S.D. wetland mitigation bank opens soon
April 5, 2016
South Dakota's first agricultural wetland mitigation bank may soon be open for business through the support of a number of South Dakota farm groups.
The wetland mitigation bank program is designed to provide agricultural producers with an affordable option to meet their conservation compliance responsibilities by providing a platform where wetland credits can be bought and sold with the assistance of a dedicated third party.
Designed by S.D. Farm Bureau through the use of a Natural Resources Conservation Service (NRCS) Conservation Innovation Grant (CIG), the framework for the banking program is currently under review by the Natural Resources Conservation Service (NRCS).
"The NRCS Wetland Mitigation Banking Program was authorized under the 2014 Agriculture Act (Farm Bill)," explained David Kringen, SDSU Extension Water Resources Field Specialist.
Kringen went on to explain that this Wetland Mitigation Banking Program is intended for the express use of agricultural producers needing to comply with wetland conservation compliance provisions that were originally established under the 1985 Farm Bill. In 1985, in order to remain eligible for most USDA programs, producers had to certify that: 1) they had not planted or produced an ag commodity on a converted wetland, and 2) they had not manipulated a wetland to make ag production possible (i.e. removing trees and stumps).
Options for wetland conservation compliance included: 1) avoid the wetland, 2) minimize any potential impact to the wetland, or 3) mitigate the wetland through on or offsite restoration, enhancement, or creation.
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If a producer wanted to mitigate, it was often left up to them to locate and restore/create a wetland of similar "function and value", or made to compete for prohibitively expensive wetland credits with developers, the Department of Transportation, etc.
With the help of the Wetland Mitigation Banking Program, funds will be made available to offset the costs incurred by third parties in establishing a wetland mitigation bank, or modifying an existing bank to meet NRCS requirements.
These funds – up to $1 million per award – are made available through the U.S. Department of Agriculture (USDA) to states or regions with a high wetland conservation compliance workload.
In South Dakota, the third party responsible for the first grant application of its kind will be the S.D. Farm Bureau in partnership with Dakota Wetland Partners (DWP).
"This last entity, a private LLC, will provide the technical expertise for the day-to-day operations of the mitigation bank," Kringen said. "Other supporting organizations include the SD Soybean Association and the SD Corn Growers Association."
The Mitigation Process
The key tenet of the NRCS Wetland Mitigation Banking Program is to target agricultural wetlands by focusing on temporary and seasonal, isolated, degraded, cropped wetlands that typically get driven over, tilled, and sprayed each year.
Providing that the bank framework is approved and the grant is awarded, the first step for producers interested in mitigation would be to contact their local USDA Farm Service Agency (FSA) office to request a certified wetland determination.
NRCS personnel will provide a wetland determination which identifies the location of the wetlands on the producer's land and the scope of the required protection in order to maintain USDA program eligibility.
Once a determination has been made, and at the producer's invitation, DWP personnel will then visit with the producer to determine the number of credits to be mitigated (1 credit = 1 acre). It will also provide a list of wetland units for sale within the same regional geographic area, or sub-basin (Figure 1). Mitigation outside of a sub-basin where the wetland is located is not allowed.
Selling Wetland Credits
Landowners interested in selling wetland credits should contact DWP to determine: 1) the number of converted wetlands that the landowner is willing to reestablish, or 2) locations to create a new wetland.
Prior converted wetland areas need to exhibit some moderate to serious need for habitat improvement. Payment will be given in exchange for: 1) allowing restoration of the wetlands, and 2) long-term protection of those wetlands. All restoration costs are to be paid by the Exchange, and long-term management costs are to be covered by the grant managed by the Farm Bureau. A minimum 50 foot average buffer may also be required to protect the integrity of the restored/created wetland.
Determining the value of wetland credits takes place between buyer and seller. The price will be determined by supply and demand in an open market system. A seller may set a price, but if too high, buyers have the opportunity to look elsewhere. A percentage of the selling price will go towards both DWP and the SD Farm Bureau for restoration and administration. A deed restriction will stay in effect on the restored/created wetland as long as the mitigated wetland remains mitigated.
For more information, contact the South Dakota Wetland Exchange at firstname.lastname@example.org or (605) 359-5108.