When news went out that only 10 babies were born in the local elementary school district in the past year, leaders of this village realized that the problem of Japan's dwindling youth population was suddenly theirs to solve. If not enough babies are born to fill out a government-required quorum for each class--the minimum is nine students--the village's 130-year-old Onoda school will have to combine the first and second grades when this year's crop starts classes.

So to attract young couples--and hopefully students--this village 100 miles northeast of Tokyo proposed something dramatic in land-precious Japan: It would offer housing plots at giveaway prices to a specified number of families that move here with young children or proof of a blossoming pregnancy.

"It's a brilliant idea," said Koichi Fujita, a trim, salt-and-pepper-haired man in blue jeans who owns the local Esso gas station and leads the volunteer fire squad. "It helps with everything--more students for the school, more customers for businesses, and more volunteer firefighters."

Although the solution here is unusual, the problem is not. Japan's birthrate is declining so precipitously that people are fretting--only half-jokingly--that there will not be any Japanese left in another 150 years. For the near future, the issues are economic and social, much as in the United States, with huge social security payments to be funded by a rapidly declining work force.

More than 70 families--10 times the number that can be accommodated--have called to inquire about Higashimura's land, a strip about 525 feet long and 45 feet wide along a country road with a forest on one side and rice paddies on the other. It will be divided into plots for seven houses, each offered for about $45 a month for 15 years to any family pledging school attendance. After 15 years, the family gets the land free. The lucky applicants will be chosen in December.

Onoda school is a short walk away from the houses--less than you'd have to walk to change trains in some Tokyo subway stations, remarked Naoto Suzuki, head of the village planning department. And the yearly rent is about the same as the monthly rent for a one-room apartment in Tokyo. It would cost around $30,000 to buy such a plot of land in the area.

This village of 6,150 people in a rice and fruit-growing region has not been short of ideas to encourage families to have more children. Its monthly bulletin profiled an ideal father spending the day with his children and won a national award for the story. It built a new library stocked with 4,500 children's books and published a calendar with a photograph of a local child on each day of the year.

The village also promoted itself to families by digging out a hot spring to build a small resort and community center, with tennis courts, a swimming pool and an archery hall. It even revived a 300-year-old rice eating contest and is installing a bungee jump. None of this reversed the steady decline in the number of children as the village's population aged, but that is about to change, villagers hope. The success of their scheme, meanwhile, is also their headache as they choose among applicants to join the community. Who will really stay in the village? Who will take part in such village activities as the annual drainage ditch cleaning to make sure water flows smoothly into the rice paddies?

"In the end, it comes down to how to maintain harmony with the village," said Yoshitada Komatsu, chairman of the village council. "It might be better not to have a long commute in order to spend more time in the village."

But they expect the newcomers will have to drive to one of the nearby towns for work, as many people in the village already do. Less than a quarter of the residents are farmers; the rest are divided between service jobs and manufacturing.

Suzuki is aware that some people will want to rent the land cheaply for a few years and sell it. The village is hoping the land rental contract will prevent that, at least for 15 years. "Anyway, at that point the kids will have gone through our schools," said Suzuki.

Ayako Haga, the local librarian, said one reason for the village's declining birthrate is the lack of help for working mothers. "A long time ago it existed; people raised kids in the village together," she said. "Unless society can help each other out, women won't want to have lots of children."

The conclusion drawn by Suzuki and his colleagues at the village office was that the only solution was to bring in more households.

"Higashimura is a good place to raise children," said Minoru Suzuki, 31, who works with Naoto Suzuki [no relation] in the village office, and who says he hopes to marry soon.

Suzuki has been writing news releases to inform the village of progress on the school problem. The school was renovated just seven years ago, but every year there are more graduates than first-graders.

"With 10 students in a grade level, they can't even form two baseball teams," said Naoto Suzuki, who went to Onoda Elementary School when there were so many children they had to add classrooms.

Staff researcher Akiko Yamamoto contributed to this report.