12 CapitalPress.com
July 14, 2017
Economic incentive to turn farmland into wetlands alarms some
WETLANDS from Page 1
Wetland banks in Washington
1
“We saw a new industry,
the wetland banking industry,
starting up,” Rozema said.
“It was a business model to
essentially make money off
converting farmland to anoth-
er use.”
Skagitonians
opposed
the Clear Valley bank at the
county level, arguing the
plan would violate the state
Growth Management Act’s
goal of conserving farmland.
Eventually, the Skagitonians
and Clear Valley made a deal.
The deal depended on
county commissioners ban-
ning more wetland banks on
farmland. Also, Skagitonians
will get $6,000 for every cred-
it Clear Valley sells. Skagito-
nians anticipate eventually
getting about $1.5 million to
spend on buying development
S k ag
Colum
2
3
17
Chelan
1
4
6
5
River
2
Seattle
Spokane
7
Wenatchee
3
Moses Lake
Olympia
WASHINGTON
mbia
C ol u
11
Yakima
r
Ri v e
im
a
Ri
v
er
Le w
12
Kennewick
4
13
Portland
Wetland mitigation banks
m
C olu
bia
Don Jenkins and Alan Kenaga/
Capital Press
Value of farmland
Approved Banks
Banks under review
7. Springbook Creek
• Owner: City of Renton;
cooperated with Washington
State Dept. of Transportation
• Acres: 129
2. Skagit Environmental Bank
• Owner: Clear Valley
Environmental Farm
• Acres: 396
8. Weatherwax
• Owner: C ity of Ocean
Shores
• Acres: 120
3. Nookachamps
• Owner: Nookachamps, LLC
• Acres: 310
9. Chehalis Basin
• Owner: TransAlta Centralia
Mining
• Acres: 176
12. Coweeman River
• Owner: Privately owned
• Acres: 320
13. East Fork Lewis
• Owner: Privately owned
• Acres: 113
14. Terrace
• Owner: Privately owned
• Acres: 113
15. Columbia River
• Owner: Port of Vancouver
• Acres: 115
5. Skykomish Habitat
• Owner: Privately owned
• Acres: 260
10. North Fork Newaukum
• Owner: Natural Resources
Conservation Service;
Washington State DOT
• Acres: 230
16. Moses Lake Three Ponds
• Owner: City of Moses
Lake; managed by
Washington State DOT
• Acres: 12
6. Snohomish Basin
• Owner: Privately owned
• Acres: 225
11. Long Beach
• Owner: Privately owned
• Acres: 76
17. Meadowcraft
• Owner: Privately owned
• Acres: 13
rights to farmland to keep it in
agricultural uses.
So far, the group has re-
ceived about $44,000 from
the 7.38 credits sold for
$963,090 to the Port of Skagit
for an airport project.
Rozema said that if the
money was piling up more
quickly, that would mean the
countryside was being de-
veloped more quickly. “In an
ideal world, there would be no
money going into it,” he said.
To the Skagitonians, a bet-
ter outcome would have been
no wetland mitigation bank
at all. But a potential, less at-
tractive alternative was more
housing developments. Plus,
the settlement meant not hav-
ing to fi ght future banks and
provided money for farmland
preservation.
“It was a good deal. I think
it sets a model for how we
want to operate in the future,”
Rozema said.
The county’s ban doesn’t
shut the door entirely on new
wetlands. The ban applies to
land of “long-term commer-
cial signifi cance for agricul-
ture.”
A landowner can also apply
to have the property rezoned.
“We’re trying to be respect-
ful of people’s private-party
Sources: Washington State
Department of Ecology;
Capital Press research
er
R iv
14 15
1. Lummi Nation
• Owner: Lummi Indian
Reservation
• Acres: 1,945 (three sites)
4. Paine Field
• Owner: Snohomish County
• Acres: 59
a
Sn
is
Longview
Ya
k
*As of March 2017
er
litz Rive
r
Cow
R iv
9
10
16
ke
8
River
‘New industry’
r
ive
it
R
Banks’ history
Federal agencies originat-
ed wetland mitigation banks
in the 1980s to allow devel-
opment, including highway
construction, without a net
loss of wetlands. Many states,
including Oregon, Idaho and
California, have wetland
banks. Most are usually cre-
ated on land historically used
for agriculture.
