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Wetlands: Replacing onsite vs. buying credits

By Janet Kubat Willette

Date Modified: 02/24/2014 11:21 PM

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OWATONNA — The relationship between farmers and wetlands can be tricky.

Sid Cornelius, an environmental specialist and retiree from the Natural Resources Conservation Service, explained some of the nuances of wetlands and the options available to replace wetlands at a Plain-Talk Ag Wetland Mitigation Workshop held Feb. 5 in Owatonna.

More than 40 people attended.

Cornelius encouraged attendees to look at the big picture and realize that everyone is in the water quality protection game together.

"What I do does have an impact downstream," he said.

He worked in wetlands in Minnesota for about 20 years and has yet to meet anyone who knows everything about wetlands. It's not unusual to get multiple answers to the same question, Cornelius said.

Part of the reason for the confusion is there are three laws pertaining to wetlands, and all were written at different times to address different concerns, he said.

• The Clean Water Act was passed in 1974. Its emphasis was on protecting streams, lakes, ponds and rivers. Later, its authority was expanded to include wetlands.

• Wetland compliance, known as swampbuster, came to being in the 1985 farm bill. It was written to stop drainage of additional wetlands to convert them to cropland.

• Minnesota legislators passed the Wetland Conservation Act in 1991 to maintain and protect the state's wetlands.

Compliance with one doesn't necessarily mean compliance with all, Cornelius said. On the plus side, the three agencies who administer wetland laws have established a common procedure and definition to determine if a site is a wetland. There are some tricky wetlands, but the agencies have worked hard to get a consistent agreement, he said. Also, there is general agreement on mitigation requirements.

Two critical principles to keep in mind if considering mitigation are that the wetland's functions must be replaced and that mitigation must be for a minimum of acre for acre. The term "no net loss" is often used in this context.

To illustrate this point, Cornelius gave the example of two wetland sites, each one acre in size. The proposal would be to drain one site and leave the other alone. This isn't mitigation because is a loss of one acre of wetland. Generally, leaving it alone doesn't work, he said.

A wetland's functions vary by site depending on:

• Its location — a sidehill wetland has a different function than a floodplain wetland, for example.

• What drives the water source to the wetland.

• Vegetation. The types of vegetation are in turn driven by the source of water and the wetland location.

• Human and animal effect on the site.

In theory, the mitigation site should look exactly like the site that's being drained, but in reality, the mitigation site may look better than the site being drained, Cornelius said.

A farmer's primary mitigation options are on-site mitigation and purchasing credits through the ag wetland mitigation bank.

On-site mitigation requires trained expertise to select a suitable location and replace the function being lost. Farmers who have a site that would work are further ahead than farmers who have no idea where to place a wetland, Cornelius said.

If doing on-site mitigation, farmers must develop a mitigation plan, determine how to establish and maintain the water and vegetation, account for critter impacts and plan for risks associated with the wetland. Be aware this likely is going to take some time, he warned. The Natural Resources Conservation Service folks at the local office will help, but they likely don't have the expertise needed to develop the mitigation plan. Plans most likely will be developed by someone at the regional level who serves several counties or by a private consultant.

Other considerations are that on-site mitigation projects must be maintained by the owner, NRCS must be allowed access and a perpetual easement must be filed on the property.

The other option is to purchase credits through the Minnesota Wetland Bank. Two banks exist — a regular wetland bank and a bank specific to agriculture. The agricultural wetland bank was established because farmers weren't using the regular bank and didn't want to compete against developers seeking wetland credits, Cornelius said. It is unique to Minnesota.

Typically, credits in the ag bank are cheaper than in the regular bank. Prices range from $5,000 to $25,000 per credit in the ag wetland bank and from $15,000 to $40,000 in the regular bank, according to an NRCS official at the meeting.

NRCS will work with farmers to establish sites that go into the ag bank, but those sites can't be developed using public funds. Land that is coming out of CRP and is classified a wetland may be eligible for enrollment in the bank, Cornelius said.

Generally speaking, a farmer who wants to drain must purchase one credit for each acre of displaced wetland. The Minnesota Board of Water and Soil Resources assigns credits to the wetland.

The BWSR administers the bank. They charge administrative fees to the seller to set up an account and for the processing of credit withdrawals. However, they have nothing to do with the credit transaction -- that is between the buyer and seller.

Ten bank service areas exist in Minnesota, and the philosophy is mitigation should take place as close as possible to the drained site. The replacement ratio varies depending on where the credit is purchased.

If purchased in the same bank service area as the drained site, the replacement ratio is one-to-one. If, however, the replacement site is in an adjacent bank service area, the replacement ratio increases to two-to-one.

A push is on to get more people to use the bank, Cornelius said, but there is nothing wrong with doing on-site wetland mitigation. Perhaps a landowner doing on-site mitigation may have extra credits to sell on the agricultural wetland bank.