But 47% of potential claimants are missing out, claims a report by the Federation of Small Businesses (FSB).
Small rural enterprises are entitled to 50% relief on their business rates under a Rural Rate Relief scheme.
The scheme also gives local authorities discretionary powers to grant up to 100% business rate relief.
But the FSB said many local authorities were failing to offer significant relief above the mandatory 50% to half of all small village firms.
This could mean the difference to those firms between survival and closure, it warned.
Linda Walton, RSB rural affairs chairman, said: "Every week we hear of the death of village shops and pubs.
"Yet the Rural Rate Relief scheme, which was specifically set up to help these rural businesses, is being chronically underused."
The closure of Village shops and pubs often devastated local communities, said Ms Walton.
The FSB report, A new approach to the rural economy, was published on Monday (6 July).
It calls on the Treasury to make more funds available so local authorities can grant 100% rate relief for a fixed period of just 12 months to help village business weather the downturn.
The document outlines various actions the government could take to help relieve rural business problems and bolster the rural economy.
- A planning system that encourages the development of a vibrant and diverse business community in the countryside
- Incentivising local authorities to encourage tourism
- Greater fiscal help for our rural small businesses
Up to 500 village shops and more than 670 rural pubs closed each year, Ms Walton said.
Yet the Rural Rate Relief scheme was not being fully used to help save these businesses, which formed the heart of village life.
Some 44% of respondents to an FSB poll said they relied on a sole pub, shop, post office or petrol station in their area.