FARM REQEEMSBN ENTERPRISES 5N SOETHERN
MECHEGAN

Thesis for the Degree of M. S‘
firiéCHiGAN S‘E‘ATE UNWERSETY
£0H‘N LEWIS SEW
1967

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ABSTRACT

FARM RECREATION ENTERPRISES
IN SOUTHERN MICHIGAN

by John Louis Okay

The purpose of the study was to investigate the
effects of the establishment of recreation enterprises
on Michigan farms in terms of adjustments in organiza-
tion and resource allocation.

The study attempted to determine (1) the number
and types of rural recreation enterprises in Southern
Michigan, (2) changes in off-farm employment patterns
for recreation farmers, (3) changes in land use and
production, (4) changes in the use of family and hired
labor, (5) the contribution of the recreation enterprise
to family income, and (6) financial problems of estab-
lishing a farm recreation enterprise.

Four enterprises were studied: golf courses,
riding stables, camping grounds, and fishing waters.

The data were obtained through interviews with twenty-
eight farm recreation enterprise Operators in a twelve
county area in Southern Michigan.

Farm recreation enterprises comprise a small part
of the total supply of privately owned outdoor recreation.

facilities. Over one-third of the riding-stables and

-2-
John Louis Okay

hunting areas, however, are owned by farmers, and in-
creasing numbers of farmers are becoming involved in
recreation as a business.

The development of a recreation enterprise did
not affect the off-farm employment pattern of farmers.
Those who did have an off-farm job had‘been so employed
even before the recreation enterprise was established.
While recreation was not a factor in the shift to off-
farm employment, several of the part—time farmers did
develop the recreation enterprise as an eventual sub-
stitute for the farming operation.

Major land-use changes occurred on some individual
farms as the result of developing a recreation enterprise.
There has, as yet, been no substantial affect on the
total land-use pattern in Southern Michigan.

The farm family provided most of the labor used
in the recreation business. Labor requirements in most
enterprises were high, and coincided with the busiest
months on-a farm. Some operators expressed dissatisfac-
tion with the long days and busy weekends that accompany
a recreation business.

The recreation enterprise, in general, provided
only supplementary income to the farm family. In just two
cases it was the sole source of family income. Income

data, while somewhat incomplete, indicated that low returns

John Louis Okay

from the recreation business aretcommon. This seemed es-
pecially true for those enterprises which had been in
operation for four years or less. Some improvements in
net returns are expected once the development stage is
passed.

Farmers experienced little difficulty in finan-
cing a recreation enterprise. The majority were
developed slowly, with new investments covered by
current income. The low incidence of credit use was
due in part to the fact that no farmers purchased addi-

tional land for use in the recreation business.

FARM RECREATION ENTERPRISES
IN
SOUTHERNrMICHIGAN

by

John Louis Okay

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE

Department of Agricultural Economics

1967

ACKNOWLEDGEMENTS

To Dr. L. L. Boger and the members of the Depart-
ment of Agricultural Economics I express my appreciation
for the financial assistance which made possible this
research and my degree, and for the intellectual environ-
ment which has made both worthwhile.

Special appreciation is expressed to Dr. John R.
Brake, my major professor and thesis supervisor, for
his encouragement and counsel during this research and
throughout my graduate program.

Appreciation is eXpressed to Dr. Milton H.
Steinmueller, Department of Resource Development, for
his kind assistance at various stages in this research
and for guidance in my graduate program.

Special thanks go to Dr. Ralph Hepp for serving
on my examining committee, and to Dr. Ralph A. Loomis
for his suggestions and inspiration during the early
stages of this investigation.

Thanks are also extended to the members of the
secretarial staff who provided valuable assistance.

Special recognition goes to my wife, Judy. Her
patience, understanding, and encouragement substantially
lightened the burdens of graduate study and contributed
immeasurably to the culmination of this work.

ii

TABLE OF

Acknowledgments........

List of
List of

List of

Chapter
I.

II.

III.

IV.

TableSOIOOOOOOO
Illustrations..

Appendices.....

THE STUDY.....

Introduction..
Objectives....

CONTENTS

Procedure...OOOOOOIOOOOOOOOOOOO

A PROFILE OF SOUTHERN MICHIGAN.

Introduction...................
Agriculture.....................
Population and Other Demand Factors.
Farm Recreation Enterprises........

ESTABLISHING A FARM RECREATION

ENTERPRISE ..... OOOOOOOOOOOOOOO

Introduction..................
Why a Recreation Enterprise?..
Farming Experience............
Assistance in Establishment....
Recreation Investments..........
Financing Farm Recreation Developments.
Land-Use Adjustments..................

OPERATING A FARM RECREATION ENTERPRISE.

IntrOductiOnOOOIOO0.000.000.0000...
Labor useO'OOOIOOOOOOOOOOOOOOOOOOOOO

Recreation Contributions to Family

IncomeOOOOOOOOOOOOOOOOOOOOOOOOO...
Other Sources of Family Income.....
Recreation Income...................

Income Data Problems...............

Plans for the Future...............

iii

Page

ii

viii

ix

\10H

12

12
12
18
21

25

25
25
29
32
35
39
42

49

49
49

57
59
62
65
66

Table of Contents continued

V.

SUMMARY AND CONCLUSIONS.
APPENDIXAOOOCOOOOOOOOOO
APPENDIX]34.............

BIBLIOGRAPHYOOOOCOOOOOOO

iv

Page
69

81
88

94

Table

IL.

10.

LIST OF TABLES

Page

Number of commercial farms, total farms,
acres in farms, and total acres, Southern
Michigan, 1964. I3

“Decrease:inrnumberwéfttotal"farms,“commer-

cial farms, acres in farms, Southern
Michigan and the State, 1959 to 1964. 14

Farm operators who worked off the farm
100 days or more, Southern Michigan and
the State, 1959 and 1964. 16

Total, urban, and rural population,
Southern Michigan and the State, 1960. 19

Number of private outdoor recreation
enterprises by type, total and farm,
Southern Michigan, 1966 22

Distribution, by farm and recreation

enterprise type of full-time, part-time,

and retired farmers for a sample of farm
recreation enterprise owners, Southern
Michigan, 1966. 31

Assistance in business establishment by
enterprise type for a sample of farm
recreation enterprise owners, Southern
Michigan, 1966. 33

Sources of planning and technical assist-
ance for a sample of farm recreation
enterprise owners, southern Michigan 1966 33

Summary of recreation investments by

enterprise type for a sample of farm
recreation enterprise owners, Southern
Michigan, 1966. 35

*Summary recreation investments by full-

time, part-time, and inactive farmers for
a sample of farm recreation enterprise
owners, Southern Michigan, 1966 37

«V

LIST OF TABLES CONT.

Table Page

11. Value of land used for recreation by
enterprise type’fir a sample of farm
recreation enterprise owners, Southern
Michigan, 1966. 38

12. Credit Use by recreation enterprise for
a sample of farm recreation enterprise
owners, Southern Michigan, 1966 41

13. Acre and percentage conversion of agri-
cultural land to recreation use by full-
time, part-time, and inactive farmers for a
sample of farm recreation enterprise owners,
Southern Michigan, 1966. 44

14. Acre and percentage conversion of agri-
cultural land to recreation use by enter-
prise type for a sample of recreation
enterprise, Southern Michigan, 1966. 46

15. Average annual man-hours of labor used
in the recreation business by source and
enterprise type for a sample of recreation
enterprise owners, Southern Michigan, 1966. 50

16. Percent of total recreation labor contri-
buted by owner, wife, children, and hired
workers, by enterprise type, for a sample
of farm recreation enterprise owners,
Southern Michigan, 1966. 52

17. Percent of total recreation labor contri-
buted by owner, wife, children, and hired
workers among full-time, part-time, and
inactive farmers for a sample of farm
recreation enterprise owners, Southern
Michigan, 1966. 54

18. Distribution of recreation income as a
percentage of total family income among
full-time, part-time, and inactive farmers
for a sample of farm recreation enterprise
owners, Southern Michigan, 1966. 57

vi

Table

19.

20.

I‘LISTHOF'TABLES”CONT.

Page
Major Source of family income for full-1'
time, part-time, and inactive farmers for
a sample of farm recreation enterprise
owners, Southern Michigan, 1966. 60

Recreation income statement by enterprise
type for a sample of farm recreation
enterprise owners, Southern Michigan, 1966. 63

vii

LIST OF ILLUSTRATIONS

Figure Page

1. The Study Area........................... 11

viii

LIST OF APPENDICES

A. Definitions of Types of Recreation Page
Enterprises.............................. 31
B. Interview Schedule... ..... ................ 88

ix

CHAPTER I

THE STUDY

Introduction

 

In recent years there has been considerable discussion
relating to the establishment of variousrrecreation.ehtEr-
prises in rural areas. The entire subject of outdoor
recreation underwent intensive study by the-Outdoor Recreation
Resources Review Commission beginning in-l958. When its

final report, Outdoor Recreation For America, was released

 

in 1962, both private citizens and public agencies became
aware of the pressing need for more recreational sites.
This need was shown to be greatest in the eastern one-half
of the United States.

The projections made by ORRRC indicated that much
more land would be needed for recreation, eSpecially in
areas close to population centers. To those concerned
with agricultural problems, particularly those related to
overproduction and poor land utilization, recreation seemed
an immediate answer. They visualized this as a means of
shifting resources from agricultural production while also
providing the greater returns to the owners that are needed
to bring about desired adjustments in resource allocation.

On January 31, 1962, the same day on which ORRRC

presented its final report, President Kennedy sent a message

-2-

to the Congress outlining a.new agricultural program. In
the land conservation and utilization section of the message
he called for new legislation to encourage land—use changes
through expanded payment and cost-sharing arrangements,
more technicaluassistance,.and broader loan policies. The
Food andmAgriculture Act of 1962.as.later passed by
Congress embodied those suggestions and set the stage
for the emergence of private recreation as a new farm
business.
Secretary of Agriculture Orville L. Freeman acted

to implement the new legislation in November, 1962. In a
series of directives he outlined specific duties for vari-
ous agencies within the Department, with the Soil Conservation
Service assigned leadership responsibilities in the area of
income-producing recreation developments on private rural
lands. The SCS was to assist the other specified agencies
in carrying out the Department's policy in this area, which
was to:

Use all available authorizations to encourage

and assist rural landowners and operators and

local organizations to develop hunting, fishing,

and other recreational facilities as income-

producing enterprises as part of a conservation

plan for the entire land unit.

Enlist the cooperation of public and private

agencies and organizations that can help land-

owners and Operators in developing such under-
takings.

-3-

Implement income-producing recreation develop-
ments through Farmers Home Administration
loans to family-farm operators for establish-
ing recreational developments to supplement
'farm"income,'and‘to groups of farmers and
rural residents for recreation facilities
related to shifts in land use.

Provide through appropriate agencies research,
education, technical assistance, cost-sharing,
and credit services needed.in develOping in-
come-producing recreation on rural lands,
including strengthening Rural Areas DevelOp-
ment committees and technical action panels.

The full resources of the Department of Agriculture
were thus mobilized in order to foster recreation enter—
prises on private rural lands, and not without success.

Undoubtedly, the unusually great interest in
recreation development possibilities exhibited
by farmers and owners of rural lands was
largely generated by the publications and
efforts of Department of Agriculture person-
nel. The new farm recreation development
policy they began - . . created a nation—wide
enthusiasm for conversioa of agricultural
lands to recreation use.

If more encouragement was needed it.was~provided by

the popular farm press which reported the.success stories

 

a

1"." ~ " ; - t. . “ . . , v .
Lloyd E;-Partain,."RecreationfiBringS“NeW'Opportunities
'to Rural'America," Soil ConservatiOn, XXVII (March 1963),

p. 172.

 

2Louis F. Twardzik, "Effects on.Public Policy of
Farm Recreation-Developments," Journal of Soil and Water
Conservation, XX, (May-June 1965) p.15.

 

 

of farmers who had converted all or part of their acreages
from agricultural production to income-producing recrea-
tional uses. Farm recreationflenterprisesuwere hailed as
more enjoyable.and more profitable than.the tOil Of

normal farm Operations.

Thus stimulated by public agencies-and attractive
publicity, farmers' interest in recreation increased.
rapidly. "Since . . . 1962, more than 25,000 farmers
throughout the nation have established.one or more income-
producing recreation enterprises on their land."3 In
Michigan the continued interest and activity in this new
business fostered the formation of the Michigan Association
Of Rural Recreation Enterprises in 1965 with over seventy
members.

