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The publication examines urgent issues of creating favorable conditions for the development of family farms based on the implementation of the theory of institutionalism. The essence and position of the theory of institutionalism in the development of  agrarian relations in rural areas are determined. It is emphasized that industrial relations should be based on the individual, his needs and qualitative growth of human potential in the rural area. The main factors promoting the introduction of institutional principles in the rural economy development are outlined, and the directions and content of institutionally oriented influence on the activities of small businesses in rural areas are justified. The article highlights the author’s proposals on the main directions of institutional support of family farms in rural areas and emphasizes the need to increase the role of the state in the formation of the institutions necessary for the agrarian market, including the instruments of state protectionism.

CONTENT AND SIGNIFICANCE OF THE THEORY OF INSTITUTIONALISM AS A FACTOR OF THE AGRARIAN FAMILY FARM DEVELOPMENT