Economic reforms in the agrarian sector led to radical changes in it. As a result of structural changes that took place in this sector economic stratification had been generated; different forms of ownership started operating and market relations began to develop. Under these conditions, there is a need of scientific study of the role and functions of legal forms of entities in creating the country's food resources and perspectives for its further development. Also in many positions patterns of social relations and the private sector economy had been changed that prevailed earlier.

A thorough study of the economic nature of personal peasant farms had been made by the author, the results of which caused considerable theoretical and practical interest solely due to the fact that these agrarian formation, on the one hand, is a classic form of small (consumer) farming and the other one is that they are the most consistent, meaningful and complete form of family farms.

The author found that the economy is based on the personal estate of the farmer with all the farm buildings and structures, as well as land, livestock, poultry remained in this economy. Private rural farming as a mini-commercial complex was established in ancient times. The land that was in the possession of the farm had been divided into land and field plots.

A thorough analysis of the historical aspect of the appearance and operation of the subsidiary management and arrangements for its functioning had been conducted by the author.

The formation and development of the category of "private farm" in the economic literature and interpretation of various economists and researchers had been studied in the paper. Furthermore the author proposed his own interpretation of the concept. It is proposed under the individual peasant households to understand the form of small-scale agricultural production by citizens for personal (family) consumption on the farm and other land areas provided for this purpose for their leisure time. Farming is a legal form of business activity both at individual (family), and a small group basis. It should be the main activity for at least one member of the peasant economy (the owner) to be maintained.

The author proved the unreasonableness of categories differentiation in the economic literature such as "private farm" and "family farms" and the main reasons for this distinction had been presented which included that features of family farms were connected with running your own household, performance of social everyday functions and agricultural production as a single, unbroken and constantly renewable process for family life support.

Families with such farms differ from other rural and urban residents with a special way of life supported by an absolute mandatory daily performance of family business operations and activities in terms that correspond to the biological rhythms of the natural environment and pets.

To the author’s mind it is a mistake when under the concept of "private farm" subsidiary farms and rural farming conducting an independent household are united. This association allows some categories to avoid agricultural commodity taxes.

A similar situation exists with regard to the interpretation of the term "households" where the concept of a combined several categories of agricultural producers resulting in incorrect interpretation of statistical data, etc.

It is proposed to use a single name "personal peasant farms" and the criteria for inclusion of private farms in this category are described.

Key words: personal farm, farms, family farms.