The supporters Of rural recreation base their
Opinion primarily on the expectation that it will (1) shift
land from the production of agricultural commodities, (2)
provide new sources of income for rural families, and (3)
help meet the increasing demand for recreation facilities.

The accomplishment of these goals would have far-reaching

effects on the structure Of Michigan agriculture.

 

3Max M. Tharp, "Recreation as a Farm Business,"
Farm Policy Forum, XVIII, )NO. 1, 1965-66) p. 15.

 

-5-

Little is presently knoanabO t this new farm busi-
ness in Michigan. How many farmers.have adopted a recrea-
tion enterprise? Have significant changes in land use
been Obtained? How have farm incomes been affected? These
are important questions that need to be answered from both
a management and a policy standpoint.

There is generally a dearth of Objective literature
on the subject of rural recreation enterprises. Some of
this can be attributed to the relatively short lapse Of
time since such enterprises became a reality in such num-
bers as tO-warrant.serious.investigation.

In spite of this a number of reports on the subject
can be found. Most Of them are USDA publications, however,
and the earlier ones especially paint a glowing picture
of rural recreation. A special task force report was the
first such publication.4 It contained an introduction to
farm recreation businesses and cited examples Of various

types Of successful enterprises. This and subsequent

 

.63 !

 

4U.S.,Department'Of‘Agriculture, Rural'Recreation:
A Newaamily-Farm Business, Report Of a Task Force on
Income-ProdUCing Recreation Enterprises’On Farm Land,
(Washington: U.S. Government Printing Office, 1962).

 

 

-6-

similar reports were Obviously-designednfor popular con-
sumption to encourage.the.establishmentrof such enter-
prises and deserve only passing.reference here.
More.recent reports, including those Of various
USDA agencies, have delved into some.Of the physical,
financial, and managerial problems—Of recreation farmers.
Unfortunately, nearly all of these suffer from one or
more shortcomings. In the large majority of cases pur-
posive sampling techniques were used. The results are
therefore subject to biases Of personal selection. In
addition many studies concentrate on one particular enter-
prise so that a clear picture Of the total impact of
recreational developments cannot be assessed. There is
clearly a need for more Objective and broadly based re-

search into this area.

Objectives

 

The primary purpose of this study is to investigate
the effects of the establishment of recreation enterprises
on Michigan farms in terms of adjustments in organization
and resource allocation. These adjustments may have the
effects Of (1) increasing the overall efficiency and
income of the total farm business, thereby making it

feasible to continue normal production, or (2) providing

-7-

returns tO farm and human resources that will enable one
to withdraw all or part of the farm from agricultural
production while Off-farm employment develOpS'as a major
source of family income.

More specifically the study-will examine (1) the
number and types Of rural recreation enterprises in
Southern Michigan, (2) the contribution ththe recreation
enterprise to family income, (3) changes in the use of
family and hired labor, (4) changes in Off-farm employment
patterns for recreation farmers, (5) changes in land use
and production, and (6) financial problems of establishing

a rural recreation enterprise.

Procedure

 

The thirty-eight southern counties of Michigan com-
prised the original study area for this investigation
(Figure 1).. This region Of the state was selected because
it contains the greatest prOportion (79 percent) of
Michigan farms,has several largeprpulation centers which
provide nearby markets for recreational services, and
Offers numerous Opportunities for Off-farm employment which

may also contribute to farm adjustments.

-8-

During 1965 an inventory of private outdoor rec-
reation enterprises was compiled by the State Soil Con-
servation Committee in COOperation-with local soil con-
servation committees and SCS personnel in Michigan's
soil conservation districts.w The inventoryrlisted the
name, address and major enterprise type for each known
outdoor recreation business in the state on a county basis.
The sampling frame was derived from this inventory.

The Work Unit Conservationist for each soil con-
servation district in the study area was mailed a COpy
of the inventory for his district and:asked to identify
the;£a£m recreation enterpriseson'the-‘list.5 Replies
were received covering thirty-seven counties.6 The re-
sulting register represented as completely~as possible
the population Of farm recreation enterprises in the study
area.

The pOpulation was stratified by enterprise type

and four strata representing.fifty—five percent Of the total

 

5Afarm recreation enterprise is herein defined as
one carried out (1) by a business-which, for any year
since 1955, would have been defined as a farm in economic
class I through V by current census definition, and (2)
by a person who was the Operator of that farm during the
same time period.

6NO inventory had been taken in Wayne County which
is encompassed in large part by metropolitan Detroit. Cor-
respondence with the County Extension Agricultural Agent
provided the data for Hillsdale and Huron Counties.

-9-

were selected-for analysis: golf.courses, riding stables,
campgrounds, and fishing waters. The sampling rate within
each strata was twenty—five percent.

Interviews were conducted in twelve counties in
central southern Michigan (see Figure l). The counties
were chosen in such a way that travel time and expenses
were minimized while insuring that the sampling rate was
met. In addition they were selected to provide a cross
section in terms Of population density, type of farming
area, and topography, all Of which have an important bear-
ing on the develOpment of a recreationenterprise.7 A
stratified random sample of the enterprises within the
twelve county area was then drawn.

Interviews took place during August and September
1966. Respondents were first questioned about their
farming status. This was to assure that-their business
actually did qualify as a farm recreation enterprise.

They were also classified as inactive or active farmers
on the basis of farm product sales Of $2500 or more. The

active farmers were further designated as full-time or

 

7These and other factors which influence the supply
of rural recreation enterprises are clearly discussed in
U.S., Department Of Agriculture, op. cit., pp. 21-25.

-lO-

part-time, the latter group including those who worked Off
the farm 100 days.or more in any year since 1955.

Other parts Of the interview schedule included ques—
tions on family and hired labor, acreages and cropping
patterns, family income, and recreationLinvestments and
returns. See appendix for complete schedule.

The owners Of twenty-eight farm recreation businesses
were interviewed, with twenty-six complete schedules used
for analysis. The other two were discarded because the
owners refused to answer several vital questions. Inter-
views were requested of the principal Operator Of the
recreation business. In about one-half of the cases this
person was the wife Of the farm owner.

In Chapter II a sketch of agriculture, recreation
demand factors, and recreation farming in Southern Michigan
is presented. «Chapter III discusses various aspects of
establishing a farm recreation enterprise including invest-
ments, land-use adjustments, and financing.v Chapter IV
deals with the Operation Of a recreation enterprise and
covers labor use, recreation income,-and.the‘contribution
Of the recreation business to family income. The final

chapter contains a summary and some concluding remarks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Figure l.--The Study Area

 

Indicates counties

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l/j/l in which inter-

viewing took place.

 

 

 

 

 

 

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CHAPTER II

A PROFILE OF SOUTHERN MICHIGAN

Introduction

 

Compared to the scenic wooded lands in the northern
two-thirds of the state, the study area would seem to Offer
little Opportunity for a successful outdoor recreation
business. There are, in fact, several characteristics of
this region which have enhanced the development of outdoor
recreation in general and farm recreation enterprises in
particular. The most important of these factors have been
the agricultural background within which farm recreation has
evolved and the growing demand for outdoor recreation
facilities.

In the following paragraphs these two factors are
reviewed and their influence upon farm recreation is dis-
cussed. Finally, the scope of.farm~recreation'is outlined
through a presentation of the number and types of enterprises

found in the study area.

Agriculture

 

One word which best describes the agriculture of
Southern Michigan is variety.‘ Although dairy farms comprise

the largest single group, cash-grain farms and livestock

-12-

-13_

farms are.also prevalent throughout the region. Fruit and
truck farms are important in.the western sector and are
found to a lesser extent in the central and southeastern
parts. General farms and poultry farms are widely distri-
buted in smaller numbers across the region.

The fertile soils and relatively favorable climate
together with nearby markets have made Southern Michigan
the center Of the state's commercial agriculture. The
region contains eighty-one percent of Michigan‘s commercial
farms (Table 1).1 It includes seventy-four percent Of the
total farm acreage in the state, but less than forty-three
percent Of the total land area.

Table l.—-Number Of commercial farms, total farms, acres a
in farms, and total acres, Southern Michigan, 1964.

 

 

Southern ' Percentage of

Item Units Michigan State Total
Total Farms number 74,216 79.4
Commercial Farms number 48,666 80.9
Acres in Farms acres 10,048,647 73.9
Total Land Area acres 15,504,640 42.5

 

aBased on preliminary reports of the 1964 Census of Agriculture.

 

1According to Census definition, all farms with total
product sales of $2,500 or more are classified as commercial.
This classification includes farms with sales of $50 to $2,499
if the Operator was under 65 years Of age, did not work Off
the farm over 100 days annually, and farm income was the
major Source.of family income.

-14-

The structure Of agriculture is changing in Southern
Michigan as it is throughout the state and even the nation
as a whole. Farms are declining in number and more land
is being converted to non-agricultural uses. As shown in
Table 2, the number of farms declined more on a percentage
basis than did the acres Of farmland. This illustrates
the fact that much of the land from retired farms stays in
production through purchase or rental by other farmers in

order to increase the size of their Operations.

rt

Table 2.-—Decrease in number of total farms, commercial 1
farms, Acres in farms, Southern Michigan and
the State, 1959 to 1964.

 

Percentage Decrease

 

 

Item
Southern Michigan State Total
Total Farms 15.7 16.4
Commercial Farms 8.2 7.5
Acres in Farms 6.7 8.0

 

aBased on Agricultural Census data.

It should be noted that while there was a rather sub-
stantial decrease in the number of total farms, the percent-
age decrease in commercial farm numbers was just over one-
half as great. In 1959 commercial farms represented sixty

percent Of the total number Of farms, while by 1964 that

-15-

proportion had risen to sixty-six percent. Furthermore
there was a net increase in the number of farms with sales
of $10,000 or more during that same five year period. SO
while the number Of farms is declining, those which remain
are on the average becoming larger both in terms Of acreage
and output. It is the small, low income, and presumably
inefficient farm that is on the wane.

Another important feature of agriculture in the study
area is the large percentage Of part—time farmers.2 In 1959
over forty-two percent of all farm Operators reported work-
ing off the farm 100 days or more (Table 3). This was con-
siderably higher than the national average of thirty percent
for that year. By 1964 the proportion of part-time farmers
had increased slightly to forty-five percent, although the

total number fell by over ten percent.

 

2Here and throughout this study, part-time farmers
are defined as those who worked Off the farm 100 days or
more annually. This concept of part-time farmer differs
from the income oriented definition used in the Census of
Agriculture. For a discussion of these criteria see Ralph
A. Loomis, A Profile of Part-Time Farming in the United
States, Agricultural Economics Report 15 (East Lansing:
Department of Agricultural Economics, Michigan State Uni-
versity, August, 1965), pp. 2-5.

-l6-

Table 3.--Farm operators Who Worked Off the farm 100 aays
or fibre, Southern Michigan and the State, 1959

 

 

and 1964.a
Percentage
Area Number Of All Farm Percentage
Operators Decrease
1959 1946 1959 1964 1959 to 1964
Southern
Michigan 37,201 33,201 44.7 42.3 10.8
Michigan

Total 47,161 41,384 44.3 42.2 12.3

 

aBased on Agricultural Census data.

This information and other recent research indicate
that part—time farming is becoming an increasingly common
practice in Southern Michigan. Moreover it is not used
primarily as a means of moving out Of farming completely.
Loomis found that over two-thirds Of the part-time farmers
plan to continue both farming and off-farm work as a perma-
nent arrangement.3 It appears that a combination of Off-
farm employment with some sort of farming program is more
rewarding, both financially and personally, than either of
them alone. If this is the case, part-time farming should

persist for some time.

 

..- - - A - - a

3

Michigan" (unpublished Ph.D. dissertation, Department Of
Agricultural Economics, Michigan State University, 1964),
pp. 92-95.

-17-

The preceding material has outlined certain agri-
cultural characteristics Of the-study area, all closely
linked to the policy of the USDA with regard to farm
recreation. Indeed that policy was intended to deal
directly with such problems as the small low-income
farm and the increasing exodus from agriculture. An
early USDA statement listed four.reasons~for its interest
in farm recreation:

(1) It Offers a chance to provide additional
income to farmers and associated‘businesses
and, at the same time, enables farmers to
stay on their farms; (2) it can aid in divert-
ing crOpland to a more remunerative use for
the owner which can later, if and-when needed,
be returned to cultivation; (3) it provides

an urgently needed service; and (4) it helps
stabtflize the local economywand-strengthen
social institutions without removing land
from private ownership or reducing the tax
base.

