Modern transformations in the global economy radically changed the food supply system of the population, necessitating the formation of a new agrarian policy and the implementation of a system of tactical and long-term strategic state measures. Scientifically based economic and agricultural policy is the most important condition for stabilization and effective development of the agro industrial complex, the factor of growth of well-being of the population and ensuring a food security of any state. The main goal of the agricultural policy is to create the institutional conditions that would allow producing a competitive product and enhancing the competitiveness of agricultural enterprises. The authors tried to search the inconsistencies in the implementation of institutional reforms in the agricultural sector on the example of the Russian Federation. Based on works of outstanding theorists of institutional science (A. Pigou and R. Coase), two directions of institutional reforms have been identified. The authors show the distinctions of these directions and possible ways of practical realization of them in the agricultural sector. The problem of weak market power of traditional producers of agricultural raw materials is revealed. The transition to ecological agriculture is able to increase the market power of agricultural producers in the reproduction process that would automatically lead to better balance of income distribution between main actors in the reproduction process, while improving the quality of products for the consumers.

The counter-sanctions imposed in 2014 by the Russian government have led to an artificial reduction in competition through the reduction of competitive pressure from foreign milk and dairy producers. Conditions of supply shortage led to a change in the behavior of milk producers both in terms of production volumes and the quality of the products. This paper describes changes of the Russian milk market on the example of the Moscow Region and the impact on this change of counter-sanctions, market conditions and scale of production.

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