In our last article, we examined and gave a general overview of the USDA’s “Swampbuster” Act, which sets out conservation practice requirements for farmers who participate in USDA programs. Particularly, we discussed different situations where farmers may run afoul of the Act and the penalties that can be imposed for violations. In this article, we will discuss options that exist for farmers who find themselves facing a violation under the Act.

To begin, and as stated in the prior article, I cannot stress enough the importance of getting professional help to assist with a violation under the Act. The penalties for violations consist of losing eligibility for USDA program benefits AND repayment of past program benefits. I have seen farmers faced with paying back millions in benefits due to a violation not being detected for years, if not decades, by NRCS. Not only will you be faced with paying back money you received, but you will be faced with paying back money you never directly received, in the form of crop insurance premium subsidies. So, the stakes are high and it is no time for a farmer to start do-it-yourself lawyering. The number one reason for not getting help, according to surveys, is the farmer could not find someone versed in this area. My response: the internet. While it is true it appears this area the law is short on attorneys, search out someone, even if they are states away, that can help you. Because the USDA programs are federal programs, in the vast majority of states an attorney does not have to be licensed in the state you are in to help you. And, in the post-CV19 era, FSA accommodates distance with phone and video hearings on wetland violations. Thus, do not let the distance from legal counsel be a turn off to you.

There are generally two types of wetland violations. First, is a wetland conversion where lands not currently farmed are cleared and/or tiled to allow for crop production. The second is a planting violation, which is the planting of an agricultural commodity on a converted wetland. In most cases, the farmer incurs both violations because the farmer converts the wetland (1st violation) and then plants an agricultural commodity on the wetland (2nd violation). For a wetland conversion, the farmer is ineligible for each and every year the wetland was capable of crop production, both past, present, and future, no matter if an agricultural commodity is planted on it or not. For planting violations, the farmer is ineligible for each year an agricultural commodity is planted on the wetland.

Fortunately, the Act provides for various exemptions that can give reprieve to a farmer facing violations. Like in the game of Monopoly, an exemption is a farmer’s “get out of jail free” card. In the wetlands game, I call it the “get out of the USDA’s swamp free” card.

Once NRCS believes a wetland violation occurs, it sends notice over to the Farm Service Agency (FSA). From there, the FSA sends notice of the violation to the farmer and informs the farmer that he/she is ineligible for program benefits. However, a farmer can ask for a Minimal Effect Exemption (MEE) from NRCS.  With an MEE, the farmer asks the NRCS to determine that the conversion has no meaningful or measurable effect on the overall wetlands in the adjoining areas. Take, for example, a quarter acre grove of trees in the middle of a field. Even if it is a wetland, the NRCS could determine the conversion of the wetland does not have an effect on the surrounding wetlands. In this case, an MEE could be granted by the NRCS.

There are two different types of minimal effect determinations, those made prior to a conversion and those made after. A person seeking to convert a wetland can ask NRCS to make a minimal effect determination and NRCS is required to make a determination if a minimal effect designation is warranted. This is referred to as a pre-conversion determination. The rules also permit farmers to seek minimal effect determinations after a wetland has already been converted, so as to receive an MEE. However, the burden will be on the person who requested the determination to demonstrate that the effect is minimal to the satisfaction of the NRCS. Unfortunately, the criteria for a minimal effect designation varies among the states, so there is no uniformity. For example, a farmer could be granted an MEE in Indiana, but not in, say Arkansas, for the exact same wetland. However, if an MEE is granted, it is a golden ticket out of the swamp and alleviates the violation. Generally, if not almost always, it pays for a farmer to at least ask for a minimal effect determination to ensure that a violation is, in fact, a violation. Even better, if an MEE is granted the converted area can thereafter be farmed.

Probably the most common exemption is a Good Faith Exemption (GFE). With a GFE, it is as if the USDA is saying “yes, you violated Swampbuster, but you really did not mean to, so we’re going to give you a pass.”  As with an MEE, a GFE is also a golden ticket out of the USDA swamp. However, there are several criteria the Agency must examine before good faith is granted.

First is whether “the characteristics of the site were such that the person should have been aware that a wetland existed on the subject land.” If you convert a pristine wetland with cattails, ducks, etc., it’s doubtful you’ll meet this criterion.  However, most wetland conversions I have been involved with involve land that the common person would not view as a wetland. Farmers are (generally) not versed in what makes a wetland a wetland under the NRCS’s criteria. So, if the converted area is something that does not have obvious characteristics of a wetland, the farmer will likely pass this criterion.

Second is whether “NRCS had informed the person about the existence of a wetland on the subject land.” This gets a little murky and turns on whether the farmer was told something generic from the NRCS like “there are some wetlands on that farm” versus “that area right there is a wetland.” In any event, in the vast majority of the cases I have been in, the farmer had no indication from NRCS of the existence of any wetlands on the farm. Thus, in these instances, the farmer passes this criterion.

Third is whether “the person did not convert the wetland, but planted an agricultural commodity on converted wetland when the person should have known that a wetland previously existed on the subject land.” This criterion deals with planting violations and mostly comes in to play when the farmer knows he converted a wetland prior, or someone else did prior, and the farmer goes ahead and plants.

Fourth, “the person has a record of violating the wetland provisions of this part or other Federal, State, or local wetland provisions.” Over the years, this seems to be the heaviest of the five criteria. If it is your first violation, you stand a decent chance of getting good faith, even if one of the other five criteria go against you. If you have had prior violations, in my opinion, this will really drag on your case. I am not saying someone with a prior violation cannot get a GFE. However, I believe the other four criteria need to really weigh in favor of the farmer to overcome the prior violation(s).

Fifth, and lastly, “There exists other information that demonstrates that the person acted with the intent to violate the wetland provisions of this part.” I’ve only seen this count against the farmer when the farmer had good reason to believe the converted area was a wetland or did something to try and hide the conversion.

With an MEE, the farmer will not get to farm the converted area. In fact, one of the conditions in being granted an MEE is that the farmer must enter into a restoration plan with NRCS. Meaning, the farmer either has to restore the wetland or mitigate via the purchase of wetland credits, creating new wetlands, or other measures.

Another exemption is a Third Party Exemption (TPE). This is where a third party does something that causes the conversion. One case I saw was where a neighbor replaced a large amount of tile. The tile caused a wetland area on my client’s land to drain and enabled it to be farmed, so he planted it. My client was cited for a violation, but we were able to show it was the neighbor’s tiling activities that caused the wetland to go dry. So, he qualified for a TPE for the conversion violation. A more common scenario is when a landlord decides to convert a wetland. Under FSA rules, the farmer is presumed to be in control of the farm. Well, try telling that to the landlord that wants to take out 20 acres of woods so he can get more yearly rent. If a farmer can’t talk sense into the landlord to not convert a wetland area, and the conversion occurs, a TPE may offer relief for the farmer who is held responsible for the conversion.

The above is not an exhaustive discussion on exemptions but represents what I would consider to be the most common. Regardless, receiving an exemption can avoid the payback of large sums of past program benefits and keep a farmer eligible.

In closing, it is important to remember that the provisions of Swampbuster do offer lifelines out of the USDA swamp for a farmer. It will generally come down to getting the correct professional help, seeking out the most applicable exemption, and showing that you pass the necessary criteria for the exemption. Next month, we will talk about the appeal procedure that exists for farmers to try and obtain relief from violations.

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 20 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.