generalize these results in the level land of the West Japan centering around the Kinki district, when we examine relations between reproduction cost of labor powers of farm households and wage of temporary employees and study results of former investigations. 3) In the 1980s, there were many chances of getting jobs in the second and the third strata of the rural labor market for middle-aged women, and besides in the second stratum for middle-aged men. On the contrary, there are few in the first stratum for persons of middle age without distinction of sex. 4) We can forecast that the structures like above regulate existing form of the opportunity cost of labor powers of farm households.

　The purpose of this paper is to analyze the extent and sources of difference in the nominal unit cost between Japan and the United Kingdom (UK) for dairy farms based on the index number methodology.
　Conventional index number of nominal unit cost is decomposed into difference in nominal factor prices and in total factor productivity. It is shown that the difference in nominal factor prices can be decomposed into the effects due to difference between nominal exchange rate and purchasing power parity,and due to difference in real factor prices. It is also shown that the difference in total factor productivity can be decomposed into the effects due to difference in economies of scale and due to difference in technological conditions. The decomposition framework is applied to the data of dairy farms in Japan and UK during the period 1984/85.
　The major empirical results in this study can be summarized as follows.
　First, the effect due to the difference between the nominal exchange rate and the purchasing power parity is larger than due to the difference in the real factor prices with respect to the contribution to the difference in the nominal factor prices.
　Second, the extent of economies of scale in UK is larger than in Japan at the data point of the milk production in Japan.
　Third, the effect due to the difference in the technological conditions is larger than due to the difference in economies of scale with respect to the contribution to the difference in total factor productivity.
　Fourth, the cow price ranks first, self-supplied forage price ranks second, and the land rent ranks third among the real factor prices with respect to the contribution to the difference in the nominal unit cost. The nominal exchange rate fluctuation has a great impact on the contribution to the difference in the nominal unit cost made by the difference in the purchased feeds price.
　Finally, the technological conditions stand first, the difference between the nominal exchange rate and the purchasing power parity stands second, the difference in real factor prices stands third, and the difference in economies of scale stands fourth with respect to the contribution to the difference in the nominal unit cost.
　These findings indicate that technological change and appreciation of nominal exchange rate are more important than decrease in real factor prices in order to narrow the gap in the nominal unit cost between Japan and UK for dairy farms.