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FSA has Powerful Tools to Dissuade Farmers from Growing on Wetlands

February 28, 2016

Originally published by Michigan Farm News on February 29, 2016; republished with permission.

The United States Department of Agriculture’s (USDA’s) Farm Service Agency (FSA) has several powerful tools to dissuade farmers from producing an agricultural commodity in wetlands or on highly erodible soil.  

One of the more onerous tools is the ability to determine that a farmer is ineligible for USDA program benefits, along with the requirement that the farmer repay all past program benefits received from the time of the violation until the restoration of the resource.  

This tool can be particularly devastating in a situation where FSA decides to use it after almost a decade and a half of farming on an alleged wetland, especially if the Natural Resources Conservation Service (NRCS) had authorized the farming in the first place. 

This was the situation recently facing an Eaton County farmer. His family farm relied upon USDA program benefits to survive. 

Over more than a dozen years, these benefits totaled $1,138,380.91. We know this amount to the penny as that is the amount FSA wanted the farmer to repay for allegedly farming in a small (approximately one-acre) wetland. And FSA wanted the farmer to pay interest on top of that!   

A couple of years before the close of the last century, the local NRCS resource conservationist had authorized the replacement of old broken clay tiles with new tile, and had authorized farming the area thereafter. Fast-forward to the second decade in the new millennium, and what a surprise to find FSA asking the farmer to repay more than a million dollars of program benefits for farming in a wetland.

Fortunately, the USDA statutes and regulations provide several safeguards for this type of situation. These include:

  • Exemptions for prior converted wetland
  • A statutory requirement that the amount of ineligibility be proportionate to the severity of the violation
  • Regulations listing numerous factors that must be considered in weighing the seriousness of the violation, and that specifically provide that a loss of all benefits is not required
  • A statutory provision authorizing the use of equitable relief from program benefit ineligibility.

Unfortunately, sometimes it takes several years and a lot of money to convince the administrative appeals bureaucracy to utilize those safeguards. In the recent case, the County FSA Committee in the spring of 2014 agreed that the situation did not warrant a 7-figure “penalty.” The State FSA Office agreed. But in the summer of 2015 the Deputy Administrator of Farm Programs (DAFP) disagreed, and reaffirmed the $1,138,380.91 reimbursement requirement, plus interest.

An appeal was taken to an Administrative Law Judge in the National Appeals Division (NAD).  After the hearing and post-hearing briefing, the ALJ’s recommendation was to reduce the amount of ineligibility to just over $10,000.  The FSA in January 2016 rescinded the adverse decision to require repayment of program benefits, meaning that the farmer did not have to repay any program benefits.

There are many good lessons to take from these events. First, when a governmental official authorizes certain farming activities, especially if they involve drainage or farming within what might be considered a wetland, get it in writing. Second, do not simply agree to a determination regarding current or present program benefits or restoration activity. The provisions referenced above are there because Congress and the USDA intended them to prevent the inequitable treatment of farmers. 

Finally, don’t give up if the lower levels of bureaucracy refuse to exercise the tools that are available to them. The cost of going to the next level is often far less than the savings that can be obtained.

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