Note that the first stated interest is in raising
farm incomes and keeping people on their farms.' Conditions
in the study area indicate a need for action to achieve
these ends. In addition there are large numbers of part-
time farmers who wish to retain their farms but might be

interested in shifting to recreation as an alternative

land use.‘ It seems reasonable tO expect more significant

 

4U.S., Department Of Agriculture, op- cit., p.2.

—18-

resource adjustments among this group-than among full—time
farmers heavily committed to a large scale Operation as

their only source of family income.

POpulation and Other Demand Factors

 

Population is an important factor in the demand for
outdoor recreation services. An important feature of
Michigan's pOpulation is its centralization in the southern
region. In 1960 that afiba contained over ninety percent
of the nearly eight million persons in the state (Table 4).
Moreover this centralization includes a concentration in
urban areas. As Table 4 points out, the urban population
of Southern Michigan represents over three-fourths of the
total for that region.5 Furthermore, sixtyafive percent of
that urban population resides in just three counties:

Macomb, Oakland, and Wayne.

 

5Basically the urban pOpulation includes all persons
living in incorporated villages, towns, and cities of 2500
or more. Refer to U. S. Census Of Population: 1960 for
a complete definition.

 

-19..

Table 4.--Tota1, urban, and rural pOpulation, Southern
Michigan and the State, 1960.

 

 

Percentage
Total Of State Urban Rural
Population Total number_,' % number' %
Southern
Michigan 7,126,982 91.1 5,491,150 77.0 l;635,832 23.03
State
Total 7,823,194 100.0 5,739,132 73.4 2,084,062 26.6

 

aCalculated from Allen Beegle, et al., Michigan Popu-
lation 1960, Selected Characteristics aHd_Changes, MiEhigan
Agricultural Experiment Station Special Bulletin 438 (East
Lansing, 1962), Appendix Table 1, pp. 37—40.

 

Access to recreation facilities is another important

factor in demand.

The great bulk Of the demand must be satisfied
in the afterwork and weekend hours. Americans
are a highly mobile people, ...but even on a
vacation trip more than half seek recreation
one or at most two days' travel from home.

For weekend and day trips they travel only a
few hours.

This is an important fact for owners of recreation
enterprises in Southern Michigan. All Of the major pOpulation

centers in this region are connected to the Interstate Highway

 

6Outdoor Recreation Resources Review Commission,
Outdoor Recreation for America (Washington: U. S. Govern-
ment Printing Office, 1962), pp. 26-27.

-20-

System which provides fast, direct routes from urban to
rural areas. The combined network of federal, state, and
local highways means that there are-over seven million
potential patrons only minutes awawarom an outdoor experience.
Income is a third demand factor of great importance,
particularly.for private recreation enterprisesh There has
been a steady increase in the income-Of Michigan residents
in recent years; per capita income rose.by thirty percent
from $2,324 in 1960 to $3,010 inl965-7 'It has been shown
that participation in outdoor recreation generally increases
with income.8 Therefore much of the growth'in the market
for recreation services in Michigan can be attributed to
rising personal incomes which have allowed more people to
take advantage of the extra services available to them in
private recreation establishments.
Clearly the opportunity to meet the recreational
needs-Of Michigan residents is a challenging one. The
prospects for private recreation enterprises seem bright

when only the factor of population is examined. When

access and income are added to the demandhpicture, it is

 

7Michigan State University, Bureau of Business and
.Economic Research, Michigan Statistical Abstract (6th
ed.; East Lansing, 1966), p. 93.

 

8Outdoor Recreation Resources Review Commission, op.
cit., p.28.

-21-

not surprising that many new recreation businesses have

been develOped;throughout the study area.

Farm Recreation Enterprises9

 

Farm recreation is an important part Of the entire
setting of private enterprise in the field Of outdoor re-
creation. In order to better understand the farm sector
it will be helpful to briefly review the industry as a whole.

There were 876 private outdoor recreation enterprises
in Southern Michigan as Of August 31, 1966. As Table 5 shows,
golf courses are the most numerous type of enterprise, fol-
lowed closely by water sports areas. Cabin and cottage
sites rank third, with riding stables fourth. These four
enterprise types together account for over one-half of the
total number in the study area. There was a two percent
net increase in the total number of enterprises from 1965
to 1966, with new camping grounds,-golf courses, and winter
sports areas responsible for most Of the increase.

Farm recreation enterprises represent just over six-
teen percent Of the total (Table 5).- While.this percentage

alone is not large, farm businesses do, nevertheless,

9Refer to footnote 5, Chapter 1, for the definition
of farm used in this study.

 

-22-

account for a significant proportion Of the total within
several enterprise types. .The most notable of these are
hunting areas, shooting preserves, and riding stables.

Two of these enterprises-hunting areas and riding stables-
are also among the easiest for farmers to develop. In the
first case the basic requirements are sufficient acreage

Table 5.--Number Of private outdoor recreation enterprises
by type, total and farm, Southern Michigan, 1966.

 

 

 

 

Farm as
. b Total Farm percentage
Enterprise type (Number) (Number) - of total
Riding Stable 90 29 32.2
Golf Course 205 26 12.7
Water Sports Area 143 19 13.3
Fishing Waters 66 16 24.2
Camping Grounds 71 15 21.1
Field Sports Area 72 15 20.8
Hunting Area 21 8 38.1
Shooting Preserve l6 5 31.3
Winter Sports Area 30 5 16.7
Vacation Farm 34 4 11.8
Cabin, Cottage Sites 92 l 1.1
Scenic Area 36 __0_ 0;0'
Total 876 143 16.3

 

aBased on an inventory by the State Soil Conservation
Committee, and correspondence with SCS personnel and County
Extension Agricultural Agents.

bRefer to Appendix for definitions of types of recre-
ation enterprises.

-23-

and wildlife. Most farms have both; in fact, most small
game hunting in Michigan now takes place on private farm-
land free of charge. Some plantings of food and cover,
and other elementary wildlife management practices would
provide the extra-game to attract hunters who-will pay for
their hunting privileges.» For riding stables the require—
ments are land, buildings, feed, horses, and equipment.
Most farms already have the first three of these; other
farms may have the latter two as well.» On the-other hand,
a non-farm investor, even if he were a rural landowner,
would find these enterprises more difficult to establish
since he would have less to start with.

In terms of numbers, a riding stable is the most
common type of recreation enterprise undertaken by farmers.
Golf courses have also been developed by a large number of
farmers and together with riding stables represent over one-
third of all farm recreation enterprises. Water related
enterprises including both water sports areas and fishing
waters comprise a large portion Of the farm total. Table
5 lists these and the other enterprises in order of impor—
tance within the farm category.

Farm recreation is expanding, and doing so faster

than private outdoor recreation as a whole. In just one

-24-

year, from 1965 to 1966, there was a net increase

of over nine percent in the number of farm recreation
enterprises in Southern Michigan as compared~to two per-
cent for the total.. Of the six private-recreation enter-
prises known to have gone out Of business during that

same period, only one had been classified as a farm recre-
ation enterprise. It is difficult to predict if this
relative increase in farm recreation enterprises will con-
tinue, for there are many uncertainties involved. At least
one can say that presently farmers are.making~an important
contribution.to the total supply Of private outdoor recrea-

tion facilities.

CHAPTER III

ESTABLISHING A FARM RECREATION ENTERPRISE

INTRODUCTION

 

The preceding chapter dealt-in.broad terms with
some notable characteristics of the studywarea, viz.,
agriculture, recreation demand factors, and farm recreation.
This chapter presents a more detailed analysis Of the sample
Of farm recreation enterprises and provides-some insights
as to why and how-farmers become.established’in a recreation
business.

Of the twenty—six interviews used-as the basis for
this analysis, ten were conducted with full-time farmers,
six with part-time farmers, and ten with inactive farmers.
There were interesting differences among these three groups
in terms Of their experiences in the recreation business
which will be discussed in.detail.along with comparisons

among the enterprise types covered in the sample.

Why a Recreation Enterprise?

 

As previously discussed, farm recreation enterprises

were acclaimed as an additional source of income for rural

 

lAn inactive farmer is defined as one who in 1965
sold less than $2500 worth of agricultural products but
had sold at least that amount in any year since 1955.

-25-

~26-

families, and were expected to produce greater returns to
marginal lands than could be realized from agricultural
production. This prospect was in-fact a major argument
presented by the USDA in its publications on this subject.
Among the respondents in this study, however, a variety of
factors influenced their decision to undertake a recreation
project.

Full-time farmers View recreation enterprises pri-
marily as a means Of utilizing heretofore idle resources
in order to Obtain additional income-r There was no indica-
tion from the sample that full-time farmers aS'a whOle are
shifting substantial acreages from agricultural production
to recreation use. ‘This point will be further illustrated
near the end Of this chapter.

Eight Of the ten full—time farmers already owned
the basic prerequisites for a recreation business before
development was initiated. Six respondents in this group
owned, as part of their farm, property either adjoining or
enclosing a lake. In an effort to make use Of this basic
resource they developed a fishing site or campground. Two
others had bred horses for several years and Opened a riding
stable as an outgrowth of that activity. nThe desire for

additional income motivated most of these farmers, but two

-27-

recreation businesses were started to give the children
more reSponsibility and an Opportunity to earn some money.

The two remaining full—time farmers had no unique
resources on their farms when the decision was made to
undertake a recreation enterprise. Thus considerably
more initial investment was required to establish the
business- The prospect Of additional income was the pri-
mary motivation for these farmers.

Recreation enterprises represent an alternative
land use for part-time farmers who wish to~reduce the size
of their productive Operations. All Of the part-time
farmers interviewed were working lOO-days~or more per year
in an Off-farm job at the time they entered the recreation
business. Thus it does not appear as is sometimes suggested
that recreation enterprises are undertaken-for the purpose
Of freeing the operator from farm labor in order to take
Off-farm employment. They are, rather, developed ex post
factO.

Among the part-time farmers; four entered'the recrea-
tion business because of inadequate returns from normal farm-
ing Operations. Farm size was the factor which-most limited
farm income, but low milk prices were cited in one case.

The balance Of the part-time farmers added a recreation

—28-

business to their continuing productive enterprises. In
these cases the respondents had raised horses for some time
and merely Opened their gates to customers.

Inactive farmers entered the field of recreation for
a greater variety Of reasons than did the others. The Off—
farm employment pattern for this group was similar to that
among part-timefarmers. Nine Of the inactive farmers held
an Off-farm job at the time a recreation enterprise was
established. Here again the movement out of agriculture had
already begun before recreation entered the picture.

A desire to quit farming either becausewof poor health
or general dissatisfaction was the primary"reason given by
five Of the inactive farmers. They did want to use their
land as a source of income, however, andtrecreation seemed
to them to be the best alternative.

A good location and Opportunity for investment led
the other five inactive farmers to recreation. .All of these
respondents had ceased farming some time before and sought
to utilize the idle resources to increase their income.

One of them stated that a relative who is a professional

soil conservationist pursuaded him to build his campground.

-29-

Farming Experience

 

The group.of farmers-interviewed had an average of
eighteen years Of farming experience-at,the time they
entered the recreation business;. There was no significant
difference among full—time, part-time and inactive farmers
with respect to this characteristic.

There were notable differences, however, as to the
types Of farming engaged in by farmers in the three groups.
As Table 6 indicates, six major farm types~were represented
in the sample. Dairy farms made up the largest single group
overall, and also among full-time and inactive farmers.2
Field crop farms ranked second with equal numbers of full-
time, part-time, and inactive farmers in that category.
Three full-time and one inactive farmer reported beef-produc-
tion as the major enterprise. The sample included just two
each in the classification of general, fruit or truck, and
horse breeding farms. It should be noted that both of the
latter were part—time operations and were considered as
active farms on the basis of livestock sales Of over $2500

in 1965.

 

2For inactive farmers, the farm type refers to the
major enterprise carried out before production ceased or
fall below the $2500 level.

-30-

Some-interesting relationships maymbe observed be-
tween farm status and the type Of enterprise engaged in,
especially in the case of full-time.and~inactiveffarmers.
A majority of the full—time farmers interviewed Operated
a camping ground or fishing site, both of which required
only a limited acreage. On the other hand, land require-
ments for a golf course are much higher; only one full-
time farmer Operated a golf course. Idle land was one
resource most inactive farmers had in abundance, and six

Of those did develOp a golf course.

