The paper makes a survey of analytical challenges in recent literature regarding (1) Japanese agricultural policy reforms in terms of PSE and multifunctionality, and (2) possible impacts of FTAs for which negotiations are under way. In the context of the WTO, the movement from market price supports (MPS) to decoupled measures of direct payment delays compared with those of other OECD countries. The Japanese government wants to justify its protection policies which promote multifunctionality, of paddy fields or rice production in particular. The author's analysis employing the Policy Evaluation Matrix (PEM) approach, which has been developed by the OECD, shows large impacts of support measures on functions of land conservation, parts of multifunctionality, and effectiveness of border measures (MPS) is less than that of measures of direct payment. Alternative frameworks analyzing possible impacts of FTAs on Japanese agriculture are also considered. Default numbers from the ongoing database in GTAP being applied very often in recent studies would be dubious in cases of Japanese rates of duty. Careful applications of GTAP are suggested and the classical Viner's approach would be helpful in the first step, intuitive considerations. The Bertrand's game approach would be also useful for ex-post analyses. Using this approach, we could evaluate possible reactions by non-member countries using data in cases of GSP provisions. In general, support policies critical in Japanese agriculture, e.g., rice, sugar, and starch, are managed by quantitative measures such as TRQ and sometimes by measures not necessarily transparent, which makes it difficult to estimate possible impacts of FTAs.

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This paper deals with the agricultural production structure and policy in the 1990s around the rice policy reform. (1) Rice problems and paddy agricultural problems are grasped in the framework of food problems and dealt with in the historical development of food problems. For developed countries the 19th century was the century in which the main theme of food problems was how to satisfy the hunger of the stomach with starch (cereals, potatoes, etc.), and the 20th century was that in which the hunger of the stomach for animal protein was satisfied with milk (milk products), eggs and meats. It is important that major developed countries such as Germany and the USA have reached this stage through the establishment of self-sufficiency of feed stuff, but that Japan has only succeeded in the satisfaction of hunger with animal protein and failed in the establishment of self-sufficiency of feed stuff until today. (2) Rice problems are analyzed from the viewpoint of structural problems with much concern for the total process of production, distribution and consumption of food. (3) It is strongly emphasized that the 1990s are the turning point decade in comparison with the 1980s within the problems of food, rice and agricultural structural changes. The tendency of food consumption was orientated toward Americanization until the end of 1980s, but toward re-Japanization in the 1990s in which a new type of takeout and restaurant chain plays an important part. In spite of these changes in the 1990s, the rice production structure remained unchanged and was orientated toward high quality production but not low price production. (4) Based on the analysis of development hereinabove, ten implications are mentioned in regard to the fundamental idea of paddy agricultural policy.

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Since the period of rapid economic growth, Japanese agriculture has increased its productivity considerably, driven by the market mechanism. The agricultural structure has suffered unprecedented change in this process. This study investigates three points. First, how have the agricultural cooperatives been supporting farm households involved in the drastic change? Second, what can agricultural cooperatives do for sustainable agricultural development? Third, what type of agricultural cooperative is desirable for supporting the realization of new agriculture?
Study results are the following. First, the government has intended a small number of large-scale farm households to take on the major share of the production. On the contrary, the agricultural cooperatives have aimed to keep the current number of farm households. This means that the agricultural cooperatives in our country were based on "the autonomous village," and they should realize "the logic of village"; that is, a farm household must be maintained as a farm household.
Second, it seems to be difficult to upsize the scale of farms as the government intended. In the meantime, the maintenance of farm households that is the agricultural cooperatives' aim also faces difficulties because of the shortage of core farm households in a community. In the background, there is a serious decline of core farm households in Japan. Unless we consider an alternative way which enables the survival of agriculture, the national economy will fail to maintain agriculture.
Third, the government and the agricultural cooperatives have positively promoted environmental conservation agriculture recently. They are basically aiming at a decrease in the use of pesticide or chemical fertilizer. This is not a method for utilizing the full potential of agriculture. It is necessary to convert the base of our society from fossil energy to renewable energy in order to solve global warming and to realize a sustainable society. Agriculture could supply the renewable energy, and therefore it could greatly contribute to this conversion.
Fourth, if agriculture is to play such a role, it is necessary to construct a new social system. The agricultural cooperatives have the potential to do this. In the present "multi-purpose agricultural cooperative form", however, the consciousness of the membership is low, and the business management is not efficient. Drastic reforms of the organization and business are necessary in order to contribute to the construction of the new social system. I propose a network-type of agricultural cooperatives.

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Consumers demand stable procurement, a reasonable price, safety, and the proper and sufficient labeling of food. The consumer has continuously been faced with many questions and concerns about food safety for example concerning BSE, and bacterial or chemical contamination. The government has improved the policies corresponding to such consumer demands.
The keynote of policy development is the establishment of a system which guarantees food safety on one hand, and deregulation on the other in line with the globalization of the food system. Briefly, in recent years the food system has become more and more global with increasing importation of farm products and food.
However, the system of the food-sanitation inspection cannot deal with the increase in imported food and this worries the consumer. To offer the consumer safe, high-quality food, a part of food industry, primarily the food service industry such as restaurant chains, has entered into farm production. Moreover, to promote it, further deregulation of the revision of the agricultural land law etc. has been investigated and carried out.
However, when deregulation, that is, the introduction of market mechanisms, is adopted, the monitoring and the exposure of an illegal act must be put into effect in order that the market mechanisms will work normally. In the process of deregulation in our country, the measures for this are insufficient.

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