Abstract
The study of formation and effective development of agricultural cooperatives in rural areas is of particular importance in the context of improving the legislative and legal mechanism for increasing the competitiveness of agricultural industry, effectiveness of mutually beneficial economic relations, and promotion of cooperative processes in agro-industrial production. The goal is to substantiate the need to optimize the system of state regulation and support for agricultural cooperation. Methods – analytical, monographic, comparison and generalization. Results show the problems that make it difficult to unite small forms of farming in rural areas: low labor productivity, limited access of farmers to technical and information resources and services, lack of modern equipment. The authors note that regulatory governance and oversight, financial support, advisory services and training are needed. Conclusions - cooperation of medium and small enterprises is the only opportunity to produce a modern and competitive product comparable in cost to the products of large agricultural producers. They are of great socioeconomic importance, since they provide employment to a significant number of villagers, contribute to their effective functioning in a market economy through the expansion of agricultural production, the growth of competitive potential, which facilitates entry into the market, ensuring the profitability of business entities, and allows solving issues of import substitution and development of the infrastructure of RS, improving the level and quality of life of the rural population. Such cooperatives adapt their operations to agricultural technological innovations in the use of fertilizers, growing crops and livestock, agricultural mechanization, and the use of new resource-saving energy sources and communication systems. Small farms united on cooperative principles can fully demonstrate their inherent advantages in the future.