In Minnesota's farm country, clean water is costly

Taxpayers spent nearly $125 million last year to clean up Minnesota lakes, streams and groundwater contaminated by farming, according to a Star Tribune analysis of state and federal budget data that highlight agriculture's increasingly prominent role as a source of water pollution.

That total amounts to more than half the annual budget of the Minnesota Pollution Control Agency, and it helps explain a contentious debate emerging across the state over agriculture and the environment. In large parts of southern Minnesota, half the rivers and lakes are often unsafe for swimming and fishing, according to a state survey published this year.

The sum also underscores how Minnesota's environmental efforts often work at cross purposes with farm policy. Last year the federal government provided Minnesota farmers with more than $600 million in subsidies. While that figure pales next to the global market forces that shape the state's $19 billion farm economy, many of those incentives are specifically linked to the intensive row-crop agriculture often implicated in rural water contamination.

State officials now worry that Minnesota may never catch up with the much larger national and international forces that drive agriculture and its impact on water.

"We can't spend our way out of this," said John Linc Stine, commissioner of the MPCA. "We don't have an effective strategy to limit pollution."

Farmers say subsidies protect an industry that is vital to Minnesota's economy and compensate them for what can be costly conservation measures.

Patrick Lunemann, a dairy farmer near Clarissa, Minn., and president of the Minnesota Milk Producers Association, likened the farm program to other large government initiatives such as health reform. It's good for the country and for farmers, he said, adding: "But it needs to be fixed."

While farmers have been altering Minnesota's landscape for more than a century, the toll is now becoming increasingly clear. The state Health Department recently called farm-related nitrate pollution "a growing chemical threat" in the state's drinking water, with some 45 communities now trying to slow or reverse excessive nitrate levels in their public water systems. And a survey this year by the Minnesota Pollution Control Agency found that in some parts of the state, fewer than 1 in 5 streams and rivers are generally safe for swimming.

Altogether, the average annual cost to protect and clean up water from farm-related threats, calculated by the Star Tribune from agency records and budget documents, includes more than $74 million in state and county funds. Another $49 million comes from federal sources, according to the Environmental Working Group, a nonprofit that analyzes federal agricultural data to advocate changes in farm policy.

That money pays for items ranging from concrete slabs to contain livestock manure and biofilters to cleanse field drainage water to "cover" crops that hold soil and farm chemicals during winter and the spring melt.

It does not include the $100 million in annual federal conservation payments that encourage Minnesota farmers to keep sensitive land out of production, for reasons that include protecting water from fertilizer and pesticide runoff.

But for every $1 taxpayers spend protecting water from agriculture, farmers receive roughly $5 in subsidies that encourage them to plow more land and plant more crops.

In recent years the federal government has provided Minnesota farmers an average $659 million annually designed to reduce their risk and provide stability to the nation's food system.

The biggest source is now federally supported crop insurance, which the government subsidizes at the rate of 62 cents on the dollar, or an average of $452 million a year for Minnesota farmers. In addition, Washington has sent Minnesota farmers an average of $207 million in direct payments annually over the last five years; that program was just replaced with a new one that in its first year paid them hundreds of millions of dollars to offset low commodity prices.

Economists and ecologists say it's impossible to specify exactly how much farm subsidies contribute to water pollution. Government subsidies are just one piece in a complex global food economy, and they represent just 3 percent of total receipts generated by Minnesota farmers last year.

However, there is no question that the farm bill "is a huge driver to what's happening on the landscape," said Dennis Fuchs, director of the Soil and Water Conservation District in Stearns County, where subsidies exceed $14 million a year.

Though farm subsidies can be imperfect, they protect thousands of families and small operators against agriculture's notorious volatility.

"My income over the last 20 years — that line is government subsidies," Lunemann, the dairy farmer, said. "Without that, I'm a nonprofit. It's sad, but true."

While only one part of a farmer's decision, their impact on the landscape takes many forms. Because only certain crops qualify for federal support, subsidies "really create an incentive [for farmers] to just stick with corn and soybeans," said Craig Cox, a vice president at the Environmental Working Group.

