In order to comments about the controversy over rice policy, we analyzed the present situation of structural change on paddy farming, profitability and cost level of rice production, and strategies on paddy field farms. The main conclusions of this survey are summarized as follows. (1) According to the increase of rented land, some of full-time farming firms expands their farm size rapidly. The size of family farms reached 30-40ha, and agricultural firms which hire full-time employees extended to 50-70ha. In that sense, agricultural structure has been drastically changing in recent years. (2) Large-scale farms are operating their farm-land efficiently, but after 2000 their agricultural income after deducting subsidies went into the red, and the ratio of subsidies to gross income rose to about 40 percent. This fact means that nowadays paddy field farms are sustained by political financial supports. (3) Rice production costs, including general and administrative expenses, of large-scale rice crop farm topped 16 thousand yen per 60kg. This fact means that even for the large scale rice crop farm of 70ha, it is impracticable to deduct the production cost under 30 yen per kg; therefore, we can't foresee the Japanese rice production sector developing as an export industry. (4) Recently many paddy field farms are trying the diversification strategy, and also promoting corporate responsibility as a supplier of food. It is difficult to handle both price support policy and supply control on rice, and maintenance of rigid supply control might require the continuation of a lower level of rice prices. In those situations, direct income compensation is essential for paddy field farms, but considering the above facts, the subsidy will account for the greater part of farm gross income. It is a serious situation for farmers, and likely to exert a bad influence for farmers' consciousness and behavior as economic units. Therefore, a cross compliance system will be needed for direct income compensation to keep the farmers' minds on rational farming behaviors. In addition it is important to increase the productivity of dry fields crops cultivated on paddy fields through land improvement and geographically arranged accumulation of rented land.