The objectives of the current study are to analyze the rice market, to suggest the optimal levels of rice stocks which will minimize the impacts under trade liberalization, and to evaluate the possible impacts under such policy adjustments. There are several conclusions we can derive from the empirical analysis results:1. The estimated policy weights of rice producers were relatively low before the 1974, comparing to other pressure groups, but showed an increasing trend during the past forty years. It was estimated, however, the weights of producers would decrease gradually in the future due to trade liberalization. 2.According to the optimal control model, the suggested optimal levels of rice stocks are 817,710,607, and 514 thousand metric tons each year during 1997-2000. 3.The policy simulation results revealed that the second crop of rice production in Taiwan will become insignificant in the future under trade liberalization, and the offical purchase program will be adjusted to support mainly on the first crop.