-31-

Table 6.-—Distribution, by farm and recreation enterprise
type of full-time, part-time, and inactive
farmers for a sample Of farm recreation enter-
prise owners, Southern Michigan, 1966.

 

Recreation Enterprise
Golf Riding' Camping Fishing
Farm Type Course Stable Grounds Waters TOTAL

 

 

Full—time
Dairy 0 O 2 2
Beef 1 2 0 0
Field Crops 0 0 0 2
General 0 0 0 0
Fruit or Truck 0 l 0 0
Horse Breeding 0 0 0 _0
4

o|c>Hc5ng¢>

TOTAL 1 3 2

Part-Time
Dairy 0
Beef 0
Field CrOps 1
General 0
Fruit or Truck 0
Horse Breeding _9
1

Inactive
Dairy 2 0
Beef '1 0

Field CrOps l 1

General 2 0

Fruit or Truck 0 0

Horse Breeding 0 0

TOTAL 6 l 3 0

[.0
O Ol—‘NNP—‘ob

 

N
m

TOTAL ALL TYPES 8 8 5 5

-32-

Assistance-ianstablishment

 

. Recreation.enterprises.are an entirely new venture
ior most farmers. Many farm families may have had contact
with private.recreation-through participation. Few, if any,
however, have had experiences in establishing and managing
such a business. In spite of this only one—half of the
respondents Obtained some planning and/or technical assist-
ance. Furthermore, friends and neighbors were the sources
of help most frequently contacted.

Assistance was Obtained by nearly equal proportions
of full-time, part-time, and inactive farmers, but there
were some differences among enterprise types. -Five Of the
eight golf course develOpers received assistance as did
three of the five camping ground owners (Table 7). Less
than one—half of the fishing waters and riding stables were
developed with-outside help.

The Soil Conservation Service was the second most
frequently mentioned source Of assistance, and was contacted
by all Of the golf course Operators who received-help. Other
government agencies were also contacted, but not~a3'frequently

(Table 8). Eight of those receiving assistance reported

contacting two sources.

-33-

Table 7.--Assistance in Business Establishment by Enterprise
Type For a Sample Of Farm Recreation Enterprise
Owners Southern Michigan, 1966.

 

 

 

 

Total Number Obtaining
Enterprise Type Number Assistance
Golf Course 8 5
Camping Ground 5 3
Fishing Waters 5 2
Riding Stable 8 3
TOTAL 2 6 l 3
Table 8. —-Sources of Planning and Technical Assistance for

a Sample Of Farm Recreation Enterprise Owners,
Southern Michigan, 1966.

 

Number Contacting
Source of Assistance This Source

 

Friends and neighbors only

Soil Conservation Service Only

Both Friends and Neighbors and SCS

Both Cooperative Extension Service and SCS

Both Friends and Neighbors and Coop. Ext. Service
Both Friends and Neighbors and Farmers Home Adm.
Both ASCS and SCS

H P4 H +4 A no u

 

‘ ‘TOTAL ‘ 1 3

 

 

.'-3 4‘-

No questions were asked to determine exactly the
type of assistance Obtained in each case. This could be
deduced from the information above since the responsibi-
lities of the various governmental agencies are well
defined in terms of the help they can provide for private
recreation developments. The Soil Conservation Service,
for example, will give technical assistance in the form
Of plans, designs, and supervision for using soil and
water resources in recreation developments. The respon-
dent who contacted the Farmers Home Administration may
have, if he met certain requirements, borrowed up to
$60,000 for an outdoor recreation business on his farm.
The Cooperative Extension Service and the Agricultural
Stabilization and Conservation Service provide assistance
within their respective fields Of education and administra-
tion of land use adjustment programs (including direct
payments and cost-sharing for participation in various

parts of the programs).3

 

3For a more complete list of governmental agencies
and private organizations that serve persons interested in
outdoor recreation refer to Louis F. Twardzik, Sources of
Assistance in Recreation, Michigan State University Exten-
sion Bulletin 481 (East Lansing, 1965).

 

-35-

Recreation Investments

 

Owners of farm recreation enterprises have substan-
tial amounts of capital committed to the recreation business.
The sample group Of twenty-six farmers had total recreation
assets Of over one million dollars, or nearly forth thousand
dollars per farm (Table 9).

Table 9.-—Summary Of recreation investments by Enterprise

type for a Sample of farm recreation Enterprise
Owners,Southern Michigan, 1966.

 

 

 

 

Range
Enterprise High Low Total Average
Golf Course $180,000 $50,000 $ 792,000 xfif$99,000
Riding Stable 32,500 8,000 119,200 14,900
Camping Ground 65,000 2,200 97,450 19,490
Fishing Waters 2,100 1,100 7,750 1,550
TOTAL $180,000 $ 1,100 $1,016,400 $39,092

 

aThese figures include value Of land used in the
recreation enterprise.

Recreation investments differed markedly among enter-
prise types and ranged from a high of $180,000 for a golf
course down to $1,100 for fishing waters, as shown in the

above table. The average investment by golf course developers

-36-

was greater than the highest asset total listed for any of
the other types. This reflects the relatively larger acre-
ages and extensive land improvement measures required to
provide for an adequate playing field. Fishing waters, on
the other hand, need basically only a small area for parking
and dock facilities in addition to a few boats.4

Full-time farmers had a lower average investment in
recreation facilities than either of the other two groups
and particularly when compared to inactive farmers (Table 10).
Even part-time farmers had, on the average, less than one-
third the recreation assets of inactive farmers. While
these differences are striking, it must be noted that inactive
farmers owned six of the eight golf courses included in the
sample which were highest among the enterprise types in terms
Of average investment. By referring back to Table 6 it is
clear that full-time and part—time farmers are most involved
in fishing waters and riding stables respectively. These
enterprises were shown previously to have the lowesttaverage
investment. It is therefore enterprise type rather than

farming status which is more closely related to the size

of recreation investment.

 

4Refer to Appendix A for a list of standard facili-
ties usually offered by the various enterprises.

-37_

Table 10.--Summary of recreation investments by {fill—time,
Part-time, and inactive farmersifOrAa-sampleuéf
farm recreation Enterprise Owners, Southern
Michigan, 1966

 

 

 

 

Range
Farming Status High Low Total Average
Full-Time $ 65,000 $1,100 $ 112,750 $11,275
Part-Time 100,000 1,700 177,200 29,533
Inactive 180,000 2,950 726,450 72,645
TOTAL $180,000 $1,100 $1,016,400 $39,092

aThese figures include value of land used in the
recreation enterprise.

Land is a fundamental resource for outdoor recreation,
but not the only one. The value Of land used for recreation
accounted for less than thirty percent of the total value

of recreation assets on the sample farms (Table 11).

-38-

Table ll.--Value of land Used for recreation by Enterprise
type for a Sample Of farm recreation enterprise
Owners, Southern Michigan, 1966a

 

 

 

Average.‘ Recreation Land Value
Recreation ' as Percentage of Total
Land Value Recreation Assets
Enterprise Type (Dollars) (Percent)
Golf Course $27,550 27.8
Riding Stable 5,938 39.8
Camping Ground 4,680 24.0
Fishing Waters 440 28.4
TOTAL $11,289 28.9

 

aLand values were calculated for each enterprise based
on the current average non- -recreational market prices quoted
by each respondent for His particular area. The added value
of recreational improvements such as golf greens and trailer
lots was listed separately under "buildings and improvements"
on Page 6 of the interview schedule. Land used primarily
for farming but also for recreation (e.g., pasture crossed by
a bridle path) was not included as recreation land.

 

It may also be noted in the above table that riding
stables and camping grounds idiffer substantially in the
percentage of total investment represented by land value.
These figures indicate a relationship between land value
as a percentage of total recreation assets and the intensity
Of land use. Land accounts for nearly forty percent of the

total assets of riding stables where large tracts may be

-39-

used only for bridle paths. Land use in camping grounds,
however, is much more intensive with lotsrgenerally ClOsely
spaced. In this case real assets represent less than one-
fourth Of the total; the bulk of the investment lies in
improved lots for tents and/or trailers, including elec-
trical and sanitary facilities.

One additional aspect Of recreational land assets
needs clarification. The value of land used in the rec—
reation business must be included as part of the total
recreation investment from an accounting standpoint. It
did not, however, represent any additional capital expendi-
ture by the sample farmers as a whole. There was merely a
reallocation of all or part Ofthe existing land resources
to the recreation enterprise. Only one respondent found it
necessary to gain control of more acreage, and he did so
through leasing. This point has an important bearing
on credit requirements and will be discussed further in the

following section.

Financing Farm Recreation Developments

 

It had been thought that finanCing for a farm
recreation enterpirse would be difficult to Obtain,
particularly for long term development. Based on the

experience Of the sample farmers, such does not appear to

-40-

be the case. In fact only nine respondents reported using
credit to finance their recreation development and just one
of those said he had difficulty in Obtaining a loan. Several
factors appear to be responsible for this finding, not the
least Of which is the amount of total investment in the
recreation enterpirse.

As shown previously, land value represents an average
of nearly thirty percent of the total investment in a rec-
reation business. It was also pointed out that none of the
operators interviewed had purchased any additional land
to use for recreation. They thus owned a sizable prOpor-
tion Of the total resources needed to establish a recreation
business and thereby minimized the amount of new investment
required. While it is possible to purchase one horse or i
one rowboat at a time out of current income, land must
generally be acquired in large acreage blocks for which
credit is usually needed. If the costs of land acquisition
had been included in the total cost of new investments, it
is expected that the incidence of credit use would have 1
been higher than found in this study.

Credit use differed amoung the respondents according
to their farming status. Just one fullstime farmer used
credit while three part-time and {five inactive farmers did

so. It might appear that full-time farmers are better

—4l-

financially prepared to raise investment capital within the
firm than either of the other groups, or are somewhat more
reluctant to use credit. Actually these data do not lead
to such conclusions and it is necessary to look elsewhere
for clarification.

The use of credit is actually more closely related
to enterprise type than to farming status as shown in
Table 12. More golf course developers used credit than
any of the others. Three Of the riding stables were
financed with credit as was one of the camping grounds.
None Of the Operators of fishing waters needed credit to

finance this enterprise;

Table 12.—-Credit uSe by recreation enterprise for a
Sample Of farm recreation enterprise Owners,
Southern Michigan, 1966

 

 

Total Number Financed
Enterprise Type Number with Credit
Golf Course 8 5
Riding Stable 8 3
Camping Ground 5 1
Fishing Waters 5 0

 

TOTAL 26 9

 

.—42_.

These facts have an important bearing on the use of
credit by full-time as compared to part-time and inactive
farmers. Earlier it was shown that six full-time farmers
Operated either a camping ground or fishing waters, enter—
prises with a low rate of credit financing.

The need for credit is also dependent upon the total
investment involved. It should be recalled that golf
courses had the highest average investment and fishing
waters the lowest of the four enterprise types. Further-
more inactive farmers had the highest average investment
and full-time farmers the lowest.

Commercial banks provided the funds for each of the
nine farmers who Obtained credit. These farmers as a group
apparently had sound Operations and a good credit rating
since only one reported difficulty in obtaining a loan. He
was refused by one commercial bank because of low equity in
his real estate, but found another that was willing to make

the loan.

Land-Use Adjustments

 

In addition to supplementing family incomes, farm
recreation enterprises were expected to remove substantial
acreages of cropland from agricultural production. The

fact that the recreation enterprises in this sample were

-43-

developed on previously owned farm land was presented
earlier. Here the focus will turn to the nature and magni-
tude Of the land-use adjustments which have occured.

The Operators were asked to provide information on
the acres of cropland and other5 land converted to recre-
ational use only. The resulting data differed noticeably
both among farming status groups and enterprise types.

As expected, full-time farmers converted the
smallest amount of land to recreation use, both in abso-
lute terms and on a percentage basis. They reported an
average decrease in agricultural land Of under eleven
acres representing less than six percent Of their total
land holdings (Table 13). More than half Of the average
decrease was in cropland, but just two farms accounted for
all of that. The eight remaining full-time farmers used
only other land for recreation, with conversion ranging

from ten to two acres.

 

5Other land was defined to include permanent pasture,
woodland and wasteland (marsh, dunes, etc.).

