Abstract
It is proved that the effective development of small farms is ensured by the level of their resource supply and the balance of production resources, the efficiency of which we have been carried out on the basis of the calculation of allocative and technical efficiency. According to the obtained equation of production function, we conclude that the most elastic factor is the cost of seeds, fertilizers, feed and other material costs. An increase of this resource by 1% will lead to an increase in the result by 0.395%. The smallest value of the coefficient of elasticity was obtained from such production resource as arable land. The obtained model shows that there is a decreasing effect on the scale, since the sum of the regression coefficients is less than 1 (equal to 0.962), which means that if the resources increase in some proportion, then the volumes of revenue increase in a smaller proportion. It is substantiated that allocative inefficiency is caused not by the excessive use of resources in small farms, but by the higher prices for them and the underestimated agricultural output.