Davis Minton set up the nation's first agricultural wetlands mitigation bank on his farm near Dexter, Mo. Other producers can buy "credits" from him. The process gives producers a cheaper way to mitigate their wetland acres.

A 73.7-acre field on Davis Minton's farm is being developed as the nation's first agricultural wetlands "mitigation" bank. Essentially, a wetland mitigation bank is a relatively large, restored wetland that can serve as compensation for several small, scattered wetland losses. The bank provides "credits" that can be bought by other landowners to compensate for wetland conversion activities ("debits") to satisfy state and federal wetland permit requirements.

The banking idea has been used by other industries, such as road builders and industrial/commercial developers. In these uses, the cost of a wetland credit (usually, each restored acre of wetland is equal to one credit) can run $7,000 or higher--out of reach for most farmers who want to mitigate wetlands.

Minton, who owns some 5,000 acres of cropland just south of Dexter in southeast Missouri, already had some experience at moving wetlands around on his farm.

"We had properties that were classified as wetlands," he said. "Some of them were small areas that prevented us from putting fields to grade. We got permission to move, or mitigate, these small wetlands to new wetlands developed here on the farm."

Thus was born the idea to form a wetland mitigation bank specifically for agricultural land. Minton talked with the USDA Natural Resources Conservation Service and the Missouri Department of Conservation about establishing a wetlands bank, which would let other farmers mitigate wetlands on their own property.

"Because of the wetlands restoration work I had done, I had some credibility with regulatory agencies," he said. "Still, it took four years from the time I had the idea until everything was approved."

No net loss
At this point, some history may be needed. During the Bush Administration (the first President Bush), the federal government decreed there would be no net loss of the nation's wetlands. The operable word here is "net." Before a wetland can be destroyed by drainage, grading or other land-forming activities, a new wetland of comparable size and quality must be established. The wetlands provision was included in the 1995 farm legislation.

"The corps [U.S. Army Corps of Engineers] had to sign off on the idea first by issuing a 404 permit," Minton recalled. "And DNR [Missouri Department of Natural Resources] had to approve it under the Missouri Clean Water regulations.

"But a lot of other regulatory agencies had to meld together their thought processes, too," he added. "We were proposing something brand new to them. EPA, the U.S. Fish and Wildlife Service and MDC [Missouri Department of Conservation] all had a keen interest in what we planned to do. It got to the point that I began to wonder if anything was going to happen."

Development efforts
But Minton had a passion for restoring wetlands, and he wanted it done correctly. So he went ahead with his plans to develop the wetland. The site he selected is adjacent to Otter Slough, a 5,000-acre wetland managed by the Conservation Department primarily as waterfowl habitat and bordered by drainage canals. The site includes ponds that are overseeded with millet and smartweed. This spring Minton is planting 20 of the 73.7 acres to pin oak, willow oak, bald cypress and other trees adapted to wetlands.

"I've got considerable cost in developing this wetland, and all of the costs come out of my pocket," said Minton. "I also must be bonded.

"But I want this done right, especially since this is the first wetlands mitigation bank for agriculture and will serve as an example," he added. "I've had a lot of technical help from NRCS and from the MDC people who manage Otter Slough. Every federal and state agency has the right to inspect what I'm doing here--and most have. They know this bank site meets all requirements."

"This pilot mitigation bank can offset the impacts associated with the conversion of farmed wetlands in southeast Missouri," said Chris Hamilton, NRCS biologist, "such as frequently cropped wetlands that may have been altered to improve drainage. Many farmed wetlands--even small wetlands--have significant benefits to flood control, water quality and wildlife habitat. However, when they are farmed on a yearly basis, their function degrades over time."

Advantage for farmers
"The main advantage to a landowner using the mitigation bank? It erases the wetland from his property deed completely," said Allan Johnston, NRCS wetland team leader at Cape Girardeau, Mo. "He can go ahead and drain or grade the entire field, as if the wetland had never been there. This also can help when you go to sell the land--some buyers don't like the idea of buying property with a wetland deed restriction."

With the purchase of credits in Minton's wetland bank, the landowner satisfies his mitigation obligation. Forever afterward, upkeep is Minton's responsibility.

Davis Minton charges $2,300 per wetland credit--about the going price for an acre of land in his area. To date, he has sold about 20 credits.

However, Minton doesn't pocket the money immediately. Instead, these funds are held in a sort of escrow account by the Agricultural Conservation Innovation Center, a project of American Farmland Trust.

A bank account
"We've set up a dedicated bank account in the name of Missouri Wetland Trust," said John Magistro of the innovation center. "This bank account idea meets the goals of both Davis Minton and the regulatory agencies involved. Minton didn't want the money from the sale of wetland credits to come to him piecemeal. Rather, he wants a source of funds to draw on as he completes his wetland restoration work."

"I didn't go into this hoping to make a fortune," said Minton. "Of course, I hoped I wouldn't lose a lot of money. But my main goal was to do this work, primarily to get the practice on the books."

Long-term objectives
Minton's development of agriculture's first wetland bank has been an educational enterprise--for Minton and for governmental agencies.

"I've got a better idea of what is involved in restoring a wetland of some size than I had when I began," he admitted. "My long-term objective is to have more than 600 acres in approved farm wetlands bank."

And he's looking into developing mitigating wetlands for other than agricultural landowners.

"I'm talking with the Missouri Department of Transportation about developing a 200-acre bank for wetland credits when MoDOT needs to mitigate a wetland they'll need to destroy to build a road," he added. "Other agencies are interested, too."

Here's how it works
Suppose you own an 80-acre field with a two-acre designated wetland smack in the middle of it. What are your options?

1. You can continue to farm the field as is, cropping around the two-acre wetland.
2. You can mitigate the wetland by developing another wetland of similar size and quality elsewhere on your farm.
3. You can buy credits in Davis Minton's wetland bank. In this case, it's as if your two-acre wetland never existed.