Restoring and protecting natural floodplains reduces flood losses and benefits the environment. Photo: USDA NRCS.

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1 The Multiple Benefits of Floodplain Easements: An Assessment of American Recovery and Reinvestment Act-Funded Emergency Watershed Protection Program Floodplain Easements in the Upper Mississippi River Basin Restoring and protecting natural floodplains reduces flood losses and benefits the environment. Photo: USDA NRCS. American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 1

2 Introduction: In 2009, the American Recovery and Reinvestment Act (ARRA) was enacted to jumpstart the economy by putting people to work and investing in our nation s infrastructure. This Act has played a significant role in implementing projects that improve watershed conditions across the nation. As American Rivers reported in Putting Green to Work 1, ARRA has created meaningful opportunities to address water infrastructure, which has been woefully under supported in recent decades despite the critical services it provides. The purpose of this report is to summarize the flood damage reduction investments made in the Upper Mississippi River Basin (UMRB) through the Natural Resources Conservation Service (NRCS). The US Department of Agriculture received funding through the ARRA to advance shovel-ready projects across the country. One NRCS program that received funding was the Emergency Watershed Protection (EWP) Program administered by the NRCS. Under the EWP Program, NRCS funds projects that alleviate threats to life or property as well as slow runoff and prevent soil erosion. Founded on the ability of natural floodplains to store, slow and filter waters to protect property and Storing floodwaters on agricultural lands can help reduce flood damages downstream. Photo: Louis J. Maher, Jr. Floodwaters spread out in Pettibone Park in dowtown La Crosse, WI. Photo: Sara Strassman. citizens as well as minimize erosion and runoff, the EWP Program provides NRCS with the tool to pay landowners for the purchase of a floodplain easement that protects and restores these benefits of floodplain areas. The EWP Program received $145 million through the ARRA program to acquire floodprone agricultural lands nationwide. 2 This amounted to roughly 10% of the conservationdedicated funds that were administered by NRCS, which comprised less than 3% of the total USDA program budget for ARRA funds (see Figure 1). Figure 1: Total USDA program funds (including loans) from ARRA. Adapted from USDA Recovery. American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 2

3 Despite representing a small portion of the total $52 billion in USDA program funds, the floodplain easement projects yield significant returns through reductions in future flood damages, not to mention the host of secondary benefits that come from restoring natural floodplains, including habitat for fish and wildlife, improvements to water quality, areas for recreation and open space, and other benefits. 3 Ecologically, floodplains rank second only to estuaries in their value to society per acre. Though they represent less than 2% of Earth s terrestrial land surface, floodplains provide approximately 25% of all terrestrial ecosystem service benefits. 4 Ecosystem services are the multiple benefits people obtain from a healthy environment. They include things like farm land for food production, clean drinking water, natural flood management, and places to enjoy and explore nature. Landowners Submit a Flood of Applications: The UMRB has a tremendous unmet demand for investment in floodplain easements. Landowners with floodprone lands are seeking easements in large numbers. Figure 2 (below) shows the unmet demand for easements between 2008 and 2010, represented in dark green below as the acres applied but not awarded, ranged from 57% in Minnesota to 93% in Iowa. Key Findings: We found that there is a substantial unmet demand for investing in floodplain easements in the UMRB. Floodplain easements funded through the EWP-ARRA program will provide increased flood storage and reduction in flood damages. These benefits illustrate the need for continued robust funding for agricultural conservation programs, increased NRCS coverage and outreach, and increased NRCS efficiency through the prioritization of permanent easements. Figure 2. This figure illustrates the percentage of unmet demand (dark green portion) for floodplain easements in response to the ARRA-EWP program. American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 3

