The paper describes the current level of small farm business development in the Russian Federation and the Republic of Bashkortostan. The existing regulatory framework provides a wide range of measures to implement state support for the agricultural sector. The state aid mechanism and influence on the efficiency of agricultural production in microenterprises, budget efficiency, the need and prospects for directing budget funds for the development of small agricultural businesses are considered. The Bashkortostan Republic’s agricultural industry and perspective small farm business development in the region are assessed. The efficiency of allocating budget funds of the region’s consolidated budget is calculated.

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Purpose:The research goal is to evaluate the state support efficiency in agriculture through the development of small businesses. Design/Methodology/Approach: The paper considers the mechanism of state support for small agricultural businesses and its impact on the efficiency of agricultural production in different categories of farms, budget efficiency, the need and prospects for directing budget funds for the development of small businesses in agriculture. Farms are divided into groups depending on the marginal revenue. Findings: The efficiency of allocating budget funds of the consolidated budget is calculated. The paper describes an original approach to providing conditions for the long-term development of small businesses in agriculture. Practical Implications: If Bashkortostan continues to support the agricultural sector, the government can promote small farms and achieve sustainable growth of agricultural production by 2025. Originality/Value: Small business development in agriculture must take into account not only the scale of production but the industry specifics as well that depends much on climatic conditions and soil fertility. These factors are of particular relevance for state support considerations and economic performance.