Washington, a relative late-
comer to the practice, has 17
banks, with at least four more
in the works. The Morgan
family’s wetland mitigation
bank would be Washington’s
largest on non-tribal land and
more than double the size of
the next largest bank. About
250 cows graze there now on
bottom land where the Lewis
River fl ows into the Columbia
River in Clark County.
The Ecology Department
praises wetland mitigation
banks for their environmental
benefi ts and economic incen-
tives to create wetlands.
But that economic incen-
tive to turn farmland into
wetlands has alarmed some
pro-agriculture groups, in-
cluding Skagitonians to Pre-
serve Farmland in Skagit
County in northwestern
Washington.
Although only 4 percent
of Washington’s cropland is
west of the Cascades, agri-
culture remains an important
industry in Skagit County.
Holding on to that industry
has local political support.
“We’re an anomaly,” Skagi-
tonians Executive Director
Allen Rozema said.
A decade ago, Clear Val-
ley Environmental Farm, a
California company, pro-
posed converting 396 acres
of farmland in the county into
wetlands. The proposal came
soon after another California
company had created a 310-
acre bank in the same area.
r
ve
Bellingham
i
The price depends on the
demand. Credits are often
broken up and sold by the
square foot. One credit can
reportedly sell for anywhere
from a little under $200,000
to more than $1 million.
“The prices for credits
are all handled by the private
marketplace,” Ecology shore-
lines program manager Gor-
don White said. “These are
private transactions.”
rights,” Rozema said.
Rozema said he won’t be
surprised if more wetland
banks are created in other
Western Washington counties
as the economy and popula-
tion grow.
“Being in the business of
wetland mitigation banking is
probably a good business,” he
said. “It would appear to me
to have a big future.”
‘Wants to be wet’
But the future might not
be that big, said Victor Wood-
ward, the owner of Habitat
Bank and the entrepreneur be-
hind several wetlands mitiga-
tion banks in Western Wash-
ington.
Woodward created West-
ern Washington’s fi rst pri-
vately owned wetlands bank
in 2006 in Snohomish Coun-
ty, which is wedged between
Skagit County and Seattle
and growing even faster than
Clark County. The previous
banks were set up by public
agencies seeking to offset
their projects that were built
on wetlands.
Woodward said that 30 of
the bank’s 140 credits have
sold so far. The demand is
limited, he said.
The credits must be bought
in the same watershed as the
development. Plus, govern-
ment agencies must issue per-
mits to fi ll in wetlands in the
fi rst place. “The demand (for
credits) is really controlled
by the issuance of permits,”
Woodward said.
A credit in rural Clark
County, where Woodward has
also created a wetland bank,
sells for about $170,000, he
said.
He said he anticipates
credits for wetlands he’s de-
veloping on 91 acres in the
city of Redmond in King
County to be worth around $1
million each. The property is
known locally as the Keller
Farm, a former dairy now in
a city with a population of
60,000.
Woodward said that he’s
worked with dairy farmers
“desperate” to get out of the
industry and expects to be
involved in more wetland
banks, including in Clark
County.
“We do need to eat, but I
don’t see where we’re going
to have that much of an im-
pact,” he said.
Woodward said he once
gave a presentation to skepti-
cal farmers, concerned about
the effect on agriculture. Af-
Pending mitigation banks
1. Blue Herron
• Owner: Port of Everett
• Acres: 344
2. Keller Farm
• Owner: City of Redmond
• Acres: 91
3. Port of Tacoma
• Owner: Port of Tacoma
• Acres: As many as 152
(distributed over 19 sites)
4. Wapato Valley
• Owner: Privately owned
• Acres: 876
terward, one approached him
about converting his land into
a wetland bank.