4 Increasing Flood Storage: Easements have the potential to provide significant flood storage. Based on the average depth of flooding from a 10-year storm, an estimated 8,000 acre-feet or more of storage will occur on lands with easements through the EWP-ARRA program. 5 At a state level, if we look at the amount of flood storage gained through these easements in Iowa based on a very conservative estimate of one foot of floodwater depth per acre in larger flood events, EWP-ARRA floodplain easements will store 21,056 acre-feet of floodwaters. This is equivalent to the amount of water found in East Lake Okoboji in Northwestern Iowa, or 10,388 Olympic-sized swimming pools. 6 Reduction in Flood Damages: According to the Federal Emergency Management Agency, flooding is the most frequent severe weather threat and the costliest natural disaster facing the nation. Ninety percent of all natural disasters in the United States involve flooding. The EWP-ARRA program contributed to reducing future flood damages. Consider that across the fivestate UMRB region there were more than 1,534 proposals requesting easements on roughly 104,992 acres of land (see Table 1). While the voluntary enrollment of all those floodplain acres in the EWP-ARRA program was estimated to cost $466.5 million, this cost is a very modest investment compared to the ongoing damages that occur in floods each year and is a costeffective way to gain the immediate and ongoing flood damage reduction benefits that are provided through the easement. As an example, agricultural flood damages in Wisconsin alone in 1993 totaled more than $800 million. 7 EWP-ARRA Provides a Successful Case Study Justifying Robust Funding for Agricultural Conservation Programs: A 2007 study of the La Grange Reach of the Illinois River evaluated the feasibility of naturalizing large areas of the floodplain. The study reported that a local economic impact of converting agriculture to floodplain was a key obstacle to restoring floodwater storage in floodplain areas. 8 By providing payment to local landowners, floodplain easements can address one of the factors limiting the extent and services of natural floodplains. Table 1. A summary of NRCS stimulus and supplemental EWP easements in the Upper Mississippi River Basin. * State Total Applicants Total Acres Applied Total value requested (in millions) Awarded Applicants Awarded Acreage Total value Awarded (in millions) IL WI IA MN MO ** UMRB Total * ** Data provided by NRCS EWP coordinators from each state. The estimate of acres applied in Missouri was based on average application acres. American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 4

5 Increased NRCS Coverage and Outreach: A key benefit to the ARRA funds is that it allowed NRCS to increase the coverage of the EWP Program to landowners who had not previously registered with USDA. States like Wisconsin and Missouri had many new applicants for the ARRA-funded EWP floodplain easements. These new participants expand the effectiveness of NRCS conservation programs by filling in the gaps between existing conservation areas. These properties also provide services to other farmers and nearby communities through the provision of flood storage and water quality services. Permanent Easements Help Increase NRCS Efficiency: Some states elected to prioritize the ARRA funds on permanent easements. Permanent easements increase the overall efficiency of the program because by doing so it allows for the minimization of a longterm federal role and provides the greatest benefits to the watershed and the communities living downstream. As these floodplains are repeatedly flooded in the future, they will establish high-quality habitat for wildlife as a secondary benefit to their primary purpose of flood damage reduction. estimated that 94 million acres of the United States lie within the 100-year floodplain. 9 This amounts to only four percent of the total land area nationwide, yet it represents an annual economic liability of billions of dollars in damages to crops, property, residences, businesses and infrastructure. By promoting restoration of floodplains in recognition of their critical infrastructure services, federal agencies can play a huge role in reducing risk to communities through restoring the natural floodplain condition, functions and value which in turn will ensure water quality and wildlife habitat among other benefits. The Upper Mississippi River Basin states were all within the top 15 states for flood damages between 1983 and 1999, with Iowa ranking number one. When compared to agricultural flood losses over a 10-year period ( ), the relative cost of the floodplain easements requested through the ARRA-EWP opportunity ( ) is very small (see Figure 3; comprehensive agricultural flood damage information for was not available). 10 Discussion: In 1991, the Federal Emergency Management Agency (FEMA) Figure 3. This figure compares the total cost of acquiring the entire number of easements under the ARRA-EWP opportunity (including the awarded and the unmet need from Figure 2) with the cost of agricultural flood damages within the five Upper Mississippi River Basin states over a ten year period. American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 5

