This paper aims to make clear the historical characteristics of the farmer and farm village economy and the policy at the beginning of twentieth century. Especially it was picked up as a case study of the farm villages in Chugoku mountainous district. In this time it was nation widely investigated the actual condition of farm villages and farmer economy and its promotion. It was called the local improvement movement, “Chosonze”, in Shimane Prefecture “agricultural investigation document”, called Nojichosahokokusyo. In this paper it is analyzed３farm villages in Shimane prefecture, Ohchi gun selected. It comes to the conclusion that the traditional iron industry, called “tatara” and the charcoal industry declined but the earnings of new transportation by the maintenance of road and working away from home were appeared. However, it still wasn’t seen with the promotion of new agriculture such as sericulture business and the charcoal industry and side business.