Wetlands Reserve Program


Program Basics

Under the Wetlands Reserve Program (WRP), USDA purchases long-term or permanent easements to restore, protect and enhance wetland values and functions on eligible wetland that has been in agricultural production. The program is competitive, with landowners submitting bids to USDA for enrollment. USDA may also enter into restoration cost-share agreements and provide technical assistance to WRP participants. Through FY2007, nearly 2 million acres of restored wetlands were enrolled in the WRP. USDA’s Natural Resources Conservation Service (NRCS) administers the WRP.

2008 Farm Bill Changes

The Farm Bill raises the total acreage cap for the WRP from 2.275 million acres to 3.041 million acres through FY2012. A new provision is included for 30-year WRP contracts, equivalent in value to a 30-year easement or restoration cost-share agreement, on land owned by Indian Tribes. With some exceptions, the Farm Bill prohibits the enrollment of land whose ownership has changed during the previous seven years if the acquisition was for the purpose of enrolling the land in the WRP.

The following additional factors now influence the USDA’s evaluation of landowner offers for enrollment in the WRP:

  • the conservation benefits of the offer;
  • the cost-effectiveness of the easement or other interest in order to maximize the environmental benefits per dollar expended; and
  • whether the landowner or another person is offering to contribute financially to the cost of the easement.

The farm bill retains the requirement that total WRP and Conservation Reserve Program (CRP) acreage not exceed 25 percent of a county’s farmland acreage, and a requirement that land enrolled in the WRP under easements not exceed 10 percent of a county’s farmland acreage. Under a new provision, however, CRP land that is enrolled through the Continuous CRP or the Conservation Reserve Enhancement Program is exempted from this 25 percent acreage cap.

The 2008 Farm Bill also amends the appraisal process. Under the 2002 Farm Bill, landowners sometimes lost compensation for easements because of a misguided administrative interpretation of a farm bill stipulation that required the USDA to subtract the fair market value of the land as a WRP easement from the fair market value of the land before WRP enrollment. The 2008 Farm Bill eliminates that stipulation and states that easement payments are not to exceed the lowest of: (1) the fair market value of the land, as determined by USDA using appraisal or area wide market analysis or survey; (2) a geographical payment cap as determined by USDA; or (3) an offer made by the landowner.

The new farm bill also amends the payment terms for payments over $500,000, which are now to be paid in 5 to 30 annual installments unless USDA grants a waiver to allow a lump-sum payment if it would further the purposes of the WRP. For easements of $500,000 or less, the easement payment will continue to be paid in a lump sum or in not more than 30 annual payments, at the option of the landowner. Landowners have generally chosen lump sum payments. The Farm Bill also limits the total cost-share payments to $50,000 annually to an individual or legal entity, directly or indirectly.

The new farm bill also has legislative authorization for the Wetlands Reserve Enhancement Program (WREP), which USDA launched using administrative authority in 2004. Under the WREP, states, non-governmental organizations, or Indian Tribes may partner with USDA on the selection and funding of WREP contracts for projects that meet the requirements of the WRP. The WREP includes a pilot program under which landowners are allowed to retain grazing rights if the grazing activity is consistent with long-term wetland protection and enhancement goals for which the easement was established.

The 2008 Farm Bill amended the eligible land requirements by expanding the WRP to include cropland or grassland that was used in agricultural production prior to flooding from the “natural overflow of a closed basin lake or pothole” together with adjacent land that is functionally dependent on the cropland or grassland. This provision is aimed at Devils Lake in the prairie pothole region of North Dakota.

Finally, the 2008 Farm Bill now requires USDA to submit a report to Congress by January 1, 2010 on implications of the long-term nature of conservation easements. USDA is also required to conduct a survey during FY2008 and each subsequent fiscal year to determine the interest and funding allocations to enroll land in the Prairie Pothole region in the WRP. USDA is also required to adjust WRP allocations to interested states based on the previous fiscal year’s survey.

Title II, Subtitle C (Sections 2201-2210) of the Food, Conservation, and Energy (FCEA) Act of 2008 amends Section 1237 of the Food Security Act of 1985, to be codified at 16 U.S.C. Section 3837.

Key Aspects of the WRP

Eligible Land — The land must be private or tribal land that is farmed wetland or converted wetland, together with adjacent lands that are functionally dependent on the wetlands. However, converted wetlands whose conversion was not commenced prior to December 23, 1985, are not eligible. Cropland or grassland that was used for agricultural production prior to flooding from the natural overflow of a closed basin lake or pothole together with adjacent land that is functionally dependent on the cropland or grassland is also eligible for WRP enrollment.

USDA may also choose to include farmed wetlands and adjoining lands enrolled in the Conservation Reserve Program with high wetland functions and values, if the land is likely to return to production after the CRP contract expires. CRP land that contains timber stands or pasture land established to trees, however, is not eligible for WRP easements.

Land whose ownership has changed hands under the previous 7 years is not eligible for a WRP easement, unless the ownership was acquired by will or succession as a result of the death of the previous owner, occurred because of foreclosure and immediately before foreclosure the mortgage holder sought a right of redemption, or the USDA determines that the land was acquired under circumstances that give adequate assurances the land was not acquired for the purpose of placing it in the WRP.

In addition, total enrollment in WRP and the Conservation Reserve Program (other than land enrolled through the CCRP or CREP) may not exceed 25% of a county’s farmland acreage, and total enrollment in the WRP alone may not exceed 10% of a county’s farmland acreage. If a county reaches either of these acreage limitations, no more land in the county is eligible for enrollment in the WRP.