“It can work in some cases,
but with very limited cases. I
can’t emphasis enough, you
have to have the right kind
of property because you can’t
pay too much for the land or
for restoration because you
might not get the payback for
10, 20 years,” he said.
“You want to fi nd a site
that was wet, wants to be wet
and is easy to restore to wet-
lands,” Woodward said. “I do
see where farmland is being
converted, but I think they
tend to be wet, wet situations,
where it’s diffi cult to keep
farming.”
Morgan farm
In Clark County, the Mor-
gan family farm has been in-
undated by at least three ma-
jor fl oods in the past 70 years.
David Morgan’s grand-
parents, Aubrey and Con-
stance Morgan, bought the
farm in 1941 and named it
Plas Newydd, Welsh for “new
place.” They had a dairy un-
til the fl ood of 1948 wiped it
out. The Morgans then raised
Angus cattle, but the ’56 fl ood
helped end that, David Mor-
gan said. The pastures had
‘They’re just buying ... all wheats now, which probably isn’t really sustainable’
WHEAT from Page 1
Dark northern wheat general-
ly has a high percentage of pro-
tein — more than 14 percent —
and soft white wheat has a lower
percentage of protein, usually
below 10.5 percent.
Higher protein generally in-
dicates higher gluten content.
High gluten content is important
for baking light, yeast-leavened
breads.
Nearby DNS futures prices
are higher than futures prices
later on, said Clark Johnston, a
marketing consultant in Ogden,
Utah.
“That’s because the demand
is outrunning the supply,” he
said. “The market is saying,
‘We need your wheat right now,
we’re not going to give you an
incentive to hold it until after
the first of the year.’”
The DNS price increase
prompted speculators to move
into the other wheat classes, said
Dan Steiner, grain merchandis-
er for Morrow County Grain
Growers in Boardman, Ore.
Soft white wheat ranged
from $5.50 to $5.60 per bush-
el in Portland this week. That’s
up from $4.40 to $4.60 a bushel
in April. Hard red winter wheat
ranged from $5.51 to $6.20 per
bushel, up from $4.97 to $5.17 a
bushel in April.
“For soft white, six months
ago, you’d have thought, ‘This
would be a great price,’” Steiner
said. “But when you’re looking
at $9 wheat (for DNS), it’s like,
‘Gee, can we have some more of
that?’”
“They’re just buying ...
all wheats now, which prob-
ably isn’t really sustainable
in Chicago futures because
soft wheat and dark northern
spring wheat are two com-
pletely different things,” Behne
said.
Lower protein soft white
wheat has less gluten than DNS
and is used in Asian noodles,
cakes, pastries and flat breads.
“I don’t really see this ending
well for soft wheat unless we
end up with a corn problem later
on,” Behne said.
Corn prices would need to in-
crease to pull excess soft wheat
supplies into livestock feed
channels and boost demand,
Behne said.
Wheat futures were nearly $2
over corn futures, making the
spread too high for farmers to
buy it for livestock.
“We have a big soft white
crop coming again this year,”
Behne said. “Without some feed-
ing going on, I don’t know how
we’re going to chew through
that.”
Wheat needs to trade at
roughly $4.95 per bushel to be
viable for feed, Steiner said.
Steiner isn’t sure how long
the higher prices will last.
“I had no idea this rally was
going to be this big, that it was
going to go this far, or how long
they’re going to push this,” he
said.
Behne and Johnston both ex-
pect an eventual drop in prices.
But weather forecasts indicate
heat will continue in the spring
wheat production areas of the
Northern Plains, Behne said.
to be restored again after the
1996 fl ood.
The land has a distin-
guished history. The farm’s
two-story house was built
circa 1850 by Columbia Lan-
caster, Washington territory’s
fi rst delegate to Congress. The
farm also has a barn built in
the 1880s. The house and barn
are both on the National Reg-
ister of Historic Places.
The farm is just a few
miles west of Interstate 5, not
far from a new tribal casino
and expanding subdivisions.
