Avoiding the USDA's Swamp Monster

 

 

 

The USDA’s Swampbuster – Avoid Getting Stuck in the Swamp.

In 1985, Congress passed the Food Security Act, a comprehensive framework to administer agriculture and food programs.  In doing so, Congress established a conservation program titled the Erodible Land and Wetland Conservation and Reserve Program. The conservation and reserve components are affectionately (or perhaps un-affectionately) referred to as “Sodbuster” and “Swampbuster,” respectively. This article will focus on Swampbuster.

The stated purpose of Swampbuster is to conserve and preserve wetlands and to protect natural resources for a public purpose, including to “assist in preserving the values, acreage, and functions of the Nation’s wetlands.”  To achieve conservation aims, Swampbuster bars producers who convert wetlands to cropland from receiving USDA benefits.

Whether or not a farmer is subject to Swampbuster depends on if the farmer is enrolled in USDA programs whereas the farmer receives benefits from various programs such as direct payments, crop insurance premium subsidies, and other benefits.  So, Swampbuster creates what many refer to as “compulsory conservation” in that it conditions USDA agricultural benefits on a farmer keeping “wetlands” in conservation. 

 Swampbuster prohibits farmers receiving USDA agricultural benefits from converting  wetlands into tillable land to be used for agricultural purposes. A farmer seeking any U.S. Department of Agriculture benefits must submit a completed AD-1026 form to the local Natural Resource Conservation Service (“NRCS”) office certifying compliance with Swampbuster’s conservation provisions as a condition of eligibility for certain USDA programs.   

Keep in mind that the magic date for Swampbuster is December 23, 1985.  Essentially, if land was farmed prior to December 23, 1985, it is, for the most part, exempt from Swampbuster provisions.  If it was not farmed before such date, then Swampbuster provisions apply to the land.  It is here where the USDA’s swamp monster lies in wait for those to violate the Swampbuster provisions.

A person who desires to remove woody vegetation or install drainage tile is expected to complete an updated AD-1026 to the NRCS.  The AD 1026, via question 7, asks if anyone since December 23, 1985, has engaged in certain activities, or will so in the future, and then lists various questions under subparts A, B, and C.  I will address each of these subparts.

Subpart A of the AD-1026 asks if anyone has or will “perform any activities to create new drainage systems, conduct land leveling, filling, dredging, land clearing, or excavation that has NOT been evaluated by NRCS?”   If the farmer checks “Yes”, the farmer is to indicate the years these activities have or will occur.   So, for example, assume there are 5 acres of trees in a field that I want to remove so the area can be farmed.  Since these activities have “not been evaluated by the NRCS”, NRCS will need to evaluate my activities before I perform them.  From here, NRCS will evaluate and generate a Preliminary Technical Determination (PTD).  A PTD is a report from NRCS stating what designation the 5-acre spot falls under, such as wetland, non-wetland, prior-converted, and so forth.   Later, the PTD will be finalized as a Final Technical Determination (FTD).  

If a farmer disagrees with an NRCS technical determination, they are afforded the right to appeal such determination.  Appealing a technical determination you disagree with is important because a wetland certification remains effective in perpetuity. This is because the administrative rules limit review of a prior certification.  The rules state: “A person may request review of a certification only if a natural event alters the topography or hydrology of the subject land to the extent that the final certification is no longer a reliable indication of site conditions, or if NRCS concurs with an affected person that an error exists in the current wetland determination.”   Translation:  only an act of God or an error by NRCS can change a wetland determination. 

I cannot stress enough that, if a farmer disagrees with an NRCS technical determination, to get professional help.  Fighting back against an NRCS technical determination is no easy task.  Essentially, you will need to show the NRCS’s method was either flawed in determining it was a wetland or some other factual reasons.  This is generally going to take the help of an attorney and a wetland consultant.  Over the years I have had many instances where a farmer decided to undertake some “do-it-yourself-lawyering” because the farmer “thinks” the area is not a “wetland”.  They think they can simply appeal and make the argument that the area is not wet and/or simply does not have wetland characteristics, etc.  However, I routinely tell clients that a wetland does not have to be some picturesque wetland with cattails, migratory birds, or other aesthetic features that come to mind when the average person envisions a wetland.  Rather, in the NRCS’s world, a “wetland” only needs three criteria: (1) Predominance of hydric soils (soils formed under wet conditions), (2) prevalence of hydrophytic vegetation (vegetation adapted to wet soil conditions), and (3) inundation or saturation by surface or groundwater (hydrology) enough to support hydrophytic vegetation.  Thus, when confronted with what is referred to as an “adverse determination” regarding a Preliminary or Final Technical Determination, plan on bringing the “A” team (i.e. get professional help) because once a determination becomes final, you’re likely stuck with that for the rest of your life, and so are your heirs.

