In the conditions of administrative and territorial reform, the development of small towns becomes more relevant, because according to the methodology of forming capable territorial communities, it is determined that communities should be formed around the cities-district centers, most of which are the small towns. In such conditions, one of the primary tasks of the local self-government bodies is the development of the strategy for territorial communities and small towns, which primarily involves determining the priority directions of their development and is a systematic process aimed at solving the most urgent local problems, realizing the socio-economic potential, increasing the efficiency of the use of available resources, which will ultimately contribute to the development of small towns and the growth of their role in the development of the regional economy. The purpose of the article is to determine the strategic priorities of the development of small towns in the conditions of administrative and territorial reform and decentralization. The analysis proved that in the conditions of administrative and territorial reform, small cities, acting as the centers of newly formed territorial communities, are in the focus of increased attention of scientists and experts that require the development of an effective strategy for their development and the determination of priority areas of their functioning. Due to the fact that the most of the small towns are characterized by a monofunctional type of development, in the long-term period, the strengthening of the industrial potential of these towns and the restructuring of the economy should be expected; accordingly, the social development of small towns will depend on the levels and directions of their economic growth. In the conditions of the military crisis and post-war recovery in our country, experts consider the improvement of the system of tax administration in communities to be one of the effective tools for the recovery and modernization of the country. Along with this, one of the integral conditions of the development of small towns is the deepening of intersectoral partnership between the government, business and the public sector, and the development of innovative entrepreneurship. In the conditions of decentralization the small cities are an important component of the socio-economic development of communities and regions, which requires increased attention to the development of an effective strategy for their operation, the determination of priorities for their development in the long term period, which involves strengthening of the potential of small cities, deepening partnership relations between various entities management, improvement of the local tax administration system, reorientation of industrial production to an innovative type of development. 

small cities, strategic management, strategic development, innovative entrepreneurship, region, decentralization, local community 

In industrialized countries one of the major forms of innovation process in agriculture is clustering as an effective instrument of regional development and effective use of entities potential in a market economy. Despite of global trends, the development of the agricultural sector of Ukraine is characterized by number of negative tendencies, agricultural production in most regions is produced by households, which are aimed at ensuring personal needs nutrition and receive additional income in order to survive in difficult socio-economic conditions of rural economies. In this context, the policy of formulation and development of innovative agricultural enterpreneurship based on clustering is an important prerequisite for the effective functioning of the agricultural sector of Ukraine and its regions. The aim of the study is to assess the current trends of agricultural sector functioning and grounding the prospects for its development at the regional level on the basis of the agro-cluster model. To achieve this goal the following methods of research were applied: statistical analysis, comparative method, cause and effect relationships, the method of science abstraction. Was determined that the major producers of agricultural products in Ukraine in the contemporary economy, along with the agricultural enterprises are the households, which operation does not meet the European standards of development and requires the development of modern innovative approaches to improve the efficiency of their management. In order to overcome the main barriers that stand in the way of civilized agricultural market both at central and regional level, the authors developed their own cluster model of the agricultural sector in the region, which involves the formation of a particular area of the closed cycle “production-storage-processing-realization of agricultural products” that are based on integration and cooperation, and includes two main blocks: the first - agricultural producers (households) and the second block, which includes the operation of economic entities that are directly involved in creating the cluster and ensure its effective functioning and are based on the principle of horizontal integration (local governments, the business sector, NGOs, research institutions). The study showed that the agricultural sector of Ukraine is requires the implementation of innovative areas of development, one of which is clustering that involves the growth, development and improvement of the quality of production of small farms in the agricultural sector in the region, increase the competitiveness of subjects for the purpose of entering the commodity markets and the formation of a proper functioning of their environment of their functionality, based on a combination of such basic elements as the implementation of business initiatives, forming a proper investment environment, availability of infrastructure, introduction of innovation and information technology, cooperative production and labor, as a result – maximize the subjects potential of the agricultural market, as a result of the multiplier effect will lead to increasing the efficiency of agricultural production, diversification of the regional economy and improve people’s lives. 

agricultural sector, households, clustering, agro-cluster