The present paper discusses pacing institutional factors for ensuring the sustainable rural development as a cornerstone of socioeconomic wellbeing. Systematic problems rural population continually faces in the presentday living environment are identified: the sustained reduction in the number of manpower employed in the agricultural industry, the decline in living standards of the rural population, the environmental deterioration. It has been ascertained that the crucial institution of the agro-industrial production is a family-based production; therefore, the wellbeing of rural areas strongly depends on the degree of family farming development in Russia. The paper specifies institutional peculiarities of the Russian family farming. Among them we can mention: the integral institutional system governing the functioning of family farms is still being established, the family farming functions on the foundation of specific human capital assets, the family farming basically relies on the labor of its owners, the family farming heads so far exhibit insufficient experience and differences of their social status, the structure of land resources used by family farms is notably heterogeneous and varying, the prevailing strategy of the family faming lies in enhancing economic efficiency through withdrawal of investments, family farms face problems of selling their products as they continually come in conflict with distributing trade networks. In conclusion, the necessity for institutional changes in the business environment of family farms is substantiated.
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