The purpose of this article is the scientific substantiation of the ways and mechanisms of the transformation of a part of households in the family farms.

Theoretical and methodological basis of the research is the work of domestic and foreign scientists on the organizational features of family farms in Ukraine. As a result of the study, modern methods of general scientific and economic knowledge of socio-economic phenomena and processions were used: historical and monographic, dialectical, abstract-logical, graphic, and others.

Modern processes connected with the integration of Ukraine into the European Economic Area determine the peculiarities of the organization of agricultural activity. Thus Ukraine's accession to the European Union implies agricultural production on a commodity basis, which will not only lead to the impossibility of selling on the official channels of production of manufactured products of households, including personal ones, but also additional costs due to the inability to receive state aid for management, the forced transfer of this form to other organizational and legal forms of management, or the sale or transfer of long-term lease of their land plots, payment of pc afiv, penalties and other unforeseen expenses.

Conversely, the transformation of a significant part of the economy of the population into an economy that will produce agricultural production on the basis of entrepreneurial activity will allow not only to become involved in obtaining financial support and to improve the social security of members of rural households, but also significantly reduce the amount of taxation by taking into account the production costs of wages, deductions to the pension fund, taking into account the cost of sales of manufactured goods, etc.

The essence of the family farm and its advantages are analyzed. The main ones include:

1. Significantly higher selling price, compared to personal peasant farms or other forms of non-entrepreneurial activity, on products produced at the farm.

2. Sale of manufactured products not only on processing or purchasing enterprises, but also on other channels of sales.

3. Fixed amount of tax payments and simplified reporting to fiscal authorities.

4. Possibility of obtaining additional funding at the expense of state and local budgets.

5. Possibility of obtaining loans for the development of economic activity at the expense of receiving foreign grants, loans and assistance.

6. Ability to form commodity batches for sales of manufactured products.

7. Compliance with European standards for agricultural production.

8. The settlement of economic relations, which will affect the distribution of income, as well as the social security of each household member.

The shortcomings of the family farm were identified:

1. Increasing the cost of production costs due to the need to comply with European standards for agricultural activities.

2. Necessity of quarterly deduction of taxes.

3. Increase in taxation in the event of the provision of a family farm to lease land.

4. A narrow specialization of conducting economic activity and, in the future, the quota of volumes of production of agricultural products.

5. Incomplete or incomplete financing of measures at the expense of the sources specified in pp. 4-5 advantages of the subject of entrepreneurial activity.

6. The need for reporting to the fiscal authorities and, in this connection, possible unplanned expenses.

The process of creation of a family farmer is expedient, which it is advisable to begin with the definition of its organizational and legal form, since in the case of registering a farm as an individual entrepreneur, his head should hire family members for labor contracts and pay monthly wages. At the same time, the advantage of functioning of the specified organizational-legal form is the possibility of individual management of the economy with the exclusive right of the head on the redistribution of the results of production activities.

It is established that the modern challenges faced by households lead to the need to find ways to further their development. One of the areas of this development is the conversion of households to family farms. At the same time, such farms can acquire organizational and legal forms in both the legal status and the individual entrepreneur. The main stages of such transformations are highlighted.

Key words: family farms, personal peasant farms, farms.