-44-

Table 13.--Acre and percentage conversion of agricultural
land to Recreation Use by Full-Time, Part—Time,
and Inactive Farmers for a Sample Of Farm
Recreation Enterprise Owners, Southern Michigan,

 

 

 

1966.
Average Per Farm
Full- Part- fun “1.- f“" ”
Item Time Time Inactive All Farms

Total Land Operated

(acres) 182.3 135.5 135.2 153.0
Original Cropland

(acres) 125.6 105.8 101.7 112.0
CrOpland Converted

(acres) 6.1 33.3 66.9 36.0
Cropland Converted

(percent) 4.8 31.5 65.8 32.0
Other Land Converted

(acres) 4.5 10.0 25.2 13.8
Total Agricultural

Land Converted (acres) 10.6 43.5 92.1 49.5
Total Agricultural Land

Converted (Percent) 5.0 32.1 68.0 32.2

 

Part-time farmers, characteristic of their position
both in and out of farming, converted more total land to
recreation use than full-time farmers but less than those
who have ceased farming. The acreage Of cropland converted
was nearly five times greater than that among full-time
farmers but less than half that reported by inactive farmers.

On the average this group committed nearly one-third Of their

-45-

total land resources to the recreation business, with the
range from fifty percent to two percent. The total acreage
converted ranged from one hundred acres for a riding stable
to three acres for a fishing site.

Inactive farmers as a group have converted over two-
thirds of their total land holdings to recreation use. The
rate of cropland conversion was nearly sixty-six percent
overall, with three operators reporting a one-hundred per-
cent decrease in cropland acreage. The average total con—
version was larger for this group than either of the others,
but this is undoubtedly related to the higher percentage
of golf course Operators among inactive farmers.

Land conversion data provided by the sample When
summarized by enterprise type as in Table 14 produced no
surprises. Golf courses required an average Of over one
hundred acres although they ranged in size from forty-three
acres to over one hundred fifty acres. At the opposite
end of the scale were fishing sites which used an average
land area of less than three acres in addition to the

water area.

-46—

Table l4.--Acre and percentage Conversion Of Agricultural
land to recreation use by Enterprise type for

a Sample of Recreation Enterprise, Southern

Michigan, 1966

 

Average Per Enterprise

 

Golf

Riding Camping Fishing

 

-‘Item Course-ygtable Ground Waters

Total Land Operated

(acres) 160.3 127.8 160.0 176.8
Original Cropland

(acres) 124.8 87.5 120.0 122.0
Cropland Converted

(acres) 87.9 23.9 7.2 0.0
Cropiand Converted -

(percent) ‘ 70.4 27.3 6.0 0.0
Other Land Converted

(acres) 21.0 13.6 13.5 2.6
Total Agricultural Land

Converted (acres) 108.9 37.5 20.7 2.6
Total Agricultural Land

Converted (percent) 67.9 29.4 13.0 1.5

 

If the land use totals listed above may be considered
as average requirements for the various enterprises, then
the choice of a farm recreation enterprise is vitally linked
to the amount of land one is willing to allocate to this
use. Indeed the relationship of farming status to enter-
prise type mentioned several times before is dependent in

large part upon the size of the land-use adjustment which

is feasible in a given situation.

-47-

The establishment of farm recreation enterprises was
expected to help solve the surplus problem in agriculture
by reducing the acreage devoted to crop production. In the
data above, a thirty-two percent decrease in cropland
acreage on recreation farms may seem impressive, especially
since it occurred during a period in which the average crop-

land acreage on Southern Michigan farms increased over one

 

percent.6 In terms of the total agricultural land acreage
within the study area, however, the land-use adjustments
resulting from the establishment Of farm recreation enter-
prises are Of little importance. When the average acreage
conversion for the sample is projected for all 143 recreation
farms in Southern Michigan, the estimated total acreage con-
verted from agricultural to recreational use is 7079 acres.
This total represents less than one-tenth of one percent of
the 1964 total farm acreage in the study area and comprises

just one percent of the total decrease in farm acreage in

 

6Richard D. Duvick, "Part-Time Farmingrin Two Areas
of Southern Michigan, 1959 and 1963: Changes and Similari-
ties," Quarterly Bulletin (East Lansing: Michigan Agricul—
tural Experiment Station, August, 1966), XLIX, p.67. The
sample had been in the recreation business an average Of
seven years and most Of the land-use changes can be assumed
to have taken place since 1959.

 

—48-

that region between 1959 and 1964. The total effect of
farm recreation on agricultural land use and production to

date has been negligible.

CHAPTER IV

OPERATING A FARM RECREATION ENTERPRISE

Introduction

 

The preceding chapter dealt with several aspects of
establishing a farm recreation enterprise. This chapter
will focus on the Operation of such an enterprise including
labor requirements, income, and its contribution to family
welfare. The findings represent an average Of seven year's
experience in the recreation business. The sample included
two enterprises in their first year of operation and two

that had been in business for ten years or more.

Labor Use

 

The addition of a recreation enterprise to a farm
business imposes new labor demands upon the owner and his
family. Basically the work involved in a recreation enter-
prise includes the collection Of fees, supervision Of
patrons, maintenance of grounds and equipment, and management
functions. The actual labor requirements differ with each
enterprise; the farming status Of the owner influences his
labor contribution and that Of his family; both of these
factors affect the need for hired labor. The recreation
season, furthermore, coincides with the months of highest
activity in the productive enterprises, a fact which is

*H- "' ~ : i.;“—49-_

-50-

particularly critical to full-time farmers. In any case,
labor requirements merit serious attention.

Several respondents indicated that much of the labor
on golf courses was devoted to continual maintenance of the
course including early morning and late evening irrigation.
Such activities are not required in the other enterprises,
at least not to the same extent. This probably accounts
for the fact that the average hours of labor used on golf
courses was much higher than for any other enterprise
studied (Table 15). Camping grounds ranked second in annual

man-hours of labor used in the recreation business but

Table 15.-—Average annual man-hours of labor Used in the
recreation business by Source and enterprise
type for a Sample of recreation Enterprise
Owners, Southern Michigan 1966

 

Average perLFarm

 

 

Enterprise Type Owner Wife Children”_ Hired Total
Golf Course 1201 1033 257 911 3402
Riding Stable 481 440 588 0 1508
Camping Ground 865 584 177 67 1693
Fishing Waters 244 464 264 0 987
All Enterprises 734 655 345 293 2026

 

aAverage length Of the recreation season was six
months.

bHours of labor by children are considered here as
full man-hours.

-51-

required only one-half as much labor as did golf courses.
Labor use in riding stables was slightly less than in camp-
ing grounds, while fishing waters had by far the lowest
labor requirements. The latter was in general character—
ized by a realtively small volume of business and thus did
not demand the services of a full-time attendant; nor were
the maintenance requirements as high as in the other ,
enterprises.

Another important aspect Of labor use in recreation
enterprises is the source of that labor. Unless the recre—
ation enterprise was the only source Of family income, the
family head could not provide all Of the labor himself. In
fact as Table 15 illustrates, other family members and in
some cases hired workers do contribute many hours of labor
to the recreation business.

The contribution of the several sources Of recreation
labor is shown more clearly in Table 16. Among all the enter-
prises studied the owner provided over one-third of the total
labor required. Other family labor constituted fifty per-
cent of the total with the wife and children contributing
thirty-two percent and eighteen percent respectively. Hired

labor made up only fourteen percent Of the total and provided

less than any other single source.

-52-

Table 16.--Percent of Total Recreation Labor Contributed
by Owner, Wife, Children, and Hired Workers,
by Enterprise Type, For a Sample Of Farm
Recreation Enterprise Owners, Southern Michigan,

 

 

 

1966.
Percent Contributed By
Enterprise Type Owner Wife Chiidroo" Hifed
Golf Course 35 30 8 27
Riding Stable 32 29 39 0
Camping Ground 51 35 10 4
Fishing Waters 25 48 27 0
All Enterprises 36 32 18 14

 

These data support the assertion that farm recreation
enterprises use primarily family labor. This statement is
valid if one interprets "primarily" to mean over fifty per-
cent. It holds even if one excludes the owner's labor and
compares hired labor only to family labor contributed by the
wife and children.

The labor contribution by each source varied consider—
ably among the four enterprises. Golf courses used the high-
est proportion Of hired labor which is probably related to
the fact that their total labor requirements were the highest.
Camping grounds were the only other enterprises using hired
labor, and one of the owners stated that he gave two men

camping privileges in return for their part-time services.

-53-

Children supplied sizeable proportions Of the total labor
used in both fishing waters and riding stables. For the
latter enterprises, in fact, children provided more labor
than either the owner or his wife. In all cases the owner's
wife shared a considerable part Of the work load and in
fishing waters provided nearly one-half of the total labor
requirement.

Land-use adjustments were discussed in the previous
chapter and at that time reference was made to the impor-
tance Of such adjustments to the choice of a recreation
enterprise. The same argument may be applied to labor
requirements. Certainly the farming status and off—farm
employment pattern of the farm owner will determine the
amount of time he can work in the recreation business, just
as the availability and willingness of his wife and children
to join in the work will determine their contributions. The
availability Of reliable hired labor would also be a vital
factor in many situations. For example, the labor supply
would weigh heavily in making a choice‘between developing
a golf course or fishing waters.

When the data on recreation labor by source are
summarized according to farming status as in Table 17, some

interesting points emerge. The enterprise owners who were

-54-

full-time farmers were able to supply just over one-fourth
of the total labor used for recreation. They did not, how—
ever, hire extra workers for either full-time or part-time
recreation employment, but relied on the other family
members to fulfill the additional requirements. During

the interviews these farmers as a group appeared very
independent and several stated that they would not have
entered the recreation business if the family hadn't been
able to supply all of the necessary labor.

Recrefition enterprise owners with part-time farming
Operations were able to devote more time to recreation than
full-time farmers. They accounted for over one—third Of
the total recreation labor, but in spite of this they also
hired outside labor for seventeen percent of the total.

It should be noted that hired labor appears to substitute
mainly for children's labor when compared to full-time farms.
Table l7.--Percent of total Recreation Labor Contributed

by Owner, Wife, Children, and hired‘florkers

Among full-Eime, part-time, and inactive Farmers

for a Sample Of farm Recreation Enterprise dwners,
Southern Michigan, 1966.

 

Percent Contributed By

 

 

Farming Status Owner Wife Children Hired
Full-time 26 43 31 0
Part-time 34 31 18 17
Inactive 44 26 8 22

All Farmers 36 32 l8 l4

 

-55-

Inactive farmers ranked highest in the percentage
Of recreation labor contributed by both enterprise owners
and hired workers. Children were the least important source
of recreation labor on these farms. Undoubtedly much of the
difference between inactive farmers and the other groups
with respect to labor use is related to the high proportion
(sixty percent) of these farmers operating golf courses
which were shown earlier to have very high labor requirements.
Inaddition, several were Older men whose children had grown
and moved Off Of the farm.

Some additional comments about recreation labor are
required for a full understanding Of the data just presented.
One problem which arose during the interviews was that of
recording hours of recreation labor contributed by the
enterprise owner and his family. Respondents were asked
the average number of hours per week each family member
spent working in the recreation enterprise; these data were
later converted to an annual basis. Some difficulty was
encountered in situations where the wife spent several hours
each day collecting fees from visitors but was working at
household tasks mostcnfthe time. Respondents were inclined
to count such labor as an eight or ten hour day in the

recreation business when the time devoted to recreation was

-56-

actually much less than that—-Often on the order of two or
three hours. Children's labor was also a problem in this
regard for although they were at home throughout the day

not all oftmEirrtime was spent working or at least not in

the recreation business. In all cases the interviewer
attempted to probe this question Of labor use as thoroughly
as possible and to record only the actual hours of recreation
labor. There is still reason to believe that some individual
labor records are biased upward.

Another criticism that might be raised is the method
of recording children's labor as full man-hours. The pri-
mary reason for treating children's labor this way was the
lack of a suitable discounting factor. An attempt was made
during the interviews to uncover major differences in the
kinds of tasks performed by the owner, his wife, and his
children. Aside from special management functions under—
taken by either the owner or his wife, the children were
involved in the same activities as their parents-~collecting
fees,-cleaning boats, caring for horses, etc., according to
the type of enterprise. Furthermore, the respondents were
unwilling to discount the labor of their children and seemed
to value their contributions as equal or superior to those

of hired workers.

