As farms are consolidated into larger operations and small farms close down for economic reasons, rural areas lose ecological, social and economic functions related to farming. Biodiversity and scenic, open-vista landscapes are lost as fields are left unmanaged. Social and economic benefits such as local job opportunities and meeting places disappear. Four Swedish rural communities were examined to increase our understanding of the functions that a diverse agriculture provides and which of these are lost as farms cease operation and overall rural social capital is depleted. Workshops and interviews with village action groups and with farmers were carried out. Both groups identified key functions from farming that are important to the rural community, such as production of food and fiber, businesses and jobs, human services, local security, ecosystem services such as nutrient cycling and biodiversity, and functions pertaining to quality of life. Several ways in which village action groups can support agriculture were identified that current industrial agriculture and even agri-environmental schemes fail to achieve. These include organizing local meeting places, encouraging local processing and consumption and supporting farmers in their work. We conclude that agriculture and village action groups match well in community development and that policies supporting this match would be useful.