Enrollment Options – Landowners may offer to enter into permanent easements or easements of the maximum duration allowed under state law, 30-year easements, or shorter term wetland restoration cost-share agreements or any combination of these enrollment options.

Enrollment options for acreage owned by Indian Tribes include 30-year contracts, the value of which is the same as a 30-year easement, restoration cost-share agreements, or a combination of these two options.

Determining Compensation for Enrollment Offers — In determining the payment for a WRP conservation easement the Secretary shall pay the lowest of:

  • the fair market value of the land, as determined by USDA, using the Uniform Standards of Professional Appraisal Practices;
  • an area wide market analysis or survey;
  • the amount corresponding to a geographical cap, as determined by USDA in regulations; or
  • an offer made by the landowner.

Ranking Criteria for Accepting Enrollment Offers — USDA is required to give priority to obtaining permanent conservation easements before shorter term conservation easements and to place a priority on easements with the highest value for protecting and enhancing habitat for migratory birds and other wildlife.

In evaluating offers for WRP enrollment, USDA may give higher priority to offers that:

  • provide higher conservation benefits;
  • maximize the environmental benefits per dollar expended; and
  • leverage landowner or third party financial contributions to the cost of the easement or other interest in land.

USDA may also choose to consider the extent to which the purposes of the program would be achieved, the agricultural productivity of the land being offered, and the on-farm and off-farm threats to the environment if the land is used to produce agricultural commodities.

Payment Provisions – For easements valued at $500,000 or less, easement payments may be provided in lump sum or in not more than 30 annual installments. For easements valued at more than $500,000, easement payments may be made in 5 to 30 annual installments, unless the USDA determines that a lump sum payment for the easement would further the purposes of the WRP. Presumably any offers that are accepted into the program would further the purposes of the program.

Restoration cost-share agreement payments made to a person or legal entity, directly or indirectly, may not exceed $50,000 per year.

If USDA enters into a WRP restoration cost-share agreement, in the case of a permanent easement, USDA pays at least 75% but not more than 100% of the eligible costs. For a 30-year easement or other restoration cost-share agreements, USDA pays at least 50% but not more than 75% of the total eligible cost. USDA is also required to provide landowners with technical assistance in complying with the terms of easements and restoration cost-share agreements.

Landowner Duties in WRP Agreements – In return for WRP easement payments, landowners agree to grant an easement, implement a wetland easement conservation plan, create and record a proper deed restriction in accordance with state law, and provide written consent from those holding a security interest in the land. The landowner must also agree to the permanent retirement of any existing cropland base and allotment history for the land under any program administered by the USDA.

The wetland easement conservation plan requires that the landowner carry out a number of activities to restore wetland functions and values to the land. The WRP agreement may allow compatible economic uses on the land, including hunting and fishing, managed timber harvest, or periodic haying and grazing, if the use is specifically permitted by the plan and consistent with the long-term protection and enhancement of the wetland resources for which the easement was established.

Funding

The 2008 Farm Bill caps the WRP at 3.014 million acres through FY2012. The annual enrollment goal for the WRP is cut from 250,000 to 185,000 acres. To continue to fund the WRP at a sufficient level to enroll 250,000 acres per year, Congress would have needed to provide $1.9 billion over the next five years, but instead it opted to fund the WRP at $1.3 billion over that period of time. However, some additional WRP funding authority is carried over from the last farm bill cycle, sufficient to bring the total for 2008-2012 to $1.9 billion.

Wetlands Reserve Program (WRP) Funding

2008

2009

2010

2011

2012

5 year cost

10 yr cost

$574 M

$464 M

$308 M

$300 M

$290 M

$1,936 M

$1,936 M

Based on the Congressional Budget Office’s estimation of how many landowners will enroll each year and at what price.

Please note: The funding levels in the chart above show the amount of mandatory funding reserved by the 2008 Farm Bill for this program to be provided through USDA’s Commodity Credit Corporation. However, Congress does at times pass subsequent appropriations legislation that caps the funding level for a particular year for a particular program at less than provided by the farm bill in order to use the resulting savings to fund a different program. Therefore, despite its “mandatory” status, the funding level for a given year could be less than the farm bill dictates should the Appropriations Committee decide to raid the farm bill to fund other programs under its jurisdiction.

Implementation Basics

USDA’s Natural Resources Conservation Service (NRCS) administers the program.

NRCS issued an interim final rule for the WRP, see http://edocket.access.gpo.gov/2009/pdf/E9-735.pdf. The interim final rule took effect on January 15, 2009. Public comments on the Interim Final Rule were due on or before March 16, 2009. To read NSAC’s comments on the interim final rule, see http://sustainableagriculture.net/wp-content/uploads/2009/03/nsac-comments-on-wrp.pdf.

An amendment to the interim final rule, was published June 2, 2009. Most importantly this amendment gives NRCS the authority to restore and manage land under a WRP easement area if the landowner does not carry out activities in a Wetlands Reserve Plan of Operation or if the WRP acreage is transferred to another owner who will not carry out the Plan.

Without the amendment, NRCS could impose penalties for failure to carry out a Plan but could not agree with the landowner in the WRP contract to authorize NRCS to ensure that a Plan was fully implemented.
NRCS has not yet promulgated a final rule for the WRP.

Additional Resources

USDA website for the Wetlands Reserve Program

Access your state NRCS office at this website