Ch. 1— Summary • 75 



Issue lA: Options to increase Federal involvement 

 in managing wetlands 



Federal involvement could be increased by 

 adopting any or all of the following options, which 

 are listed roughly in order of decreasing Federal 

 control over wedands use, program costs, and costs 

 to developers. How significant these changes would 

 be is unknown. A single new wedands statute could 

 be developed to combine existing policies with any 

 of the following options; however, if changes are 

 desired, it would likely be easier to modify existing 

 statutes individually. 



Option 1 : Broaden the scope of section 404 through 

 legislation. 



Increase the types of activities covered by sec- 

 tion 404. — Projects responsible for the vast ma- 

 jority of past wetland conversions (excavation, 

 drainage, clearing, and flooding of wetlands) are 

 not explicitly covered by section 404 or regulated 

 by most Corps districts. Increasing the types of ac- 

 tivities covered by section 404 could reduce wet- 

 land conversions resulting from nonagricultural ac- 

 tivities. Agricultural activities are so numerous that 

 it would be impractical to regulate all of them; how- 

 ever, it is probably possible to regulate large-scale 

 conversions. At present, not all clearing operations 

 are regulated and few modifications or denials are 

 made, even on those that are. 



Explicitly address wetland values in section 

 404. — Because the term "wetland" is used only 

 once in section 404 and is not defined, the objec- 

 tives of C WA with regard to wetlands are open to 

 interpretation. The regulation of wetland-clearing 

 operations, particularly in bottom land areas, has 

 been the subject of constant controversy. If wet- 

 land values were addressed explicidy in section 404, 

 the Corps would have a clear mandate to consider 

 and protect the integrity of wedands (including hab- 

 itat values) as well as water quality. If this were 

 done, many wetland-clearing operations falling 

 within the Corps' jurisdiction could be controlled. 



Option 2: Remove the incentive for agricultural 

 conversions. 



Eliminate tax incentives for agricultural con- 

 versions. — The cost of agricultural conversions to 

 a farmer can be reduced through tax credits and 



deductions for costs associated with clearing and 

 draining activities. Tax incentives could be reduced 

 or eliminated for these activities if they occurred 

 on wetlands. However, the effect of this change on 

 wetland use would probably vary. In some areas 

 of the country, wetland conversions could become 

 unprofitable; in other areas, conversions probably 

 would still be profitable even without Federal tax 

 incentives. 



The effects of eliminating these tax incentives 

 would be insignificant to the vast majority of 

 farmers and on the farm economy. For example, 

 deductions for wetland conversions were less than 

 0.3 percent of all farming deductions in 1980. In 

 addition, because of the relatively large acreage 

 of available cropland (i.e., 365 million acres), 

 neither commodity prices nor farm production 

 as a whole would be noticeably affected over the 

 near term if agricidtural conversion of wetlands 

 were curtailed or eliminated. Nonetheless, elim- 

 inating tax benefits to farmers for wetland conver- 

 sions will never be popular. 



Increase appropriations for the Water Bank 

 Program. — The Water Bank Program, funded at 

 $8.8 million in 1982 and 1983, preserves wetlands 

 and adjacent uplands covered by the program for 

 10-year lease periods. Because the program is ap- 

 parently popular with the agricultural communi- 

 ty, additional appropriations would allow increased 

 enrollment and greater coverage of wedands in agri- 

 cultural areas. The program might also be more 

 attractive if payments were increased or adjusted 

 annually in response to changing pressures to con- 

 vert wedands rather than every 5 years, as it is now. 



Encourage wetland preservation through the 

 Payment-in-Kind Program.— In 1983, USDA in- 

 stituted its Payment-in-Kind (PIK) Program, 

 wherein farmers withdrew cropland from produc- 

 tion in exchange for commodities that would have 

 been produced on the cropland. In fiscal year 1983, 

 approximately 82 million acres of cropland were 

 taken out of production as a result of the PIK Pro- 

 gram. However, many farmers are apparently si- 

 multaneously putting other land, which could in- 

 clude wetlands, into production. If the PIK Pro- 

 gram is used in future years, it may be possible to 

 include special provisions that would encourage the 

 preservation of wetlands. 