-57—

Recreation Contributions to Family Income

 

Farm recreation enterprises were merely supplemen-
tary sources of income for the sampie as a whole. The in-
come from recreation represented less than twenty-six per-
cent Of the total family income for fourteen Of the twenty-
six Operators interviewed and between twentyasix and forty-
five percent for an additional ten Operators (Table 18).
Table l8.—-Distribution of recreation income as a percentage

Of total family income among full-time, part-time,

and inactive farmers for a sample of farm recrea-
tion BnterprisecOwners, Southern Michigan, 1966.

 

Recreation‘IncofiecascPercfintagetof\Tofal
Farming Status 5-15 l6¢251326—35 236—45 46-95TE 100

 

 

Number of Farmers

 

Full-time 7 l l l 0 0
Part-time 1 1 2 2 0 0
Inactive 2 2

TOTAL 10 4 5 5 0 2

 

It is interesting to note that none Of the respond—
ents derived over forty-five percent of his total family
income fmnmrecreation unless it was his sole means Of support.
For those who engaged in farming and/or Off-farm employment,
recreation income did not exceed or even equal that from

other sources. The fact that two operators did report

—58-

recreation as their only source of income indicates that

a farm recreation enterprise can provide adequate financial
support in some cases. It may be that the farm or Off-farm
work load of the other Operators necessarily restricts both
the scale ofthe-recreation enterprise and its income po-
tential. In some types of recreation enterprises, however,
the marginal return to labor would be less than in farm or
Off-farm employment. Perhaps when the volume Of recreation
business can provide over fifty percent of a family's total
income it is profitable to devote full time to recreation.

For most Of the full-time farmers in the sample,
recreation was a minor adjunct to their farm business.
Recreation income accounted for less than sixteen percent
of the total family income on seven of the ten full-time
farms. In no case did recreation provide over forty-five
percent of the family's total income.

Part-time farmers as a group received a slightly
greater proportion of their total family income from
recreation. 'Four of the six part-time farmers reported
recreation income of between twenty-six and forty-five per-
cent Of the total, but again in no case did recreation con—
tribute over forty-five percent.

Inactive farmers were evenly distributed on the per-

centage of total family income derived from recreation.

-59-

This group included both respondents who Obtained all Of
their income from recreation. One of these Operated a
golf course and the other a camping ground and had been in
business for three and five years respectively. Each was
satisfied with his business success and felt secure with
just the one income flow. It should be noted, however,
that both Operators had been established farmers for an
average of twenty—two years previous to entering the recre-
ation business and were able to finance their developments
without the use of credit. In addition neither Operator
was supporting any children since in each case they were
all living in homes of their own. There is good reason to
suspect that these factors were vital in the decision

to develop a recreation enterprise as the sole source of

family income.

Other Sources of Family Income

 

For all but two of the Operators in this study recre-
ation provided less than forty-six percent of their total
family income. What was...‘their major; means of support? In
eleven cases it was the farm Operation and for the remain—

ing thirteen it was off—farm employment (Table 19).

-60-

Table 19.-—Major source Of family income for full-time,
part—time, and Inactive farmers for a gample
of farm recreation Enterprise awners, Southern
Michigan, 1966

 

Number Of Farmers Reporting This
Major Income Source

 

 

Farming Status Farm Off-Farm Recreation
Full—Time 10 0 0
Part-Time l 5 0
Inactive 0 8 2

TOTAL ii— i3_ —2_

 

aBased on 1965 Income

By definition full-time farmers did not work Off the
farm over 100 days annually, but none of the respondents
:hiths group reported any Off-farm.work. Their major source
Of family income was the farming Operation and in only one
case did the recreation enterprise contribute as much as
forty-five percent Of the total.

Part-time farmers did work Off the farm over 100 days
per year and all but one family reported the off-farm job
as their major income source. The exception was a father-
son partnership in which the son worked Off the farm for
several months each year and contributed about thirty per-

cent Of the family's income while the farm produced about

-6l-

fifty-five percent Of the total. Off-farm employment pro-
vided from fifty-five to seventy percent of the total income
for the five other respondents in this group with farm in-
come representing from fifteen to twenty-five percent of

the total.

The eight inactive farmers with more than one income
source Obtained between sixty and ninety-five percent of
their total income from an Off-farm job. Only one of these
reported ooy farm income and it represented less than fif—
teen percent Of the total.

From the sample as a whole there is no clear indi-
cation that recreation enterprises are more likely to occur
on part-time farms than full-time farms or vice versa.

Such enterprises are apparently consistent with both full-
time farm work and Off-farm employment. Of the two Operators
with income solely from recreation, one had been a full—time
farmer and the other a part-time farmer; so here, too, no
clear relationship between farming status and the develop—
ment Of a full-time recreation business emerges. It seems
that farmers, regardless Of their status, can enter the
recreation business. The type and scope Of the enterprise

is more closely related to some Of the factors discussed
earlier such as land and labor requirements, farm resources,

and family goals.

-62-

Recreation Income

 

While a detailed income analysis of each recreation
enterprise was beyond the scope of this investigation, recre—
ation income data are Of some interest and importance. For
this reason Operators were asked to provide gross and net
income totals for the 1965 season. For two businesses 1966
was the first year Of Operation and two Operators refused
to disclose income figures, so the results reported below
are the averages for twenty-two enterprises.

The enterprises studied took in $7,348 in 1965 and
had net cash income of $2,854J(Tab1e 20). After subtract-
ing charges for family labor and interest on investment,
Operator's labor income was $106, or about $0.17 per hour.
When the Operator's labor was valued at $1.50, investment
in the recreation enterprise earned 2.5% in 1965.

There were notable differences among enterprise types
with respect to recreation income. Golf courses had the
highest cash expenses. Even so, net cash income was $6,580.
The Operator's labor income, however, was a negative figure
(Table 20). This appears to be due primarily to an imbalance
between business volfime and total investment, a situation
which should be expected in the early stages of a golf

enterprise.

-63-

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.mOmHumuOuco usow one mo Sumo pom “mummuw umtzoEOm on tacos mEOOGH

cowumouoou no: umtu concedxo mg on .ucsooom Oucw coxmu comb ouswflm mflnu tam .Owcmto

>uouco>aw mtu mo unseen msu an Osam> :msuu: who Eoum muomwwt who: OODHOQOH mm mEoocH no:
muomwuth .mamEmm one Eoum oHamHHm>m no: mum3 mwcmzo kHOuco>cw so must mumswmt¢w

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.uoan count now mowm3 OOOHOcH momcmdxo zmmoo

.mumt oEoocw OuoHdEOO tofladasm LOHL3 mmmfluduOucO omotu maco OOUDHOOHQ

.cOmmmm cowumouomn mama may now mum mtuooomm

 

 

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one «we- NNH - How emu.m rameummpcn on enzyme
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mon.s mam- wmo.- NNm.- mnm.e 66500:“ conummuomu umz
emo.- wme sow mmo.- NON.N anonm- s-nEmm engage
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see.e omN new.- woo.m oNH.mH ommmcmaxm ammo
wqm.nw comm mme.mw w-o.mm ooh.m-m wranmomu ammo
mm m e m m nmmmwuduwuco mo nonssz
momwumuoucm muwumz OGOOHU wabmum omusou EOuH
HH< magnate wana5mo wanenm m-oo

 

.oomH .cmwfi50Mz cumnusom .mumcao Omwuduwuco
coflumouoou sumw mo OHdEmm m pom OMhu Omwuduouco kn ucofioumum OEOocH cowumouoomun.oN manna

‘6;-

Unlike the other enterprises in which horses, camp lots, or
boats can be added as business volume grows,a golf course
requires that the total investment in course, clubhouse,

and equipment be essentially completed before any patrons
can be served. Once the course is Opened it takes some

time for its reputation to become established among area
golfers and for a clientele to be built up. The golf
courses studied had been Open an average of less than four
years, so it can be expected that business will continue

to grow in the next few years and that returns will improve.
Such expectations, however, are based on the demand picture
outlined in Chapter II for Southern Michigan as a whole.

As in the other enterprises, future returns tO an individual
operator will depend basically on his managerial ability and
the local market.

Riding stables were the only enterprises studied which
showed good returns in 1965. With cash receipts of $5,618,
and net cash income of $2,550, Operator's labor income
averaged $777, or $1.62 per hour. The rate of return on
investment was 5.4% (Table 20).

Camping grounds took in $3,725 and had net cash in—
come Of $1,862. Operator's labor income was only $59, or

less than seven cents per hour. This enterprise required

-65-

a total labor contribution on the part of the Operator which
seems out of proportion to its business volume when compared
to the other enterprises. When Operator's labor was charged
at $1.50 per hour, the return to investment fell to -$122.

Fishing waters had a very low business volume, with
cash receipts of only $660. Cash expenses were propor-
tionally lower than in the other enterprises and net cash
income averaged $410. Family labor, as previously dis-
cussed, presented some problem during the interviews. This
is believed to be one reason for the fact that net recrea-
tion income is a negative value. Some re-evaluation of
labor use in these enterprises by both Operators and

researchers is called for.

Income Data Problems

 

Some problems need attention before further work is
done in this area. One has already been presented, namely
the accuracy of family labor records. A related issue is
that of the wage rate for family labor. Is it realistic
to make a charge for unpaid family labor based on the cur-
rent minimum wage when in most enterprises even hired
workers would not be covered by the present legislation?

If the minimum wage is not charged, what rate should be

-66-

used-~their expected wage in alternative employment? For
both housewives and children this may be zero. And while
all respondents kept separate recreation records for tax
purposes, these were not always complete enough to provide
for a detailed income analysis. Adequate records Of inven—
tory change were missing in many cases. The income state-
ment in Table 20 is therefore incomplete and would benefit
from revision when better records become available. Some
attempt could also be made to more accurately calculate
recreation investment totals in cases where resources are
‘used in two enterprises. There are undoubtedly other areas
of concern that could be mentioned, but this list makes
clear that more research is needed to resolve the many

uncertainties.

Plans for the Future

 

When questioned about the future of their recreation
business most respondents were quite Optimistic, but their
actual plans for the future differed considerably.

Only nine of the twenty-six owners planned to expand
their recreation enterprise;. This group included two full—
time farmers, and five inactive farmers.' NO expansion was

planned by Operators of fishing waters but three owners in

—67-

each Of the other enterprise categories did report expansion
plans including one of those for whom recfeation was already
the sole income source. The desire to increase their income
by Offering more complete recreational services was the
major reason for expansion given in all cases.

Expansion of five enterprises was planned to proceed
slowly as returns from the business allowed. Four other
owners expected to use commercial bank credit to further
their business development more rapidly.

Seven respondents definitely expected the recreation
business to develOp into their major source Of family income
and thought this would occur in a range of two to six years.
This group was comprised of five inactive farmers, one part-
time farmer, and one full-time farmer. All were owners Of
a golf course or riding stable. Of these seven, two inactive
farmers expected their golf course to develOp into their
sole income source and one part-time farmer expected the
same of his riding stable. None of these three, however,
were sure when that would occur.

From these responses it is clear that in some cases
a farm recreation enterprise can be develOped to the point
where it can replace farming or Off-farm employment as the

major source of family income. Less than one third of the

-68-

sample, however, indicated that this would occur. For
the majority of the farm recreation enterprise owners in
Southern Michigan, recreation will continue to merely

supplement the income from other sources.

CHAPTER V

SUMMARY AND CONCLUSIONS

In recent years there has been considerable inter-
est and activity in the business of farm recreation.

Most of this was precipitated by the new policy set forth
in the Food and Agriculture Act of 1962 to encourage the
establishment of private outdoor recreation facilities

in rural areas. To those concerned with the agricultural
problems of overproduction and poor land utilization,

this was visualized as an efficient means of taking re-
sources out of agricultural production. At the same time,
it was hoped, the farmer would receive an income sufficient
to enable him to stay on the farm while providing recrea-
tion facilities to meet the ever increasing demand.

In the years since that policy was announced and
implemented many farmers have started a recreation enter-
prise On their farm. How many Michigan farmers have done
so? Have important changes in land use occurred? How
have farm incomes been affected? These are important
questions that have previously been unanswered. The
purpose of this study has been to examine these and re-

lated aspects Of this new farm business.