“The rest of the farms in
Ridgefi eld are really stress-
ing, watching homes go in,”
Morgan said. “The whole
family doesn’t want to turn
this into houses.”
In June, Ecology also
certifi ed a 113-acre wetland
mitigation bank in Vancou-
ver, south of Ridgefi eld. The
privately owned land was
historically a mint farm. Corn
harvested in 2014 was the last
crop grown there, according
to the bank’s records.
Johnston advises farmers to
look for futures bids that are
in keeping with current cash
prices, and contract their wheat
now before prices begin to de-
cline, particularly in the other
classes.
If DNS gets to be too expen-
sive, some end-users won’t want
it, he said, which will impact
cash markets.
“There’s been a 90-cent
spread between the high and the
low of the day,” he said. “When
that kind of stuff happens, I start
to get a little nervous about this
market.”
In recent tenders, Russia
sold wheat to Egypt at $5.80
per bushel and Romania at
$5.75 per bushel. France of-
fered wheat at $6.10 per bush-
el, while U.S. wheat prices
were $8.03 per bushel, Steiner
said.
“We’re not remotely close to
being competitive on the world
market,” he said. “(Prices are)
spectacular, but probably a sell-
ing opportunity (for farmers), I
would guess.”
Clark County Farm Bu-
reau President Bill Zimmer-
man said he once leased land
in the area to grow vegetables.
“Beautiful soil there,” he said.
“It would grow just phenome-
nal crops.”
Zimmerman said public
offi cials are too dismissive of
farmland’s benefi ts to the en-
vironment.
“When the farmer owns
the land, it’s not worth any-
thing. If it’s wetlands, it’s
worth something,” he said.
“We hear all the time that the
only value agricultural land
has is as a land bank for future
development.”
Some 96 percent of Wash-
ington’s cropland is east of
the Cascades. The two East-
ern Washington wetland mit-
igation banks total 25 acres.
Woodward, however, said he
is interested in creating more.
Demand for credits would
probably be less than in West-
ern Washington, but convert-
ing 100 to 200 acres could
mitigate for construction proj-
ects over a large geographical
area because of the size of
many of the region’s water-
sheds, he said.
“I’m sure there would
be a lot of skepticism from
farmers in Eastern Washing-
ton,” Woodward said. “But
compared to the land being
chopped into 5 acres or 20
acres for housing develop-
ment, this is a drop in the
bucket.”
At Plas Newydd, creating
wetlands will involve remov-
ing levees, fi lling in drainage
ditches and moving dirt to
turn pastures into fi sh habitat.
Portions of the land, ac-
cording to a notice from Ecol-
ogy and Army Corps, “have
been degraded by cattle graz-
ing and agricultural activities.”
Morgan said that he hopes
he can still graze some cows
on the property, though that’s
yet to be decided.
The tree farm on the prop-
erty will remain in produc-
tion, and the land will stay in
the family, he said.
“I get to retain ownership
of the property,” Morgan said.
“It takes all the development
pressure off.”
OWRD’s method
challenged in past
SHUTDOWN from Page 1
Mallams’ lawsuit is not the fi rst time that
OWRD’s method of gauging groundwater
pumping impacts on surface water has pro-
voked controversy.
In 2014, lawmakers proposed several bills
requiring the agency to prove that individual
wells were affecting surface fl ows before taking
enforcement action.
The proposals were divisive in the agricul-
tural community, with some irrigators arguing
they’d disrupt Oregon water law while others
claimed they’d protect water rights.
According to OWRD, the new testing re-
quirements would have cost the agency $80,000
per well. Ultimately, the bills died in committee.
Aside from Mallams’ petition, the agency’s
decision to restrict irrigation in the Klamath re-
gion is facing several other lawsuits this year.
Reacting to a “water call” from the Klamath
Tribes — which have the most senior “time im-
memorial” water rights — OWRD has issued
orders halting irrigation on roughly 300,000
acres of land.
Since early June, irrigators have fi led four
lawsuits disputing the agency’s rationale for en-
forcement action.