6 Expenditures on floodplain easements in agricultural areas can directly reduce flood damages incurred in that sector by reducing risky practices in flood prone areas. Agriculture-related flood damages from the 1993 floods accounted for $3.8 billion of the $9.7 billion total losses (39%) and more than $8 billion in losses in the 2008 floods 11, approximately half of which came from flooded corn and soybean fields in Iowa. 12 The Upper Mississippi River Basin holds a significant opportunity to retire sensitive agricultural lands subject to frequent flooding and flood damages. Through the conservation and restoration of floodplains, NRCS can expand the definition of working lands and play a significant role in providing flood protection to communities downstream. A 1999 study found that restoring floodplain connectivity to as little as 14% of the floodplain along the La Grange Reach of the Illinois River could provide 100-year flood protection to an additional 44% of the floodplain, thereby reducing flood damages in downstream communities. 13 The Wetlands Initiative has estimated that restoring 3 million acres of wetlands that were converted to agriculture in the Upper Mississippi River Basin could store more than 40 million acre-feet of floodwater while providing habitat for wildlife and reducing flood damages downstream. 14 With more than 75 million acres in agricultural land uses in the UMRB, 3 million acres amounts to a little less than 4% of the total agricultural land in the UMRB. If all existing CRP, grassland, hay or pasture acres are excluded, the wetland conversion would require 5.8% of the remaining agricultural lands. Whatever the accounting method, there is little dispute that hazard mitigation through floodplain restoration and removal of structures in high-risk areas is the most economically efficient and guaranteed form of flood Upper Mississippi Watershed. Photo: USDA NRCS. damage reduction. Indeed, several reports confirm FEMA s estimate that every $1 spent on mitigation yields a return of $4 in avoided losses. 15 As such, floodplain easements are a highly efficient, bright green flood damage reduction strategy. Key Recommendations: Given the multiple benefits of investing in floodplain easements and the substantial unmet demand in the UMRB, we make six key recommendations that will provide guidance on how to continue investments in floodplain easements to increase flood storage, reduce flood damages, and provide other multiple beneficial services to communities and wildlife in the region. Congress should continue robust funding of an ongoing floodplain easement program. These data illustrate that the Upper Mississippi River Basin states have both a need for flood damage reduction and sufficient numbers of willing landowners to enter into voluntary easements. Indeed, ARRA presented a unique opportunity to landowners by offering them enrollment in an easement program without a preexisting natural disaster. This unique opportunity is illustrated by the 18% jump in the total number of acres American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 6

7 enrolled in EWP in the Upper Mississippi River Basin since These findings merit the establishment of a permanent, open-enrollment program that invests in the increased coverage of floodplain easements to benefit agricultural producers, increase resiliency to floods, and increase safety of downstream communities. NRCS should develop science-based guidance for state engineers regarding partial versus full removal of levees on properties with easements. Several UMRB states reported that a portion of current and past easement projects did not fully remove agricultural dikes or levees from properties. The reasoning for leaving these structures in place ranged from a desire to limit the amount of earth disturbance or tree removal that full removal would cause to issues such as the added cost of necessary engineering studies, a desire to maintain some hydrologic control, adjacent property owner concerns, scour protection, and other reasons. While each of these issues may be a valid concern at any given site, NRCS must provide guidance to its field staff to ensure that the impacts associated with accommodating these issues are balanced against maximizing the services of floodplain storage and reducing long-term intervention needs. NRCS should establish and implement a tracking system for a subset of the easements. This tracking would document flood levels and damage reductions, ensure establishment of a resilient, flood-adapted natural community, and provide landowner guidance for managing easement lands for floods as well as other compatible uses. The existing Conservation Effects Assessment Project (CEAP) or the Mississippi River Basin Healthy Waters Initiative (MRBI) programs offer one important opportunity to conduct an evaluation of floodplain easements. NRCS and USDA should collaborate with independent experts on economic research that evaluates the total ecosystem services associated with retiring cropland within the 100-year flood zone. This research should include evaluation of alternative funding sources for floodplain easements based on their provision of marketable ecosystem services. A recent report found that transactions for watershed services and water quality trading in the United States from roughly 1992 through 2008 amounted to $9.75 billion. 17 Congress should remove the land tenure requirements that generate unnecessary paperwork for landowners and NRCS staff. Requiring property owners to prove, and NRCS to verify, that a particular owner has held a piece of property for more than seven years adds an illogical eligibility barrier and creates another layer of paperwork for all parties. The requirement for property owners to have held a property for seven years prior to the installation of a conservation measure or easement ignores the increasing frequency of severe floods and the rising recurrence of flood damages in agricultural areas. Properties incur damages regardless of owner or date of purchase. Congress should restore the eligibility of public entities to partner on NRCS conservation programs. The 2008 Farm Bill made it much more difficult for public entities to be partners on EWP American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 7

