The common agricultural policy of the EU is more and more focusing on rural development and income support to farmers rather than on producing agricultural products. Funds are also directed towards projects with the intention of encouraging enterprising and of creating employment in rural locations. EU-funds as well as national budget funds are used with the objective to achieve an economically, ecologically and socially sustainable development in rural areas.

The focus on rural areas in various contexts is the reason why SLI finds it important to analyse the pre-conditions for rural development and the measures aimed at stimulating this development.

Is there a need for a specific rural policy and for specific measures for rural areas – is the development of rural areas a priority? Is there a need for specific measures to develop and conserve activities in rural areas or are general policies better aimed at generating activities in rural areas? And finally, does a positive development in rural areas create national growth or is growth in rural areas at the expense of other parts of the country?

The main purpose of this report is to analyse the connection between the existence of agriculture and the economic development in rural areas. First, concentration patterns and the factors explaining these patterns are analysed for Sweden since the beginning of the 1990s. Then, specialisation in municipalities and the importance of agriculture is analysed and finally the connection between the existence of agriculture and municipal incomes is analysed.