Allen's Blog

South Florida’s Everglades Agricultural Area (EAA)

E. Allen Stewart III P.E.—January 25, 2018

Discussion 4 of 5

How can the EAA Best Serve the People of Florida? The Need for Long-Term Economic and Environmental Review 

Introductory Note: There is an immediate need to develop additional reservoir and treatment capacity within the Everglades Agricultural Area (EAA) in  an effort to significantly reduce diversionary discharges to the Caloosahatchee and St. Lucie Rivers, and to provide access to a sufficient quantity of high quality water for the Everglades National Park (ENP) . I support these efforts, but must note that deep reservoirs and unharvested Stormwater Treatment Areas (STA) are interim measures—an issue I will address in future discussions. This fourth blog on the EAA is a discourse on the long-term fate of the EAA and the level of objective economic evaluation required to make rational decisions regarding continued use of the EAA for typical agricultural cultivation, particularly as it relates to sugarcane.   

Florida depends  upon its natural beauty and its unique and diverse ecosystems  to help fuel a lucrative tourist industry and ensure its citizens a high quality of life. Florida also relies upon agriculture to sustain its economy. Without effective long-term policies, the two can become conflicted,  resulting in decisions based upon emotionalism rather than rational, objective evaluation and creative thought.  

Photo by Allen Stewart

I recently attended the Everglades Coalition Conference at Hutchinson Island near Stuart (Martin County) on Florida’s East Coast. I typically attend this conference every year, for while I am now retired,  I still  try to maintain some awareness of the efforts to protect and “restore” natural Florida, particularly the “Everglades” which is part of what I call the Kissimmee-Okeechobee-Everglades Ecological Amalgamation (KOEEA)[1] as mentioned in my previous blogs.

During one of the lunch sessions, after listening to a speaker's review of the political machinations involved in trying to establish a large reservoir within the Everglades Agricultural Area (EAA), I asked the person sitting next to me why they thought eminent domain was not applied to secure the EAA, as it represents 27% of the original Everglades, and with proper 

planning, design and transitional implementation, it appears large enough to eventually  provide significant comparatively shallow, long-term water storage, which could emulate to a greater extent, the original floodplain. The EAA is in fact bigger than Lake Okeechobee itself.

Anyway, when I mentioned eminent domain you would have thought I had dropped a rattlesnake on this person’s dinner plate. Following a glance that was not quite a scowl, but certainly expressed the thought that I was not fully aware of the present political situation, which was partly true, I received a quick reply that eminent domain was not allowed, as so stated in the recent Senate Bill SB10.  This seemed strange to me, for I always thought of eminent domain, as implied within the Fifth Amendment, related to taking of private property for public use with just compensation. But apparently the State has authority to make such restriction on eminent domain. 

I am not a lawyer, so I had to assume someone had adequately researched the case law before including this prohibition in a Bill, even though to my way of thinking, disallowing eminent domain appeared to be contrary to Constitutional intent.

But beyond the legal question, and assuming this provision in SB10 is Constitutional, I still wondered why the State would surrender such a valuable tool? Certainly the taking of 700,000 acres of disturbed Everglades and reconfiguring it to reclaim ecological integrity while also protecting coastal communities from excessive diversionary discharges from Lake Okeechobee could be considered in the Public interest, and it seemed that perhaps in the long-term it could be of significant economic benefit?

At the break after lunch I went to my computer and looked up SB10. And yes! There it was. Section 3 of SB10 creating Section 373.4598 Florida Statutes (Water Storage Reservoirs) Subsection (4) Land Acquisition Page 10 of 32, lines 281-283:

“The use of eminent domain in the EAA for the purpose of implementing the EAA reservoir project is prohibited.”   

I decided not to spend time investigating how and why this prohibition was included, although I suspect it was a political rather than a scientific or even economic decision. However, upon reading the Bill again, I realized that the prohibition was limited to the EAA reservoir project, which is defined in SB10 “as Component G of CERP”. CERP is the acronym for Comprehensive Everglades Restoration Plan. If you look at the CERP of April 1999, you can find Component G described in Appendix 4 page A4-5 through A4-7. It requires 60,000 acres of land, and will provide through Phase 1 about 240,000 acre-ft of storage. Within SB10 is a provision to extend this to at least 360,000 acre-ft within a somewhat expanded footprint—perhaps something around 75,000 acres (+/-). All of this means that prohibition of eminent domain applies to just about 11% of the EAA. So in reality, eminent domain remains viable for the remaining 625,000  acres (+/-).

It is not that I necessarily support the use of eminent domain to secure the EAA, it is just that at this time, this option needs to be “on the table”. And the reason I say this is that a most difficult, but critical question must be answered if we intend to pursue a meaningful KOEEA reclamation.