So, the threshold criteria for a “wetland” in the NRCS world is low.  In fact, many wooded areas that could be easily cleared and farmed without tile having to be inserted can still classify as a “wetland”.   At the end of the day, a farmer should err on the side of caution if they intend to create new drainage systems, conduct land leveling, filling, dredging, land clearing, or excavation, that has not been previously evaluated by NRCS, by completing an updated AD-1026.

Subpart B of the AD-1026 also asks if the farmer intends to “improve or modify an existing drainage system that has NOT been evaluated by NRCS.”  Subpart C asks if the farmer intends to “maintain an existing drainage system that has NOT been evaluated by NRCS.”    There is a note to subpart C that states: “Maintenance is the repair, rehabilitation, or replacement of the capacity of existing drainage systems to allow for the continued use of wetlands currently in agricultural production and the continued management of other areas as they were used before December 23, 1985. This allows a person to reconstruct or maintain the capacity of the original system or install a replacement system that is more durable or will realize lower maintenance or costs.” 

I would be hard pressed to think of a time when I had a client get crossways with the NRCS for failing to complete an AD-1026 for improving tile in areas that have already been farmed, but it can happen.  More so, issues seem to arise where old tile has not been working for quite some time, causing areas not to be farmed for several years.  In some of these cases, I have seen NRCS take the position that “abandonment” has occurred when the area has not been farmed for five (5) consecutive years.  The saga generally plays out as follows: for whatever reason, tiling falls into disrepair and an area that has historically been farmed is not farmed for many years.  The farmer eventually replaces or repairs the tile and believes all is well because the area was farmed before December 23, 1985.  However, because the farmer failed to complete an AD-1026, the farmer is cited with a wetland violation due to a reverted wetland.  Had the farmer completed an AD-1026 and been informed that the area had reverted to a wetland, the farmer would only have a wetland to deal with, instead of a costly violation.  With only a wetland existing, and not a violation as well, the farmer can pursue mitigation, wetland credits, or other avenues so as to repair the tile and farm the wetland.

Many people employ the adage of “it is easier to ask for forgiveness, than permission.”  And, in many areas of life, that adage holds true.  When it comes to Swampbuster, not so much. Thus, I believe a brief discussion on the penalties for violating Swampbuster is in order. 

When a farmer is in violation of Swampbuster, they are ineligible for USDA program benefits for each year the violation exists.  This applies to past and future years.  For example, If I convert a wetland in, say 2010, and NRCS is not aware of it until 2025, I will be ineligible for 2025 program benefits and beyond until I am successful in an appeal, the wetland is restored, or the wetland is mitigated.  But, I am also ineligible for years 2010 through and including 2024.  Meaning, any payments I received from the USDA from 2010 up to and including 2024, I am expected to pay back.  But wait, it gets better.  In 2014, the rules were amended to extend to crop insurance premium subsidies.  So, in my example, for 2014 up to and including 2024, I am expected to pay back the amount the USDA subsidized my crop insurance premiums.  Generally, crop insurance premiums are paid by the USDA to the tune of about 60%.  Thus, the amount expected to be paid back can be enormous.  We recently had a client that was looking at an amount of over 2 million dollars for a ½ acre (yes, only a ½ acre) wetland violation that occurred in 2009 and NRCS did not catch until last year.  Thankfully, we have been able to successfully appeal that. 

When a good number of years, or a decade or two passes before NRCS is alerted to a wetland violation, it is not uncommon for even small farms to be looking at a return of a payment amount of seven figures. For murder in my state of Indiana, the maximum monetary penalty the court can give you is $10,000.00.  Thus, I always half-heartedly joke that the USDA’s penalty for converting wetlands carries stiffer fines than taking a human life, at least in Indiana.  Unfortunately, when it comes to Swampbuster, the penalties usually do not fit the crime, but such is how the law is written.

This article serves to give a high-level review of Swampbuster with focus on the importance of filing an AD-1026 with NRCS before engaging in certain activities.  Completing an updated AD-1026 before clearing woody vegetation, tiling wet areas, etc., can go a long way to keep you from getting stuck in the USDA swamp. Our next article will look at what happens when you do end up getting stuck in the USDA swamp, and examine exemptions to wetland violations that are available, mitigation of wetlands to alleviate a violation, and the appeal process.

These articles are for general information purposes only and should not be construed as specific legal advice or to create an attorney-client relationship.  Laws vary among states and information contained in this article may not be applicable to your state. If you have a legal issue, you should contact an attorney.

 

John J. Schwarz, II, is a lifelong farmer and has been an agricultural law attorney for 18 years and is passionate in helping farm families with legal matters.  Natalie Boocher, contributed to this article, and is an elder law attorney assisting clients with a wide range of long term care planning and asset preservation, contributed to this article. They can be reached at 1-844-FARMLAW and www.thefarmlawyer.com. Go to www.farmlegacy.blogspot.com for past articles.