The result: vast stretches of monoculture that require seasonal applications of fertilizer and pesticides across half the Minnesota landscape.

Subsidies can also play a role in encouraging farmers to take risks that turn out to harm the environment. From 2008 to 2012, land devoted to crops in Minnesota increased by more than 300 square miles, carved out of native grasslands, wetlands and forests. That was part of a much larger Midwestern transformation driven mainly by high corn prices, according to a study by Tyler Lark, a research scientist at the University of Wisconsin.

But it also showed, Lark said, that when prices were high, farmers moved onto marginal, vulnerable land partly because they were protected from financial risks by crop insurance.

In addition, the nation's renewable fuel standard, which requires 10 to 15 percent ethanol in every gallon of gasoline, inflates the demand for corn, said Catherine Kling, an agricultural economist at Iowa State University.

The clash between environmental goals and farm subsidies is not lost on officials at the Minnesota Department of Agriculture, which is using a $9 million federal grant to recognize farmers who are model stewards. The agency might seek additional water funds from the Legislature in 2016.

"We want a stable, reliable, affordable food supply — with clean water," said Matt Wohlman, assistant commissioner of agriculture. "That's been a constant agriculture policy rub for a long time."

Many of these contradictions come into view on Ken Schefers' land in Stearns County. The 500-acre farm he owns with his brother is well diversified, with a variety of crops and livestock, and they have been certified by the state as stewards of water quality.

This year the family built a $150,000 concrete pad to stop livestock manure from leaching pollutants into the ground, with a state subsidy covering part of the cost. But Schefers also participates in the federal crop-insurance program. He wasn't convinced it was worth the hefty premium he helps pay. But then a check for $16,000 landed in his mail box — an insurance payment for the wet spring of 2014.

"Farmers are in denial about their role in water pollution," he said. "If taxpayers are paying out this kind of money to farmers, I think they have the right to demand a minimum conservation standard."

The 2014 farm bill moved in that direction. For the first time since 1996, the law requires farmers with crop insurance to also take steps to prevent runoff from land identified as highly erodible. It's not a small amount: About half the cropped acres nationally are vulnerable to erosion and the runoff of polluted water.

The new rule is designed to "try and get farmers to do the right thing on the threat of withholding subsidy benefits," said Otto Doering, an agricultural economist at Purdue University. Similar incentives have worked in the past, he said: They were directly linked to a significant decline in soil erosion between 1982 and 1997 and deterred planting on sensitive land, according to studies by the U.S. Department of Agriculture (USDA).

Cox, however, said the provisions require only minimal steps to reduce runoff and soil erosion, and said it's not clear how vigorously the USDA will enforce them. A higher standard, he added, might require farmers to plant strips of natural vegetation between their fields and streams, for example, and keep livestock away from water.

If farmers took those steps, he said, then the millions of dollars taxpayers spend to protect and clean up water would go much further. "This is a huge opportunity," Cox said.

But progress is likely to be slow and expensive. Consider Stearns County, which spent $6.5 million last year to protect water from farm runoff, including $1 million from county taxpayers.

One of the county's flagship projects involved a 200-head dairy farm two miles upstream from the Mississippi River on a tributary called Johnson Creek. The farmers moved their feedlot away from the stream, added manure storage and settling facilities to keep manure from the water, and planted a natural-vegetation buffer along the stream bank. The bill came to $340,560 — half from the owners and the rest from a small grant, state and federal funding.

The changes will cut nitrogen and phosphorus runoff into Johnson Creek by 200 pounds every year and virtually eliminate the spread of E. coli from the farm's manure.

Yet state officials say bringing bacteria levels down to the point where Johnson Creek will again be safe again for swimming and fishing will take another 20 years and many other similar projects along its banks.

Stine, the PCA commissioner, said he tries not to be fatalistic about the scope of the problem. After all, without Minnesota's environmental efforts, pollution would be much worse: In some farm states, he said, all the lakes and streams are polluted.

Still, without a shift in the balance between farm economics and the funds available for environmental protection, the state has just one option.

"To be more strategic in where we invest our money," he said. "It is daunting."

Josephine Marcotty • 612-673-7394.