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F-M Diversion Authority Plans Payments to Upstream Landowners, Crop Insurance for Farmers


For those farming land on the wet side of the Fargo-Moorhead Diversion Authority’s proposed Red River dam, persistent questions about how they would be compensated now has a clearer answer.

The detailed mitigation plan the authority recently submitted to state regulators in North Dakota and Minnesota includes a crop insurance plan for farmers and payments to landowners for any reduction in land value.

North Dakota lawmakers, who have also wanted more details about compensation, will be briefed Thursday, Sept. 22.

Rocky Schneider, a spokesman for the Diversion Authority, said the crop insurance was a response to farmers’ fears that summer flooding would wipe out crops that, because of the artificial flooding caused by the dam, wouldn’t be eligible for federal crop insurance. “We’ve heard that loud and clear.”

The plan, which went out to regulators a couple of weeks ago, does seem to address some of the criticisms that upstream opponents of the diversion project have leveled at the Diversion Authority, such as inadequate compensation and the need for repairing infrastructure damaged by the project. However, Nathan Berseth, a spokesman for the main opposition group, the Richland-Wilkin Joint Powers Authority, said he couldn’t respond immediately because the authority didn’t send his group the plan.

Barb Naramore, assistant commissioner with the Minnesota Department of Natural Resources, said the agency is reviewing the plan but she can’t say when it would issue a dam permit.

Overall, the Diversion Authority expects to pay for impact to 83 square miles on the dam’s wet side, a larger area than initially discussed. It also expects to buy 11 square miles to build the diversion channel and dam. The cost of both are estimated to total $400 million.

Some buyouts have already started while others won’t take place for years. The process for upstream landowners and farmers won’t formally begin until January 2018 though the Diversion Authority said it would accept early offers.

Land values

The mitigation plan addresses several categories of landowners and farmers on the dam’s wet side, which would run from an area south of Horace, across the Red River and about six miles into Minnesota.

The purpose of the dam is to reduce the flow of water headed downstream during a major flood so communities there aren’t swamped. The result is a temporary lake that would drain when the flood ends. According to the plan, the Diversion Authority would give owners a one-time payment for the lost value of their land caused by the higher flood risk, known as a “flowage easement” in legal parlance.

Farmers who rent land could use that as a basis to renegotiate rents, according to Schneider.

But easement payments will vary depending on land elevation. Since severe floods are very rare, land on the wet side that’s at higher elevation would see very small payments. According to the plan, the owners of those lands would have the option of getting paid only if there is physical damage.

Initial discussion of flowage easement focused only on land expected to get at least a foot of water during a 100-year flood, the minimum required by the federal government. That totals around 50 square miles. The Diversion Authority’s plan calls for easement on land with at least half a foot of water expanding coverage another 33 square miles. Land that get less than half a foot would get the option of payments for damages.

Crop insurance

On agricultural land, which is most of what’s on the dam’s wet side, the greatest impact on value is the potential for delayed planting because floods here happen in the spring, based on studies the Diversion Authority has funded. There has never been a major summer flood in the area’s recorded history.

That doesn’t mean there never will be such a flood and farmers do worry about it. The Diversion Authority has discussed a crop insurance program similar to federal crop insurance that would cover 65 percent of crop values. Upstream opponents said that wasn’t enough and the mitigation plan now calls for 90 percent coverage. Based on 2014 crops, the maximum exposure for the Diversion Authority is $20 million to $25 million in the event of a summer flood destroying all crops.

The mitigation plan also addresses the four organic farms totaling 2,900 acres on the wet side, which risk losing their organic certification if flood waters sit on the land too long. The Diversion Authority would, in that case, offer to buyout the land early and allow farming to continue while the farmers seek certification on new lands, which takes three to five years.

Besides mitigating harm to agriculture, the plan also addresses buyouts of about 100 homes on the wet side, including relocation costs; reducing impact to 11 cemeteries; and cleaning and repairing infrastructure damaged by operation of the diversion project.

On the Web: To see the mitigation plan, go to www.fmdiversion.com/wp-content/uploads/2015/02/FM-Diversion-Mitigation-Plan-v1-reduced.pdf.

Source: Agweek

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