Sediment from soil erosion can clog wetland vegetation and impair water holding capacity. In 1982-92, decreases in all sources of water-caused erosion were widespread, occurring in 63 percent of the 677 wetland watersheds (watersheds with at least 5 percent of area in wetlands). Watersheds with erosion decreases contained 61 million wetland acres in 1992, while those with erosion increases contained 14.4 million wetland acres. Land retired from production in the Conservation Reserve Programalong with widespread changes in agricultural production practices caused by less intensive rotations, adoption of conservation tillage, and implementation of conservation compliance provisions in the 1985 Food Security Act-accounted for the erosion reductions.

Increases in irrigation can degrade wetlands where diversions from natural watercourses rob wetlands and other instream uses of water or where groundwater pumping lowers water tables and dries out wetlands. Similarly, decreases in irrigated area or in diverted water could improve wetlands. More wetland watersheds experienced net decreases in irrigated acreage between 1982 and 1992 than had net increases, but the majority had no change. Some 23 million acres of wetlands occurred in watersheds that

had decreases in irrigated acres, and 15.8 million acres of wetlands were in watersheds where irrigated acreage increased. Watersheds with increases in irrigated acres are largely in humid areas where irrigation supplements natural precipitation. Supplemental irrigation may cause short-term stress on affected wetlands, but long-term damage is less likely.

Loss of tree cover, both from permanent land-use change and from normal harvesting of mature tree crops, can stress wetlands. Tree canopy protects watersheds from runoff and erosion and shades watercourses, lowering water temperatures for sensitive aquatic species. While some areas were planted to trees in 1982-92, development of tree canopy in a decade is usually insufficient to replace loss of mature tree cover. Nine out of 10 wetland watersheds lost forested acres between 1982 and 1992. The loss of tree cover reflects both purposeful harvest and incidental clearing of trees associated with changes such as urban and agricultural development. Forest harvest is likely the major cause of deforestation in the Southeast, northern New England, Minnesota and Wisconsin, and the Pacific. Tree clearing for urban development is likely a major

cause in southern New England, the mid-Atlantic, and Florida.

Urban development, measured by the change in urban land area between 1982 and 1992, can stress wetlands because of increased runoff from paved areas, toxic runoff from industrial pollutants and chemicals and oils deposited on roadways, and from trash and garbage dumped in wetland areas. Nearly all wetland watersheds (96 percent) had urban land increases, adding 7 million acres of developed land over the decade. Urbanization in wetland watersheds represented 48 percent of total U.S. urbanization. More extensive suburban development patterns may have less impact on wetlands than intensive development, particularly where zoning and floodplain management avoid loss of wetlands and riparian areas.

The four indicators together provide insight on the overall change in wetland quality from 1982 to 1992 (table 6.5.3). Mostly negative indicators suggest that many more watersheds declined in quality than improved. Watersheds with wetlands likely degrading in quality (all four indicators negative or unchanged) totaled 206, just over 30 percent of the 677 wetland watersheds. The majority of the remaining watersheds (300) had more negative than positive indicators, suggesting a possible decline in quality (though the net effects of the positive and negative factors are uncertain). In contrast, only 2 watersheds likely had improving wetland quality (all indicators positive or unchanged) and 142 possibly had improving quality (more positive than negative indicators).

Wetland Incentives and Programs

Landowners respond to a variety of economic and public policy factors that influence wetland conversion. The recent reduction in wetland losses is likely the cumulative effect of several important trends: (1) decline in the profitability of converting wetlands for agricultural production; (2) passage of the Swampbuster provisions in the 1985 and 1990 farm bills; (3) continued implementation of the Clean Water Act Section 404 program, as well as growth in State regulatory programs; (4) greater public interest and support for wetland protection and restoration; and (5) implementation of wetland restoration programs at the Federal, State, and local level.

Economic Factors

Economic factors have, over time, both encouraged and discouraged wetland conversion. Between 1954 and 1974, relatively stable net farm incomes and new drainage technology contributed to wetland conversion for agricultural uses, averaging 592,800 acres per year. Cropland acreage increased in Florida (21.9 percent), Arkansas (16.1 percent), North Dakota (8.7 percent), and Iowa (7.7 percent). The next period (1974-83) saw an overall decline in farm income, accompanied by price volatility caused by international market pressures. These economic conditions, along with wetland regulations, slowed conversion to 234,800 acres per year. In 1982-92, falling prices, lower farm incomes, high debt loads, and the Swampbuster provisions reduced agricultural wetland conversion to only 30,900 acres per year.

Government payments to farmers have influenced wetland conversion over time. In 1954-74, government payments increased the revenue received for the commodities produced on converted land, reduced risk by stabilizing prices and revenue, offered an incentive to increase crop acreage base, and required additional land for set-asides. In 1974-83, real direct government payments dropped to only 9 percent of net farm income and were almost zero when commodity prices spiked between 1974 and 1977. In 1982-93, government payments averaged 26 percent of net farm income, but program rules no longer allowed participants to expand their base acreage and payments were denied to producers who converted wetlands after 1985.

