In Western Europe, USA, and other developed countries agriculture is dominated by small family farms. In Central and Eastern European Countries (CEEC), and Former Soviet Union (FSU) dual structure of farms exists. There are large corporate farms (CF) and small family farms (FF) in CEEC and FSU. Our paper shows that both CFs and FFs specialize in commodities in which they have comparative advantage. CFs specialize in capital intensive products and in products with low labor monitoring. FFs specialize in products with higher labor monitoring requirements. The results of the research shown in this paper prove that farm structure determines the products of the country which will be competitive on international markets. This is especially important for transition countries, where high transaction costs hinder the change of farm organization. For this reason the choice of product structure in transition countries suffering from high transaction cost is more important than the choice of farm organization.