Taiwan is located in the subtropical area of the Far East. With the benefit of suitable weather, average temperature just under 71 F in the north and nearly 76 F in the south, and with the yearly precipitation around 75 inches, rice has been the self sufficient staff crop in Taiwan. Even in the early eighteenth century, Taiwan exported rice to support the supply in Mainland China. Rice is a necessity for Taiwanese. A sufficient supply and stabilization of its price are relevant to the whole economy and society. Because of the development of industry and economic growth, a lot of cultivated land has been transferred from rice production to industrial or architectural utilization under the principle of comparative advantage since 1958. The benefit per hectare for industrial utilization is much higher than that of rice production under some circumstances. Therefore, the production area of rice changes annually are at a different rate. The major purpose of this study is to analyze rice prices in Taiwan. The market mechanism still prevails even with government intervention. It is not a study to examine or evaluate existing rice programs or policies, but rather an analysis of the equilibrium demand and supply relations according to the economic theory and to predict prices from equations specified to define these relations.