The economic cycle in the construction sector has also affected wetland conversions. In 1954-74, postwar stability and a sharp increase in construction activity in the early 1970's resulted in wetland conversion for urban purposes averaging 54,400 acres per year. In 1974-83, wetland conversion for

developed uses fell to only 14,000 acres per year. Wetland regulation under Section 404, which began in 1972, probably affected the construction industry more than it did agriculture because of construction's greater visibility, its greater familiarity to EPA and U.S. Army Corps of Engineers (ACE) regulators, and its proximity to EPA and ACE offices in urban areas. In addition, recovery in housing construction occurred more in the West and Midwest, resulting in less wetland conversion for the necessary land because of the less frequent occurrence of wetlands in those regions.

In 1982-92, new housing starts sustained a renewed rate of wetland conversion for developed uses averaging 88,600 acres per year, primarily in the South. The increased wetland conversion occurred despite a perceived tightening of wetland regulation under Section 404 and in State programs since 1987.

Similar levels of economic activity in agriculture and construction do not produce similar wetland conversion from one time period to another (table 6.5.4). Wetland losses to agriculture dropped from 12.6 acres for each million dollars of net farm income in 1954-74 to 0.9 acres in 1982-92 (Heimlich and Melanson, 1995). Wetland losses dropped from 30.2 acres per 1,000 housing starts in 1954-74 to only 8 acres in 1974-83, then rebounded to 49.4 acres per 1,000 starts in 1982-92. In part, these observed differences in conversion rates can be explained by differences in the regional distribution of activity, in the type and size of housing constructed, and in expectations of future profits when a sector is contracting versus expanding. However, wetland

19953

Swampbuster. Indirect Federal assistance for wetland conversion was eliminated by the Swampbuster provision (Title XII C. P.L. 99-198) of the Food Security Act of 1985. The Swampbuster provision made a farm operator ineligible for price support payments, farm storage facility loans, crop insurance, disaster payments, and insured or guaranteed loans for any year in which an annual crop was planted on converted wetlands. Persons sanctioned for Swampbuster violations increased from only 12 in 1987 to 165 in 1991, but have dropped since then (table 6.5.5). Despite intensive debate, few changes were made to Swampbuster provisions in the 1996 Federal Agriculture Improvement and Reform Act.

Section 404 Permits. Wetland conversion is directly regulated by the U.S. Army Corps of Engineers and the Environmental Protection Agency, under Section

Source: USDA, ERS, based on U.S. Army Corps of Engineers, 1995.

404 of the Clean Water Act. Few permit applications under section 404 are actually denied. In fiscal year 1994, the Corps received 48,292 permit applications (table 6.5.6). Of these, 43,753 (91 percent) were authorized through general permits, standard permits, or letters of permission (affecting 17,200 acres); 4,184 (9 percent) were withdrawn (about half of which qualified for general permits, administrative adjustments, or were not required); and only 358 (less than 1 percent) were denied. The Corps estimates that an additional 50,000 activities are authorized each year by general permits that do not require the public to notify the Corps. Of 2,454 enforcement cases in FY 1994, only 70 (3 percent) involving the most egregious circumstances resulted in litigation or administrative penalties (U.S. Army Corps of Engineers, 1995).

Permits for agricultural activities were only 6.7 percent (3,430) of total permits considered in FY 1994. Of these, 87.5 percent were general permits, 11.7 percent were special permits, and 0.9 percent (30 permits) were denied. More than half of the agricultural activities that do require permits involve conversion of wetlands to developed uses. The vast majority of agricultural activities are covered by Section 404 (f) exemptions that preclude permits for "normal" farm activities such as plowing, seeding, cultivating, and harvesting. Most other activities associated with farming are also exempt as long as woody vegetation, if any, is not disturbed.

The Corps has been working to reduce permit evaluation time. While the number of permit actions increased 27 percent in 1990-94, average permit evaluation times dropped by 14 percent. General permit applications took an average of 16 days to process in FY 1994, while denied permits required an average of 164 days, for an overall average processing time of 27 days.

Restoration Programs

Restoration programs include activities to restore prior converted wetlands, enhance wetland function on existing degraded wetlands, and buffer wetlands from surrounding cropland uses.

Wetlands Reserve Program. Restoration of wetlands gained momentum in 1990 with establishment of the Wetlands Reserve Program (WRP). WRP has a goal of restoring 975,000 acres to wetlands by 2002. In the 1996 Farm Act, Congress reaffirmed the enrollment goal and required one-third of enrollments each in 30-year easements, cost-share agreements, and permanent easements. Farmers often express reluctance to cede rights to cropland permanently, and are generally more favorable toward shorter obligations (SWCS, 1994). The WRP program funds USDA to restore wetlands and purchase permanent or long-term easements to restrict agricultural use of the restored wetland. The landowner is allowed certain economic uses of the restored wetland that may reduce the cost of the easement. These uses include hunting, fishing, or other recreational activity, grazing during prescribed times, and selective timber harvesting that is compatible with wetland restoration. The landowner is paid up to 75 percent of the cost of restoring the former wetland.

Following successful WRP enrollments in 1992, 1994, and 1995, Congress appropriated $77 million in FY 1996 to retire more than 100,000 acres of cropland and restore them to wetlands. As of September 1996, USDA enrolled 315,175 acres from 1,769 landowners in nearly every State, out of more than a million acres offered (table 6.5.7). Expanding from 9 pilot States in 1992 to 20 States in 1994, WRP