In Japan, the direct payment scheme for mountainous areas was introduced in order to enhance multifunctionality of less-favored areas in 2000. A comprehensive ex post assessment showed that the scheme effectively contributed to prevention of abandoned cultivated lands, maintenance and enhancement of multifunctionality of agriculture, continuous assistance for agricultural production, and revitalization of community. In 2005 a second round of the scheme started and urged encouraging core farmers, improving productivity, and reinforcing inter-village coalition as to promote autonomous and sustainable rural economies. A new different scheme such as 'measures to conserve and improve land, water and environment' was launched for strengthening conservation and management of rural resources over all areas in 2007. It covers one third of paddy fields with regards to maintenance of water facilities and practice of group eco-farming beyond less-favored area. A lot of public programs have been developed for rural revitalization recently. Additionally some have a complementary role to enlarging cultural multifunctionality in rural societies. We could interpret the institutional progress as an evolutionary path of rural development and environmental schemes for the past decade. Much experience of community works through the direct payment scheme for mountainous areas may have resulted in accumulation of social competence for elaboration of rural management..

In the rural communities in less-favored areas (mainly hilly and mountainous areas) in Japan, the number of settlements which cannot maintain the community functions by themselves has been increasing because of the progress of depopulation and aging, so the necessity for achieving mutual supplementation of the community function by the settlement reorganization has been increasing. This paper consists of the following three points. 1) General view of settlement reorganization policy in Japan. 2) Case study of the T district in Japan. 3) Possibility of the settlement reorganization by the policy measures which obligate community members to work together. Main results are as follows. 1) There are several settlement reorganization policy measures, but many are still the model project stage, and not yet spread, so it is necessary to wait and see how these measures will develop. 2) The number of the residents of small-scale aging settlements who do not hope for the reorganization, nor feel the necessity of reorganization shall not be few. This will make great difficulty in the settlement reorganization process. 3) A local area activity promotion conference which derives from a former administrative unit like a former village has many functions to the settlement reorganization. 4) In the rural communities in less-favored areas, the policy measures which obligate community members to work together have widely spread. These are expected to play the supplemental role for the settlement reorganization. It is necessary to discuss among residents the activation plan and the future vision of the community, as well as to discuss the settlement reorganization.

It may be said that a farmer's crisis deepens from the number of farm households and a trend of the number of cultivated land of the farmer attracting attention for the most fundamental numerical value of the Census of Agriculture 2005. A rate of decline of number of farm households seems to have been stopped, but expansion lasts a number of farm households rate of decline. I can, so to speak, watch weakening of flatland area and luck of mountainous areas and a situation to say if I look in that according to classification agricultural area. I can nominate the effect of a direct payment system for farmers in hilly and mountainous areas enforced in 2000 for the background. It is located in case of the policy introduced preceding it while the rural community and the community including the urban area being paid attention as the last resort of a regional reproduction now. In particular, the character as the village activation subsidy has been strengthened in case of the 2nd stage institutional revise.

The purpose of this study is to define the concept of Hilly/Mountainous and Less-Favored Areas from the viewpoint of agricultural infrastructure, and to establish selection criteria and categorize of that areas. Using three type guidelines which were the rates of forest(above 50%), farmhouse population(above 50%) and infrastructure improvement(below 50%), the regions of 605 Eup Myon were selected to Hilly/Mountainous and Less-Favored Area. And for applying to regional development planning, the legions of eup myon were classified 4 types using average of the rate of forest and aged farmhouse population(75%, 17.5%). To conserve the farmland in Hilly/Mountainous and Less-Favored Areas, it requires continuous research on systematic approach method. Especially, it is necessary to investigate a development formula according to farmland scale and desolated degree through analysis of the actual condition of farmland.