The world food system is on a course of structural change in two ways following the Uruguay Round agreement. One is a worldwide intrusion of free market principles in the agricultural commodities market. The other is the looming environmental limitations of our "Green Planet." We will notice the gradual loss of room for additional food production to meet the demands of the ever-increasing world population toward the middle of next century.
　But the world will see an improvement in nutritional intake on average in the coming 10 years. Thus free market advocators will continue to be strong in the next round of trade negotiations. Japan will face not only further cuts in agricultural support prices and high tariff rates but also the hard choice between expansion of minimum access and tariffication of rice imports.
　All agricultural products except rice are already under harsh competition with imported products. It is almost impossible for the Japanese government to raise the food self-sufficiency ratio without changing the country's food consumption pattern towards more animal products, which heavily depend on imported feeds. It will be very difficult for the Japanese government to set the target for food self-sufficiency ratio.
　Environmental conservation cannot be an excuse for the border protection or price support of agricultural products when we check discussions in international forums such as OECD or WTO.
　The EU and US have already changed their basic food policy direction from price support to direct payment. The EU has introduced a new agricultural policy combined with environmental conservation. The Japanese government has to work out a new food policy taking into account the agricultural negotiations in the next WTO round.

　After the latter half of the 1980s in Japan, the number of farm households has decreased rapidly, because most successors to farm households have decided not to continue their ancestral farming traits. This situation has occurred due to the wide spreading consciousness of self-determination in occupations and the failing profitability of extremely small farms. On the other hand, large-scale family farms or partnership farms, especially in the rice production sector, have increased by way of leaseholds from households abstaining from farming. If there are management bodies willing to enlarge farm size, the farmlands for lease flow into the bodies in quantity within a short period. As the result of these situations, the recent level of rents has been regulated by the net profit of large-scale farmers estimating their wages at social worker standards. Before, the rent level was regulated by the surplus of middle-class farmers evaluating their wages as day laborers. Land strips abandoned of cultivation have increased not only in hilly areas owing to the impossibility of economically viable farming, but also in plain areas owing to the many mismatches between leaseholders and landowners. The following proposals are very important contents for policy making: enforcing a non-changing land use zone system, fostering lasting viable farmers, providing economic assistance for hillside farming, coordination between leaseholders and landlenders, consolidation of farming land, determination of a fair lease standard based on the economics of viable farmers and personnel positioning for solving complicated land problems.

　This paper aims to search the direction of Japanese agricultural policy orientating toward the next WTO agricultural negotiations and the New Food/Agriculture/Rural Basic Law structuring, as clarifying characteristics of agricultural policy in developed countries.
　The following points can be pointed out when we try to characterize the agricultural policies in developed countries under WTO. The first fact is having reduced agricultural budgets. The second is having shifted the weight of measures to "decoupled" direct income payments that have no, or at most minimal, trade-distorting effects or effects on production. The third is having converted policy to paying consideration to both resource conservation and the maintenance of rural communities.
　Japanese agriculture, too, cannot evade the current trend of international policy in the future. Japanese agricultural policy canvasses the contents of agricultural public works and needs to enrich the direct income payments. It is necessary for Japanese agricultural policy to establish the same minimum price guarantee system as the U.S. and EU. In short, it is important that Japanese agricultural policy should aim to maintain a reasonable livelihood for farmers and resource conservators.

　One of the most important and basic principles of the Agricultural Agreement of the GATT Uruguay Round is the search for rules which would allow liberalization of the world market and the enforced transference of agricultural support policies to the use of bound tariffs and decoupled domestic income support by direct payments. The aim of the 1992 CAP reform was twofold: to cut over-production and to maintain rural prosperity by supplementing the incomes of small farmers by direct subsidies. This reform practice in recent years looks to be successful. But we are expected to assess with prudence the changeover of the type of farm support of the CAP. Support of the intervention price system was not abandoned. The EU should take measures against specific attacks on the agricultural products in the Mediterranean member countries, and therefore on the incomes and living standards of the small farmers in those areas. The drastic switch in agricultural policy of the United States should be regarded as a new policy which gives a great deal of weight to the risk management of enterprise farms.
　The paddy agriculture in the East-Asian monsoon areas has an original environmental value. Japanese agricultural policy should establish a special system of food risk management in a unique way. A production policy combined with price support should put emphasis on the strategic crops and animal products which support the stable supply of national foods: rice, wheat and barley, soybeans and milk.