-69-

-70-

The thirty-eight southern counties of Michigan
comprised the study area for this investigation. The
population of farm recreation enterprise owners was
identified from data provided by the State Soil Conser—
vation Committee with the assistance of SCS personnel in
the various soil conservation districts. The population
was stratified by enterprise type with golf courses,
riding stables, camping grounds, and fishing waters
selected for analysis.

Interviews were conducted in twelve counties
during August and September 1966. Twenty—eight Opera-
tors were contacted and twenty—six complete schedules
were obtained. Respondents included full-time, part-
time, and inactive farmers who provided information on
family and hired labor, acreages and land-use patterns,
family income, and recreation investments and returns.
The respondents also told why and how they entered the
recreation business and outlined their plans for the
future.

In Chapter I several specific areas of concern
were outlined for study. Each was treated in subsequent
chapters, but will be reviewed here along with the major

conclusions.

-71-

Farm recreation enterprises in Southern Michigan
number 143 and comprise about one-sixth of all private
outdoor recreation enterprises in the region. While
the total percentage is small, farmers own over thirty
percent of all hunting areas, shooting preserves, and
riding stables, all of which are fairly easy for farmers
to develOp. In addition farmers operate over twenty
percent of all fishing waters, camping grounds, and field
sports areas.

Several farm recreation enterprises have been in
Operation for ten years or more, but recreation did not
receive widespread attention as a new farm income source
until the early 1960's. This is undoubtedly the reason
that farmers, although they own a large proportion of
the total rural land, represent only a small part of the
outdoor recreation industry. The number of farm recrea-
tion enterprises is increasing at a higher rate than is
the non-farm sector. It is too early to know if this is
a growing trend among farmers or still a result of the
initial enthusiasm for which governmental policy was the
catalyst. The success or failure of today's recreation
farmers will strongly influence the develOpment of second

and third generation farm recreation enterprises and

-72-

ultimately decide the contribution of the farm sector to
the supply of outdoor recreation facilities.

The development of a recreation enterprise did not
affect the off-farm employment pattern of farmers in the
sample. Full-time farmers did not seek off-farm employ—
ment either before or after they entered the recreation
business. All part-time and inactive farmers who did
have an off-farm job had been so employed even before
their recreation enterprise was established. Thus recre-
ation alone is not a factor in shifting farm owners from
farming to off-farm employment. For those with an off—
farm job initially, a recreation enterprise may be
develOped into a substitute for the farming Operation.

Farmers had little difficulty in financing their
recreation enterprise. The majority of them developed
slowly with new investments covered by current income.
The fact that the farmers were not required to purchase
additional land substantially minimized the total cash
outlay needed to establish a recreation enterprise and
is responsible in large part for the low incidence of
credit use. Only nine respondents did use credit, and

all obtained the needed amount from a commercial bank.

-73-

Although recreation was responsible for major
land-use changes which occurred on some farms, the estab-
lishment of farm recreation enterprises has not substan—
tially affected the total land-use pattern in Southern
Michigan. Among farm recreation enterprise owners there
was a thirty-two percent decrease in agricultural land
due to shifts in land use from farming to recreation.
Full-time farmers converted only five percent of their
land to recreational uses. This proportion was consider-
ably higher among part—time and inactive farmers, repre-
senting approximately one—third and two-thirds of their
respective land holdings. When the samplerata on land-
use changes are projected for the 143 farm~recreation
enterprises in the study area, the farm acreage now used
for recreation representsless than-one-tenth of one per-
cent of the total farm acreage inrthat region. (The total
estimated decrease in farm land due to farm recreation
aCcounts for only one percent of-the total decrease in
farm land in Southern Michigan between-1959 and 1964.

While the reallocation of land and capital resources
from farming to recreation caused few problems, labor was
a critical factor in many cases. Labor requirements are
high in most enterprises and the recreation season coin-

cides with the busiest months onwa farm. Yet the farm

-74-

family provided all of the labor in the large majority of
the businesses studied. Hired workers accounted for an
average of only fourteen percent of the recreation labor
and were employed by only five operators. Several respon-
dents expressed dissatisfaction with the long days and
busy weekends that accompany a recreation business. These
findings indicate that a realistic appraisal of the labor

requirements and the family's ability and willingness to

 

meet them should be weighed heavily by anyone contemplating
a farm recreation enterprise.

A recreation enterprise in general provided only
supplementary income to the farm family. It was the sole
source of income for just two operators. In the other
twenty-four cases it provided less than forty—six percent
of the total income with farming or off—farm employment
as the major family income source. Although seven respon-
dents did indicate that the recreation enterprise would
develop into their major income source sometime in the
future, the majority of farmers will continue to View
recreation as a complement to and not a substitute for
other employment. This point is also important in the
planning stages of a recreation enterprise since in most

cases the owner will continue to devote most of his labor

-75-

to the farm or an off-farm job. Unless other family
members and/or hired labor can do most of the work, this
will limit the size of the recreation business. When
expanding an existing business with the hOpe of its be-
coming the sole income source, the operator faces the
problem of reallocating labor and capital resources while
maintaining the income from other sources. This is simi-
lar to the dilemma of the part-time farmer who strives

to expand his farming operation into a full-time business.
The lack of success among part-time farmers in this regard
is likely to be matched by the record of recreation farmers.

In addition to answering these Specific questions,
the study provided insights into several more general
characteristics of farm recreation enterprise owners.
Among these are the reasons for entering the recreation
business, the types of farms on which recreation enter-
‘prises are found, assistance obtained by farmers, and
recreation investments.

The prospect of additional income influenced most
farmers to enter the field of recreation, but this was
not the only motive. Some farmers wanted their children
to work in the enterprise to develOp responsibility and

earn spending money. Others had become inactive from

-76-

farming but wanted to stay on the farm and make use of
their land. A few riding stables grew out of a hobby of
raising horses. Such goals were not emphasized or often
not even mentioned in the early literature on farm rec-
reation while the income potential was given most of the
attention. It has been shown, however, that in practice
family income is not greatly affected by recreation re-
ceipts. More attention should be given to other possible
benefits (and problems!) resulting from the establishment
of a farm recreation enterprise.

No single type of farm seems particularly adapted
to recreation. The sample included dairy, beef, field
crop, fruit, truck, general, and horse farms in approxi-
mately the same proportions as those farm types are found
within the study area. Nor are recreation enterprises
indigenous to "marginal" farms. Few if any of the part-
time or inactive farms might have been so classified and
ten of the twenty—six farms were fairly large-scale, full-
time Operations. So while recreation has been stressed
as an aid to the low-income farmers, these data suggest
that most of the farm recreation enterprises in Southern
Michigan have been develOped by progressive-farmers with

either a strong farming program or a good Off-farm job.

-77-

Where is the true low-income farmer to whom recreation
income would mean a great deal? It appears that he is
being outclassed in the recreation business just as he
was in farming.

Even upon entering the new field of outdoor recre-
ation few farmers sought professional assistance in
planning and Operating their enterprise. In fact farmers
obtained help from friends and neighbors more frequently
than from one of the several governmental agencies that
have assistance responsibilities to rural recreation
develOpers. The typerand complexity of the enterprise,
of course, would determine the assistance that would
actually be needed, and in most cases the farmers felt
well qualified to proceed on their own. Past contacts
with governmental pgencies undoubtedly influenced some
farmers, either positively or negatively.

Sizable investments have been made in farm recreation.
Recreation-assets for the sample averaged nearly $40,000
per farm, including the value of farm land used in the
recreation enterprise.

One question related to recreation investments is
worthy of further comments. Are the marginal returns to
labor and capital in the recreation enterprise greater

than or at least equal to those in the farming operations?

-78-

The sample was not questioned specifically about this, but
financial records and recreation returns were discussed.
Several respondents gave the impression that no detailed
enterprise analysis had been carried out and there is good
reason to believe that few if any have faced the question
of equi-marginal returns objectively. Many Michigan
farmers could use additional capital with profit. The
full-time farmers in this study had an average of over
$11,000 invested in their recreation enterprise which in
some cases at least may have been better invested in the
farming Operation. Since farming is the major source of
income for this group, they especially need to be aware

of the Opportunity cost of a recreation enterprise.

The details of recreation income analysis are
worthy of further consideration and could form the basis
for a completely new study of farm recreation.‘ There has
been sufficient interest and financial commitment to this
farm enterprise to warrant further research. Indeed those
who encouraged farmers to enter the recreation business
now have an obligation to assist them with whatever special
knowledge and skills are needed to insure success——or at

least to minimize losses.

-79-

Additional effort could be put to the problem of
record keeping that was mentioned by several Operators.
Some interest was expressed in the Telfarm record system,
but some assistance is needed to help farmers adapt it
to a recreation enterprise.

The question of advertising was not probed in
this study, but this needs examination to determine the
effectiveness of various types of publicity. This could
be expanded into a market study to find out what types
of people use private recreation facilities and where
they come from. This information would have some appli-
cations for public recreation agencies as well.

Another interesting and revealing study could deal
in greater depth with some of the characteristics of farm
recreation enterprise managers. The motives and methods
of these individuals were not covered in this study as
fully as is desirable.

These few points are only some of the many unknowns
within this new farm business. This investigation will

hopefully lead to further work in this area.

APPENDIX A
DEFINITIONS OF TYPES

OF
RECREATION ENTERPRISES

8O

-81-

APPENDIX A

Definitions of Types of Recreation Enterprisesa

A.

Cabins, Cottages, and Homesites

Vacation or permanent living space in a recreation
area rented or owned by recreationers or lived in
because of the recreation Opportunities; includes

'group "camps" that use permanent buildings.’ Acti-

vities usually include:

1. Rural living—Standard facilities are lodging
(equipped, including for cooking), access
roads, parking areas, electricity.

Enjoying scenery (See G)

Nature observation (See G)

Water sports (See K)

Fishing (See D)

(Note: Normal requirements for drinking
water and sanitary facilities are assumed
throughout.)

mbww
000

Camping Grounds

Areas for tent, trailer, or pack camping, in-
cluding transient camping. Activities may
include one or more of the following:

1. Tent camping at a vacation site. Standard
facilities include access roads, parking
Space, cooking and eating facilities, trash
disposal.

2. Trailer park camping at a vacation site.

Standard facilities include access roads,

trailer and car parking space, cooking and

eating facilities and trash disposal.

 

I...

aAdaptedgfrOmnNational AssociatiOn of Soil and Water
Conservation Qistricts, "Guide to Filling Out Inventory
of a Private Recreation-Business."- (Unpublished guide
to accompany inventory worksheets), NACD Press, January,

1965.

b

-82-

Transient trailer camping. Usually on or
near a main highway. Standard facilities
include parking space, electricity, and
showers.

Pack camping in a wild or wilderness area,
including horseback riding, nature obser—
vation, enjoying scenery, and fishing.
Standard facilities are guide service,
riding horses, and camping equipment.

Field Sports Area

DevelOped areas for concentrated play acti-
vities other than in water. This includes

children's "day camps." These may include

various combinations of the following acti-
vities:

1. Competitive games: Standard facilities

7.

would include diamonds, courts, tracks,
lights, stands, refreshments stand, and

game equipment.

Archery: Standard facilities include
practice butts, and one or more field
courses of 14 targets each with paths and
backstops.

Target Shooting with rifle, pistol, or shot-
gun. Standard facilities include skeet and
trap layouts, ranges with backstops.
Bicycling: Standard facilities are paths
and equipment rental.

Go-cart racing: Standard facilities include
track and vehicles.

Children‘s play activities such as swinging,
sliding, climbing, riding, puttering.
Standard facilities may include swings,
slides, gyms, mechanical rides, sandboxes.
Picnicking: Standard facilities are tables,
benches, and fireplaces.

Fishing Waters

Water areas having good fishing, owned by or
with access to by the Operator. Activity is
usually one of the following:

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1. Lake, bay, river, or ocean fishing.
Standard facilities include boats, ramps,
docks, bait, tackle, and supplies.

2. Pond fishing. Standard facilities include
either fertilized waters or stocked fish,
row boats, bait.

3. Stream fishing. Standard facilities in—
clude access roads or trails.

Golf Courses

Courses with fairways and greens for one or
more of the following:

1. Standard 9—hold or 18-hole golfing.
Standard facilities include clubhouse with
lockers, caddie service.

2. Par-3 golfing. Standard facilities are
only the course.

3. Driving practice. Standard facilities in-
clude equipment, supplies, flood lights.

4. Putt golfing. Standard facilities for
practice putting is a green and equipment;
for a "miniature golf course," equipment,
supplies, and flood lights.

