Environmental policy invariably seems to be created in a melodramatic
world of good-guy government officials and bad-guy private interests.
Actual history plays no discernable role in how policy is made.
Consequently, bad policy is adopted to cover up earlier bad policy.
In 1991, the Minnesota Wetlands Conservation Act (WCA) was passed
with only a dozen of the 201 members of the combined Minnesota legislature
dissenting. The lopsided margin of the vote probably most reflected
the popularity of protecting wetlands (or the unpopularity of opposing
such protection), and not an accurate understanding of the causes
of wetland drainage.
The WCA passed amid hysteria over the purported loss of over half
of our wetlands and that environmental calamity was imminent. The
truth, however, was that the bulk of drainage in Minnesota happened
between 1900 and 1915, immediately following a state-wide public
works project to drain swampland. Drainage virtually ceased until
after World War II, but then resumed during the post-war agricultural
boom and continued until the late 1950s, when legislation was passed
at the behest of Minnesota duck hunters allowing tax relief to those
who preserved wetlands. By the early 1970s, the legislature required
that the Commissioner of the Department of Natural Resources and
drainage authorities examine environmental and conservation criteria
before establishing drainage projects. In the mid-1970s, the Army
Corps of Engineers was ordered as a result of Natural Resources
Defense Council, Inc. v. Callaway to match the EPA's jurisdiction
over wetlands, that is, the "Nation's waters." By the
1980s, a combination of factors, the "Swampbuster" provision
in the federal Food Security Act of 1985 which withheld farm subsidies
from farmers who drained wetlands, and falling commodity prices
and land values, caused wetland drainage to slow to a trickle. Finally,
by 1991, the tile drain systems in Minnesota were old and clogged
with years of accumulated vegetation, and were often in disrepair.
Notwithstanding these trends, one report used as a basis for the
WCA findings claimed that 11 million acres of the state's wetlands
had been drained between 1982 and 1992. Because of the legislative
and economic events affecting agriculture in the 1980s, there is
good reason to be suspicious of this. In fact, in 1996, when citizens
mounted a modest effort to make changes in WCA, evidence surfaced
showing that the claim of 60% drained wetlands wildly overstated
the problem in Minnesota. USDA surveys showed that a mere 26,000
acres, or 1/18th of one percent of the state's wetlands had been
drained during this time. In addition, what seemed more likely,
was that despite particular locations being drained, the aggregate
acreage of Minnesota wetlands had been increasing for some time.
No matter, a crisis is a crisis.
The story of the Minnesota WCA is an important one because it illustrates
four phenomena that are common to almost all situations where environmental
problems arise. First, government seeks to create economic development,
underwrites large public works projects to support it, and ultimately
uses statutory schemes to change property rights which stand in
the way of that development. Second, the development occurs, new
reliances are fostered, and the externalities of that development
become problematic. Third, the externalities of the development
are attributed to private activity. And finally, fourth, sweeping
legislation is passed which further undermines property rights.
The story in Minnesota begins with the westward expansion in the
mid-19th century. At this time, "wetlands" were called
"swamps" and were looked upon as evil incarnate, as places
of "treachery, mires of despair, homes of pests, and refuges
for outlaw and rebel," according to one Ohio judge in Reeves
v. Treasurer. Missouri granted farmers the power of eminent domain
to fill swamps for agricultural purposes. The U.S. Congress passed
the Swampland Act of 1850 to "enable the State... to construct
the necessary levees and drains to reclaim the swamp and overflowed
lands therein, the whole of those swamp and overflowed lands made
unfit thereby for cultivation, which shall be unsold at the passage
of this Act, shall be, and the same are hereby, granted to the said
The federal government saw its ownership of these lands as liabilities
and wanted to divest itself of them hoping that the locals could
make something out of them and settle the continent. In fact, until
1977, Congress promoted this policy through the Agricultural Conservation
Program which helped farmers convert swampland for agricultural
Minnesota's first major initiative, however, came in 1897 when
it instituted a state-wide ditch drainage system. At the heart of
this project was a vision of state-wide economic development and
its consequences for public finance. From an economic development
point-of-view, however, common law property rights were a major
impediment. Under common law, drainage rights were limited by reasonableness
without the consent of adjacent landowners. Large-scale drainage,
however, required a statutory scheme to organize, build, and finance
the drainage infrastructure, and finally to make consent of potential
hold-outs (i.e. those whose land was already relatively dry) irrelevant.
