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Rural areas in industrialized countries have seen major structural changes in the last 50 years, which have fundamentally influenced living conditions. Decreasing incomes and employment opportunities, closure of shops and schools and reduction of services and public transport are some examples of the outcome of these changes. Farm tourism has often been proposed as a sustainable development option to revive rural economies and to diversify income sources, largely building on endogenous growth potentials. Investigating this hypothesis, the article describes the development, structure, organization, and characteristics of farm tourism in Sweden. It analyzes whether farm tourism can be a sustainable economic activity and assesses its potential to address the structural problems of peripheral areas in Sweden.