Hunting Area

An area of land or land and water for hunting
wild game, including one or more of the following:

1. Small game hunting. Standard facilities are
access, parking lot, protection against il—
legal trespass.

2. Big game hunting. Standard facilities
include access, parking lot, protection
against illegal trespass, lodging, meals,
access roads and trails.

3. Waterfowl hunting. Standard facilities in-
clude access, parking lot, protection against
illegal trespass, blinds or pits.

Natural, Scenic and Historical Areas

Areas of exceptional scenery, fauna or flora,
geological or mineral interest, or historical

-84-

significance. One or more of the following
activities may be involved.

1. Enjoying scenery. Standard facilities may
include combinations of roads, trails,
vistas, and overlooks.

2. Nature Observation, as on wildlife areas,
plant gardens, distinctive geologic forma—
tions. Standard facilities may include
combinations of roads, trails, walkways,
interpretation equipment, guide services,
and landscaping for display of plant,
animal, and mineral resources.

3. Hiking. Standard facility is a system of
trails.

4. Camping. (See B).

5. Rock hounding. Standard facilities include
access to mines or mineral deposits.

6. Historical sites visiting. Standard faci-
lities are“adcess tO'a restored or preserved
site Of historical importance with the Ob-
jects and equipment of the period.

Riding Stable

An area for the use of horses or other riding
animals for recreation, and their housing.

1. Horseback riding. Standard facilities in-
clude horses, tack equipment, trails, and
corrals.

2. Pony riding. Same as above but for small
children. Standard facilities also include
rings and attendant.

3. Riding animals other than horses and ponies.
Standard facilities are corrals and guides.

4. Carriage and sleigh riding. Standard faci-
lities are vehicles and horses with drivers.

Shooting Preserve

An area devoted to the shooting of pen-reared
game birds. Activity number one below is the
core of the business.

1. Controlled shooting of stocked game birds.
Standard facilities are pen-raised game birds,
guide service, pointing dogs.

-85-

2. Target shooting. (See C)
3. Picnicking (See C)

Vacation Farm or Dude Ranch

A rural area operated as a working or simulated
farm or ranch that rents vacation living accom-
modations. It will have activity number one
below, plus one or more of the others below:

1. Rural living. (See A) Standard facilities
also may include farm or ranch activities,
such as haying, milking, rounding up cattle,
etc.

2. Horseback riding. (See H)

3. Fishing. (See D, especially D-2)

4. Playing games. (See C) Other standard
facilities may include, for indoor games,
tables, chairs, cards, dart boards, and the
like.

5. Picnicking. (See C)

Water Sports Area

An area of water suitable for swimming or boating
either controlled by or with access to by the
operator. The enterprise usually centers around
either swimming or boating as the main activity.

1. Swimming. Standard facilities may include
beach, bath house, and diving boards, plat-
forms and floats.

2. Boating and water skiing. Standard facili-
ties include. ramps, boats, supplies.

3. Skin diving. Standard facilities include
boats and special equipment.

4. Picnicking (See C)

5. Camping (See B)

6. Playing games (See C)

Winter Sports Area

An area develOped for snow and ice—using Sports.
Skiing is usually the main activity.

1. Skiing. Standard facilities usually include
designed slopes for novices and experts, lifts,
clubhouse.

-86-

Ice skating. Standard facilities include
lighting and warming room.
Tobogganing. Standard facilities are a

designed SlOpe and toboggans.
Sledding. Standard facilities are a designed

SlOpe and sleds.

-87-

APPENDIX B

INTERVIEW SCHEDULE

APPENDIX B.--Interview Schedule

Michigan Agricultural Experiment Station
Department of Agricultural Economics

Rural Recreation Enterprise Research Project

v Interview code no .

 

1. Business Organization
A. Farm Business

1. In the year 1965 did your business produce crops and/or livestock products
whose total sale value was $2500 or more?

Yes . No .

 

(Ask only if "Yes" answer to question 1 above)
2. What is your major farm enterprise today? (check)

l._____Dairy S ._____Hogs 9 .___Fruit

2 .___Field crops 6.____Sheep and lambs 10._____Vegetables
3.____Beef cattle 7 .____Eggs 11. Other

4 .____Calves 3 .__Poultry "'_'

3. What other production enterprises are carried out on your farm?
(Record No. from list above) , , ,

 

(Ask only it "No" answer to question 1 above)

4. What was your major farm enterprise before you discontinued farming?
(Record No. horn list above) '

5. In what year did you last sell crops or livestock products whose total
value was at least $2, 500? 19 .

6. What were the malor reasons behind your decision to discontinue farming?

 

 

 

 

(A_l1_ the following to be asked of all respondents)
7 . How many years had you been farming before starting a recreation business?
years.

 

8. In any year since 1955 have you ever worked full time off the farm for 100 days
or more? Yes No

'1— L) 753m question 9 .

-2-

8a. Were you working full time off the farm for 100 days or more at the time
you started your recreation business?

Yes . No

 

 

8b. At the time you started your recreation business, was your major source
of family income:

sale of farm products?
off farm employment?

9. In 1965, which of these contributed the greatest share to total family income:

% share
recreation business?

sale of farm products?
off farm employment?

 

if blank)

9a. Then you regard the income from recreation as only a supplement to
your major source of family income?

Yes . No

 

 

if blank)

9b. Do you expect your recreation business to develop into your
1. main source of family income? Yes: ___years No
2. sole source of family income? Yes: years No

ié-(if checked)
9c. Is the recreation business your sole source of family income?
Yes 60 to question Bl. No

9d. Do you expect the recreation business to develop into your sole source
of family income? Yes: years No

 

Q

B. Recreation Business

1. What is your major recreation enterprise?
1. cabins, cottages 5.

 

 

___golf course 9 . shooting preserve
2 .__camping ground 6 ._ hunting area 10. vacation farm
3. ___field sports area 7. :scenic, historic area 'll.___water sports
4.___fishing waters 8. ___riding stable 12.____ winter sports

2 . In what year did you begin to plan your recreation business? 19

3. In what year did you first open your recreation to the public? 19

LOffice me: Yrs. from plan to opening: __ __ I

.1

4. Have your initial plans for the recreation business been completed:

Yes , in 19 . No . they will be completed in 19

L Office use: Yrs. from plan to completion __ __ I

-3-

5. What were the major reasons behind your decision to start a recreation business?

 

 

 

 

 

 

 

6. Did you seek planning assistance in developing your recreation business, and

if so, what sources provided the most help?
chamber of commerce

 

 

 

 

 

 

___SCS
____FHA sportsmans clubs
___ASCS recreation association
__Coop. Exten. Service local businessmen
___Friends and neighbors other

:other

7 . Were you able to obtain adequate credit for the development of your

Yes . No . 0t needed .

recreation business?
(gate question 12 .

8. What institutions did you contact fer credit? (check)
commercial bank

 

 

FHA
F LBA savings and loan
PCA friend or relative

 

9. Which of these were most willing to make a loan for a recreation enterprise?
(place it in blank above.)

10. Which of these refused to make a loan for a recreation business?
(place "0" in blank above.)

ll . What major reasons did they give for refusal?

 

 

-4-

12. Do you plan to expand your recreation business in the near future?
Yes 0 m o <—) go to II

 

12a. What are some of your reasons for wanting to expand?

 

 

 

 

 

 

 

 

 

 

‘V
12b. Will you have to obtain credit for this expansion?
Yes: long term . No. ~——-——) go to II
short term .

12c . Where will you probably obtain the needed amount?

 

III. Laad Ownership and Use
A. Ownership
1. How many acres do you own? None _. Acres .
1a. How much of this acreage is used for recreation? None . Acres _.

 

2. How many acres do you rent from others? None . Acres .

2. How much of this acreage is used for None . Acres .
recreation?

3. How many acres do you rent to others? None . Acres .

Total acres operated .

 

B. Changes in land use. I would now like to ask you some questions about
land use before and after the addition of a recreation enterprise to your farm.

. , Before‘ After (1965)

1. Acres of cropland a) owned
b) rented
c) total

 

 

 

2. Acres of a) feed grains
b) other field crops
c) vegetables
d) fruit
e) other (specify)

 

-5-
3. Acres for recreation XX
4. Did you buy or rent any additional acreage to use in your

recreation business? Yes. buy .. acres ' No .
rent acres

 

5. How many acres of cropland have you converted to recreational
use only? acres. None .

 

6. How many acres of pasture have you converted to recreational
use only? acres. None .

7. How many acres of cropland or pasture are used for both farming
and recreation? acres. None .

8. Do you plan to buy or rent any additional land for recreational use
in the near future? Yes : Buy acres No .d.k. .
Rent acres

 

9. Do you plan to convert any additional cropland or pasture to recreational
use in the near future?
Yes . cropland acres. No . d.k.__.

pasture acres.

Labor Requirements

1. How many months per year is your recreation business in operation?
months; full operation months.

2. Do you hire any non-family labor for work exclusively in your
recreation business?

 

Yes . No —-) go to question 3.
2a. full time men @ total man hours per week

2b. ___part-time man @ total man hours per week

3. Do you hire any non-family labor for work both in the farm and
recreation business?

Yes . No . -———-9 go to question 4.
3a. full time men @ total man hours per week
in the recreation business.
3b. part-time men @ total man hours per week
in the recreation business.

4. How many hours per week do you and members of your family work in
the recreation business?
Total hours per week
husband
wife
children (number )

 

 

 

IV. Income and Expenses

1. Do you keep accounts of annual income and expenses for your
recreation business? Yes . No .

2. What were your income and expense totals for the recreation
business in 1965 and the latest three year average (if applicable)?

Gross Income - Cash expenses .= Net Income
1965
3 yr. avg.

 

 

 

 

 

 

3. What is your total investment in the recreation enterprise alone?

a. land (acres x $/acre )
b. buildings and improvements

c. livestock and/ or stocked game

d. equipment

8. other (specify)

 

Recreatim Total

BIBLIOGRAPHY

Beegle, Allen, et a1. Michigan Population 1960, Selected
Characteristics and Changes. Michigan Agricultural
Experiment StatiOn Special Bulletin 438, East
Lansing, 1962.

 

Duvick, Richard D. "Part-Time Farming in Two Areas of
Southern Michigan, 1959 and 1963: Changes and
Similarities,"'Quarterly Bulletin. East Lansing:
Michigan Agricultural Experiment Station, August
1966, XLIX, 64—76.

 

Loomis, Ralph A. A Profile of Part-Time Farming in the
United States. Agricultural Economics Report 15.
East Lansing: Department Of Agricultural Economics,
Michigan State University, August, 1965.

 

"Occupational Mobility in Rural Michigan." Unpub-
lished Ph.D. dissertation, Department of Agricul-
tural Economics, Michigan State University, 1964.

National Association of Soil and Water Conservation Dis-
tricts. "Guide to Filling Out Inventory of a
Private Recreation Business." Unpublished guide
to accompany inventory worksheets, NACD Press,
January, 1965.

Outdoor Recreation Resources Review Commission. Outdoor
Recreation For America. Washington: U.S. Govern—
ment Printing Office, 1962.

 

Partain, Lloyd E. "Recreation Brings New Opportunities
to Rural America," Soil Conservation, XXVII
(March 1963), 171-174.

 

I

Tharp, Max M. "Recreation as a Farm Business," Farm .
Policy Forum, XVIII (No. 1, 1965-66), 15-21.

 

Twardzik, Louis F. "Effects on Public Policy of Farm
Recreation Developments," Journal of Soil and
Water Conservation, XX (May-June 1965), 95—98.

 

Sources of Assistance in Recreation. Michigan
State University Extension Bulletin 481, East
Lansing, 1965.

-94-

-95-

U.S. Bureau of the Census. U.S. Census of Population:
1960. General Social and Economic Characteris-
tics. Michigan. PC (1)-24c.

 

U.S. Census of Agriculture: 1964:” Preliminary
Report, Series AC 64-Pl.

 

U.S. Department of Agriculture. Rural Recreation: A
New Family-Farm Business. Report of a Task Force
on Income-Producing Recreation Enterprises on Farm
Land, 1962.

 

 

Van Nierop, Emmanuel T. "Michigan Summary—Inventory of
Private Outdoor Recreation Enterprises." Unpub-
lished report for the State Soil Conservation
Committee, January 10, 1966. (Mimeographed).

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