The costs of the ditch system was assessed to land, whether occupied
Fortunately for these planners, common law property rights had
been under attack for nearly a half century. Nuisance law had steadily
moved from its common law trespass origins to a more social utilitarian
benefits and burdens analysis. In Ryan v. New York Central, for
example, a farmer whose crops were ignited by sparks from passing
trains was without a remedy in light of the social benefit of the
expanding railroads. When economic development was at stake, property
rights, particularly the right to be free of nuisance, typically
Shortly after Minnesota instituted its state-wide ditch system,
9 million acres - roughly half of the state's wetlands - were drained.
Nearly all of this drainage was for agriculture. As a direct result
of this project, agricultural production which otherwise was not
economically viable flourished in Minnesota.
In short order, though, groups of Minnesotans began noticing the
environmental change was not all positive. Hunters were upset by
declining duck and geese populations and lobbied for the protection
of waterfowl habitat. In 1934, the federal government began selling
"Duck Stamps" to fund purchases of habitats. In 1951,
Minnesota passed its first real wetlands legislation, the Small
Wetlands Program authorizing the purchase of these lands for wildlife
management areas, funded in part by hunting license fees. In 1957,
the Minnesota Water Bank Act authorized even more purchases of critical
habitats, not merely for the benefit of hunters, but as an extension
of overall state water policy. Subsequent changes in the law followed
as detailed above.
What is important to understand is that the negative externalities
attributable to this period of development arose because of Minnesota
statute and government policy, not because individual property owners
decided on their own to drain wetlands. In many cases, drainage
of the land preceded private ownership of it (even if speculators
who knew the scope of the project actually held title); the state
was acting as the developer. Consequently, those who purchased the
land took it subject to the assessment of the project and in reliance
of the land being drainable indefinitely. But for the drainage project,
most of this land would probably not be privately held.
When the WCA was being debated in 1991, the allegations of environmentalists
predictably centered around how the excesses of the market economy
and the selfishness of private property owners led to the present
state. The response was - silence. It was simply unthinkable that
government-as-economic-developer could have created the problem.
Recently, PBS aired the documentary Cadillac Desert where this
same scenario was played out, but the geographical facts were reversed.
The Central Valley in California is a desert during most of the
growing season. At the turn of the century, the U.S. Congress was
trying to foster family farming and awarded 160 acre tracts in the
Valley for that purpose. An underground aquifer supplied water and
farming was relatively successful for a while. But then, the aquifer
began to drop, and the land began literally to drop with it. In
response, the federal government began the Central Valley Project
(CVP) to bring snowmelt from Sierra Nevada mountains to irrigate
desert land in the Valley. The CVP, although initiated prior to
the New Deal, was finished and opened under Franklin Roosevelt.
Its maze of dams, aquaducts, and pumping stations was called the
largest public works project since the Great Wall of China. Eventually,
the Central Valley became the richest agricultural area in the world.
The CVP provided water at a fraction of the actual cost for irrigation.
Despite the desert climate, Valley farms produced crops which were
more suitable for a wet climate, like say, Minnesota. Ultimately,
the CVP began to unravel in the 1970s after grossly deformed ducks
were discovered in a waterfowl preserve contaminated with the trace
mineral selenium, accumulated from the run-off of billions of gallons
of artificially transported water. The culprit here? Corporate greed,
of course. While the Central Valley is still a large agricultural
producer, the artificially favorable economics are being phased
out, and the Valley's reversion to desert is not far off.
Both Minnesota's drainage law and the CVP were epitomes of central
planning in the pursuit of large-scale economic development. It
is absolutely clear that it was government policy to alter the environment
first, and then establish property interests second. The depressing
fact of these two cases, however, is that the remedy for centralized
planning in which property rights are altered and lost always seems
to be more centralized planning and a further loss of property rights
after the initial plan runs amok.
Minnesota drainage law and the CVP illustrate what happens when
government programs and property rights get intertwined. The public/private
partnership between property owners and government leaves property
owners blamed for the problem and the government liability strictly
*John Povejsil is a Minnesota attorney and leader in the Minnesota
Lawyers Federalist Society Chapter.