8 and other NRCS conservation programs. In states such as Iowa, state and local conservation agencies had a history of providing cost-share to federal investments for the purchase of longterm easements. This practice provided a better rate for landowners and allowed state and local conservation agencies to spread their limited dollars farther by meeting objectives for riparian and aquatic species protection and restoration on lands where they could not afford to work alone. Conclusion: The findings of this report mirror the findings of Putting Green to Work. First, there is higher demand than funding currently available to support floodplain easements as a flood damage reduction approach. Second, like the Environmental Protection Agency s Green Project Reserve ARRA-funded program, some of the state programs administering the NRCS Emergency Watershed Protection Program selected and advanced projects that went above and beyond the short-term stimulus opportunity to have significant long-term damage reduction benefits with minimal future government intervention. Floodplain easements are one practice that can help landowners avoid future losses through restoration of natural conditions that can store water. Payments provided to landowners will put land to work providing flood storage. If landowners are reimbursed for flood storage-compatible uses of the flood-prone areas of their property, flood damages will be reduced. As a result, NRCS is uniquely situated to serve a critical role in reducing flood risks and flood damages in the Upper Mississippi River Basin. Easements through the Natural Resource Conservation Service can directly reduce future flood losses in the agricultural sector without requiring property acquisition. The restoration and reconnection of natural floodplains to accommodate flooding will have the added benefits of increased water quality, low-maintenance wildlife habitat and marketable recreational opportunities for landowners, tourism economies, and adjacent communities. Endnotes: 1 See American Rivers Putting Green to Work: Economic Recovery Investments for Clean and Reliable Water. 2 Website: USDA Recovery. Accessed Feb Task Force on the Natural and Beneficial Functions of the Floodplain, 2002.The Natural & Beneficial Functions of Floodplains: Reducing Flood Losses by Protecting and Restoring the Floodplain Environment. A Report for Congress. FEMA 409. Washington, D.C.: Federal Emergency Management Agency. 4 Opperman, J., et al, Ecologically Functional Floodplains: Connectivity, Flow Regime, and Scale. Journal of the American Water Resources Association 46(2): Based on conversations with NRCS staff. 6 See Supra note 6 and Iowa Lakeside Laboratory, CLAMP reports. Accessed Feb 2011: rt/clamp_reports.html. Copyright Wisconsin Department of Natural Resources, Bureau of Water Regulation & Zoning. Report: The Floods of 1993: The Wisconsin Experience. December Sparks, R. and J. Braden, 2007.Naturalization of Developed Floodplains: An Integrated Analysis. Journal of Contemporary Water Research & Education. Issue 136, pp Universities Council on Water Resources. 9 Brochure: U.S. Army Corps of Engineers, Institute for Water Resources Civil Works Floodplain Management Initiatives: Value to the Nation. April Pielke, Jr., R.A., M.W. Downton, and J.Z. Barnard Miller, 2002: Flood Damage in the United States, A Reanalysis of National Weather Service Estimates. Boulder, CO: UCAR. 11 U.S. Army Corps of Engineers.Website Flood Damage Summary Data Tables GIFs. Engineer Research and Development Center. Accessed 01/30/ American Farm Bureau Federation in Reuters: U.S. crop damage from weather tops $8 billion. By K.T. Arasu, June 25, 2008.Reported in AFBF press release of same date. 13 Akanbi, A.A, et al., An analysis on managed flood storage options for selected levees along the lower American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 8

9 Illinois River for enhancing flood protection. Report No. 4: Flood Storage Reservoirs and Flooding on the Lower Illinois River. Illinois State Water Survey Contract Report 645. Watershed Sciences Section: Champaign, IL. 14 Hey, D.; et al., Considering an ecological means to reduce flood damages in the Upper Mississippi River Basin. Chicago, IL: The Wetlands Initiative. 15 Rose, A., et al., Benefit-Cost Analysis of FEMA Hazard Mitigation Grants.Manuscript No NHR. See also Multihazard Mitigation Council (2005). Natural hazard mitigation saves: An independent study to assess the future savings from mitigation activities. Washington, DC: National Academy Press. 16 Based on the total number of floodplain easements from Data provided by USDA NRCS headquarters, March 22, 2011; numbers are subject to change. 17 Stanton, T., et al. Report: State of Watershed Payments: An Emerging Marketplace. Ecosystem Marketplace, a project of Forest Trends American Rivers: Multiple Benefits of Floodplain Easements, 2011 Page 9