MITCHELL, S.D. - The South Dakota Wetland Exchange program has yet to be officially approved by the Natural Resources Conservation Service, and it’s already set to spread to North Dakota.
Proponents of the plan presented a Wetland Mitigation Forum on Aug. 17 at Dakotafest in Mitchell, S.D. The partnership includes the South Dakota Farm Bureau, the South Dakota Corn Growers Association and South Dakota Soybean Growers Association.
David Patrick, of Sioux Falls, S.D., is a partner in Dakota Wetland Partners, the sponsor of an agricultural mitigation bank for South Dakota. He said if NRCS approvals come through as expected, he expects transactions could start happening by next spring, or within a year.
Patrick said the exchange is hoping to create “hundreds of credits,” to start to meet the needs of thousands of acres in the state.
The partnership has been doing preliminary work for nearly three years in anticipation of approval. Once approved by the NRCS, credits could be exchanged within six months to a year. The group applied for NRCS approval in February and thought it would come in April. The project started on June 1. Patrick could not explain why approval has been delayed.
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200 acres preset Meanwhile, the group has worked intensively with four landowners in four of the 10 target watersheds east of the Missouri River in eastern South Dakota, where the company will initially be focused. The four have a total of more than 200 acres that would be restored as wetlands to produce credits. The exchange is looking for people who can get a wetland restoration and creation project up and running within two years.
Under the program, landowners who have non-wetland areas that are low-
lying and could easily be turned restore a wetland could become approved as a mitigation bank. Producers creating the bank would produce credits in advance that would be used by credit buyers at a later date.
The bank allows producers a legal opportunity to “move” a wetland from an existing field and purchase “credits” for newly created wetlands to allow the farming of nuisance wet spots by restoring wetlands within watersheds. In the main, existing wetlands don’t qualify for sale as mitigation credits.
To allow farming of converted wetlands in perpetuity on the converted acres, the corresponding mitigation wetlands acres also must be kept forever. The buyers’ costs must pay for the land, but also compensate for the cost of developing the mitigation wetland, plus restoration, which together are only about half of the value. The payments must also cover monitoring and maintenance, including weed spraying, as well as contract insurance.
A first for ag Dakota Wetland Partners would do the work to create that mitigation site to produce credits approved by NRCS, Patrick said. If it works, it will be first exchange of its kind in the country, with Minnesota being the only similar one, with the Minnesota Department of Agriculture attempting to do something similar. North Dakota Farm Bureau has been talking with Patrick about working on a similar program for southeast North Dakota.
In a bit of drama for the event, presenters asked audience members to participate in a non-binding survey of how much people would be willing to sell or buy credits. The three “buyers” in the audience anonymously said they would be willing to pay $20,000 an acre, $15,000 an acre, or an amount 150 percent of the land value. The two sellers would have offered 112 percent of the land value or $12,500 per acre.
“The cost part of it is completely up in the air, because an ag credit has never been sold before,” Patrick said. “We’re hoping that we make enough from selling credits that it’s affordable to them, but it’s also has to be enough money to compensate the landowner who is hosting the site - creating the new wetlands and protecting it into perpetuity.
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If it works, wetland mitigation has been a long time coming for agriculture.
