The article considers the definition of an institution proposed by various scientists as a basic concept in institutionalism, offers its own definition of this category, explains the content of the term institutional environment, builds a scheme of the institutional environment of organic production, which is divided into formal and informal frameworks. Formal ones include the Constitution, laws, procedures, orders and resolutions; the Labor Code; The Land Code; administrative responsibility; state support; tax obligations; requirements for the production of organic products; state control (supervision); certification; labeling of organic products. Informal ones include customs, traditions, culture; education and science; public opinion; moral values and ethical principles; Corporate Social Responsibility; Environmental Responsibility. Attention is focused on the interpretation of each element, as well as the influence of the institutional environment on the development of each economic entity is proved.