There is an unfortunate, unintended, inherent contradiction between two government agricultural policies, or their administration, in Wisconsin. This interaction acts to defeat the intention of both policies, and it fleeces the average taxpaying citizen in the process.
“When you’re up to your armpits in alligators, it’s easy to forget you came here to drain the swamp.” This familiar old aphorism does not always apply these days. They’re not swamps anymore. They’re “wetlands”. And you ain’t s’posed to be draining ‘em, anyhow. Wetlands are now considered “useful” just like they are. They mitigate floods and prevent damage. (Wetlands that used to exist along the Gulf Coast would have prevented much of the catastrophic effect of the storm surge precipitated by Hurricane Katrina.) They help recharge groundwater aquifers that would otherwise become depleted. Wetlands clean surface water of biodegradable nutrients, and partially mitigate (by containment) persistent chemical pollutants. Retained wetlands prevent excessive erosion and the consequent topsoil loss and downstream sediment loads. Swamps, potholes, marshes, bogs, and fens, are critically important wildlife habitat, especially as “nurseries” and sources of food and shelter for virtually every plant and critter in the entire food chain. For both adults and kids who love nature, these natural wetlands are wellsprings of beauty, joy, knowledge, and inspiration, and the indispensable source of the fish and game that connect many of us to our ancient pre-industrial, pre-agricultural, roots. But let’s return to the tale of the two government policies.
The first policy is the Wisconsin Farm Use-Value Law, the purpose of which is to slow or prevent the rapid loss of farms in Wisconsin. It accomplishes this by taxing farmland for its value as farmland, not for its value in some other use, such as a residential subdivision, shopping center, or theme park. An important rationale behind this well-intended law was that farmland as a whole is the only developed property that paid substantially more in taxes than it used in government services. The motivation for the law was that taxing farm land for its value in some other hypothetical use would inevitably and quickly force it’s loss as farm land when development moved into an area, simply because no one could afford to pay the escalating taxes while continuing to farm.
The second policy is the federal and state Conservation Reserve Enhancement Program, a perennial feature of the U.S. Farm Bill currently under consideration. The purpose of CREP is to encourage the restoration, retention, and protection of wetlands and of stream and lake (riparian) buffers on farms. These features are of marginal direct economic value as farmland, but financial pressures often make it necessary to keep them in productive service as pasture or cropland. These various government programs encourage farm owners to restore and protect these ecologically significant features by providing incentives to take them out of agricultural production.
A tricky thing in Wisconsin’s farm use-value law is that only those portions of the farm that the assessor feels are currently in actual use to grow crops or as pasture are assessed for farm use value. Other portions of the farm, such as rock outcrops, wood lots, or swamps, potholes, stream and lake banks, are considered to be land “not in agricultural use”, and are thus assessed for their “market value” in some use other than as part of the farm.
If your farm is not currently in the sights of the developers, those wetlands and riparian buffers among your cultivated fields will have a market value which you may be able to bear with your farming income. But if the developers are salivating for your farm, the taxes on those bogs and potholes and stream buffer strips that you can’t sell even if you wanted to, will skyrocket beyond belief. Currently, the actual taxes per acre on wooded riparian buffers between plowed fields in some regions of Wisconsin have risen to 25 times their use-value taxation if they were used as pasture.
Consider an actual 95-acre farm parcel, with no improvements, with 65 acres tillable, and 30 acres of pasture that, due to cessation of dairy cattle pasturing, has become restored wetlands and riparian buffers. The 30 acres of wetlands and buffers use absolutely no government services, and actually provide important environmental services. Yet those 30 acres currently cost more than twice as much, in taxes, as all 65 acres of tillable, productive cropland cost. If those 30 acres were put back in pasture, the taxes on them would be reduced to one-eighth of the total taxes on the adjacent 65 tillable acres, instead of twice as much.
Only the federal and state CRP and CREP wetlands and riparian buffer protection programs qualify for use-value taxation in Wisconsin. Unfortunately, other valuable programs, such as the Wetlands Reserve Program, are not on the qualifying list. If a farm owner takes land out of production and enrolls it in the Wetlands Reserve Program, those acres will be subject to unlimited increases in taxes, depending solely on how badly developers want to get the farm. A farm owner who has chosen to voluntarily initiate protection of wetlands and riparian buffers, or who did so before the CREP program was even a gleam in the guvmint’s eye, will also be subject to those unlimited future tax increases.
The most appalling Catch-22 is that farmers who have protected wetlands and buffers voluntarily, at no cost to taxpayers, cannot now enroll those wetlands and buffers in the qualifying CREP program. And the infuriating reason is that the farmer is already doing exactly what the government wants him to do. So the farm owner who voluntarily protects wetlands and streams gets double whacked. He doesn’t get any annual subsidies. But even worse, he gets taxed 25 times what the guy collecting the subsidies gets taxed.
What’s the solution for this farm owner’s frustration? Either sell the whole farm to developers. Or (if it is still possible) tear up the buffers, repair the fences, and run the cows there again. If he does that, ironically, after several years he can qualify for enrollment in the CREP program and collect the initial and annual payments for taking that farmland out of production. And, of course, that way he will also retain the use-value taxation, and thus save the farm.
That’s what I mean by an unfortunate interaction between two government policies that are administered in a way that defeats the intent of both policies. And it’s a pretty ridiculous example of the federal and state governments punishing, with both hands, a conscientious farm owner for doing, at no cost to taxpayers, exactly what the government would gladly pay another farmer to do.
Of course, another option would be for the government to fix this mistake. Not a bad idea. The future results of not doing so are both ominous and insidious for wetlands and riparian buffer protection on Wisconsin farms, and for the protection of those farms themselves. The Feds should allow enrollment in CREP of voluntary, previously established buffers and wetlands protection, even if initial and annual subsidies are not paid for them. Alternatively, Wisconsin courts, legislators, and/or administrators should require that those equivalent voluntary buffers and wetlands which were previously established on Wisconsin farms be classified the same, for tax purposes, as those which were established and maintained by the payment of subsidies. If neither of those just and reasonable minor reforms are forthcoming, then, in the interest of justice, the CREP program should be scrubbed from either the currently proposed National Farm Bill or from the Wisconsin Farm Use-Value Law.