The USDA Swampbuster: Avoid Getting Stuck

In 1985, Congress passed the Food Security Act, a comprehensive framework to administer agriculture and food programs. It included establishment of the Erodible Land and Wetland Conservation and Reserve Program. The conservation and reserve components are affectionately (or perhaps unaffectionately) referred to as “Sodbuster” and “Swampbuster,” respectively.

Swampbuster’s purpose 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.”

Keeping Wetlands Wet

To achieve those conservation goals, Swampbuster bars producers who convert wetlands to tillable cropland from receiving certain USDA benefits such as direct payments and crop insurance subsidies. By enrolling in USDA programs that provide those benefits and submitting the required AD-1026 form to their local NRCS office, farmers agree to the “compulsory conservation” of keeping wetlands intact.

One exemption is if land — even former wetland — was farmed prior to Dec. 23, 1985, Swampbuster provisions generally do not apply. This is where the USDA’s swamp monster lies in wait for those who violate the Swampbuster provisions.

Landowners who want to remove woody vegetation or install drainage tile are expected to provide an updated AD-1026 to the NRCS. Question 7 asks if anyone has engaged in certain activities since Dec. 23, 1985, or will in the future, and then lists various questions under subparts A, B, and C.

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 answer is yes, the farmer must indicate the years these activities have occurred or will occur.

For example, let’s say a farmer wants to remove five acres of trees so the area can be farmed. Since these activities have not been evaluated by the NRCS, that needs to happen before removing the trees. NRCS will do the evaluation and generate a preliminary technical determination (PTD). This report assigns a designation the five-acre area, such as wetland, non-wetland, or prior-converted. When the PTD is finalized, it becomes a Final Technical Determination (FTD).

Filing an Appeal

If a farmer disagrees with the FTD, an appeal can be filed. That’s important because a wetland certification remains effective in perpetuity; 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, and once it becomes final, the landowner is likely stuck with that forever, and so are his or her heirs.

I cannot stress enough that farmers who disagree with an FTD need the help of an attorney and wetland consultant. Fighting back against an NRCS technical determination is no easy task. It must be proven that the NRCS’s method was either flawed in determining it was a wetland, or that it is incorrect for other reasons.

I have seen many farmers attempt do-it-yourself lawyering because they think they can simply appeal and make the argument that the area is not wet and/or simply does not have wetland characteristics. However, a wetland does not have to be some picturesque area with cattails, migratory birds, or other aesthetic features that come to mind. 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)
3. Inundation or saturation by surface or groundwater (hydrology) enough to support hydrophytic vegetation.

The NRCS threshold criteria for a wetland is low. In fact, many wooded areas that could be easily cleared and farmed without installing tile can still be classified as a wetland. At the end of the day, farmers who intend to create new drainage systems or conduct land leveling, filling, dredging, clearing, or excavation that has not been previously evaluated by NRCS should err on the side of caution 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 Dec. 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.

Fill Out the Form

I would be hard pressed to think of a time when a client had problems with the NRCS for failing to complete an AD-1026 to improve tile in areas that have already been farmed, but it can happen.

One questionable scenario occurs when old tile has not been working for some time, causing areas not to be farmed for several years. I have seen NRCS claim abandonment has occurred when the area has not been farmed for five consecutive years.

The saga generally plays out as follows: Tiling falls into disrepair in an area that has historically been farmed, resulting in that area not being farmed for many years. The farmer eventually replaces or repairs the tile and believes all is well because the area was farmed before Dec. 23, 1985. However, because no AD-1026 form was completed prior to the tile work, the farmer may not realize the land is considered abandoned and has been reverted to a wetland according to NRCS. The farmer’s repairs or replacements then result in a citation for wetland violation.

Had an AD-1026 been completed, the farmer would only have a wetland to deal with instead of a costly violation. Without a violation, the farmer could pursue mitigation, wetland credits, or other avenues to repair the tile and farm the wetland.

Serious Penalties

Many people employ the adage, “It is easier to ask for forgiveness than permission.” When it comes to Swampbuster, though, not so much. Farmers found in violation of Swampbuster are ineligible for USDA program benefits for each year the violation exists.

For example, if a farmer converts a wetland in 2010 and NRCS is not aware of it until 2025, the farmer will be ineligible for 2025 program benefits and beyond until an appeal is successful, the wetland is restored, or the wetland is mitigated.

That also makes the farmer ineligible from 2010 through and including 2024, so any payments received from USDA during that time must be paid back.

But wait, it gets better. In 2014, the rules were amended to extend to crop insurance premium subsidies. So, in my example, from 2014 up to and including 2024, the farmer must pay back the amount the USDA subsidized his or her crop insurance premiums.

Generally, crop insurance premiums are paid by the USDA to the tune of about 60%, meaning the payback can be enormous. I recently had a client with more than $2 million in wetland violation fees for a half-acre of land. The violation that occurred in 2009 and NRCS did not catch it until last year. Thankfully, that appeal was successful.

When 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 seven-figure fee. In Indiana, the maximum monetary penalty the court can give you for murder is $10,000. I half-heartedly joke that USDA’s penalty for converting wetlands carries stiffer fines than taking a human life, at least in my home state. Unfortunately, when it comes to Swampbuster, the penalties usually do not fit the crime, but that’s how the law is written.

Completing an updated AD-1026 before clearing woody vegetation, tiling wet areas, etc., can go a long way to keep farmers from getting stuck in the USDA swamp.

My next column will look at what happens if 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, 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.