Is the continuance of agriculture, particularly the cultivation and processing of sugar cane, within the EAA in the best long-term economic and social interests of the citizens of Florida and the United States of America and their future generations (Posterity), considering the extent of water quality degradation, air pollution from operational burning of the cane fields, and the purposeful disruption of vital historical flow regimes in order to protect EAA agriculture through management of water by diversion of flood waters and guaranteed supply of irrigation water?       

             

I do find it interesting that I could not find evidence that this question was seriously considered during the “Restudy of the Central and Southern Flood Control Project (C&SF)”[2] which resulted in the CERP of April 1999, and in its subsequent implementation. Apparently agriculture in the EAA was viewed as sacrosanct, and a required element of the CERP. And yet now it appears that protecting cultivation within the EAA may exacerbate issues related to diversions of high nutrient flood waters to economically critical coastal zones; impairment of the Biscayne Aquifer; salt water intrusion; flow disruption and deprivation to Florida Bay; hyper-salinity in Florida Bay causing grass beds die-off; ecological changes in the water conservation areas; human health problems associated with air pollution from cane burning; violation of water quality standards set by the Miccosukee Tribe of Indians;  blooms of cyanobacteria and red tide organisms causing ecological damage and threats to human health; the replacement of saw grass with cattails; and other more subtle ecological impacts. All of these perturbations come at an economic price. Is this price worth paying in order to maintain the status quo of the EAA? I do not think we have yet answered this question—and “we the people” and our posterity certainly deserve an answer.

The only way to develop a clear answer to this question is through an objective and thorough economic assessment that weighs the benefits presently offered by the EAA in terms of  jobs and contribution to the economy, against reduction of  property values; impact on the tourism industry; impact on recreational and commercial fisheries; impact upon the Biscayne Aquifer; ecological impact to the Everglades National Park; and increased health care costs, from cane burning, from biotoxins associated with Harmful Algae Blooms (HAB) and from excessive sugar consumption.   

An economic assessment of sugarcane cultivation and processing was included in a 2013 investigation conducted through the University of Florida’s Institute of Food and Agricultural Sciences (IFAS) entitled “Economic Contributions of Agriculture, Natural Resources, and Food Industries in Florida in 2013”[3]. Based upon total value-added[4], the sugar industry contributed $2.06 billion dollars in 2013, with an employment impact of 22,648 jobs. The industry ranked fifth among a group of seven commodities which included Environmental Horticulture with the highest impact of total value-added of $8.42 billion and an employment impact of 165,894 jobs. The sugar industry contributed 7.8% of the total value-added of these seven commodities, and 5.5% of the employment impact. In terms of contributions to Florida’s Gross Domestic Product (GDP) of about $801 billion (+/-) and employment impact of about 10.24 million jobs, the total value-added contribution of the sugarcane industry amounted to 0.26% of the GDP, and 0.21% of the employment impact.      

Another economic impact of the sugarcane industry is its reliance upon provisions within the Farm Bill—see PL 104-127 (Sec 156). These provisions include minimum unit price guarantees for processed cane sugar and a commitment for government based loans at this rate for the processed sugar in excess of that sold on the market. In addition, according to a review through the Heritage Foundation[5], a conservative think tank organization located in Washington DC, the gov­ernment imposes strict production controls to keep the market price well above the minimum so that the full costs of the program are passed on to American families. This price amounts to about $3.5 billion per year that some suggest is a subtle but effective subsidy, which is provided additional support through imposition of import quotas. Because the subsidy is paid by the consumer rather than through the Federal Budget, these costs do not appear as a line item cost to the taxpayer. This then is an indirect tax.

The counter argument is that this policy is intended to protect American business and American jobs. I do not wish to choose sides in this matter, except to say this is a real cost that would need to be included in any objective economic assessment related to the sugarcane industry within the EAA.

In making an assessment of the impact of the EAA upon other economic sectors, such as Real Estate, Tourism, Fisheries etc., it is reasonable to compare the present management scenario related to flow diversion and flow deprivation with a scenario in which the majority of the EAA is no longer used for conventional agricultural cultivation and processing and has been developed to provide both extensive water storage and nutrient (phosphorus) removal.

Regarding phosphorus removal, it needs to be recognized that the bulk of the phosphorus which has been diverted to the coast with the excess flows from Lake Okeechobee does not originate from the EAA, but rather from in-lake accumulations—legacy phosphorus[6] as it is now called-- and on-going phosphorus inputs associated with agriculture, septic tanks and urban/industrial activities north of the lake. (The whole issue of phosphorus management will be addressed in future blogs.) This phosphorus is one reason more releases are not directed south through Shark River Slough towards the Everglades National Park (ENP). However, the proposed economic review of the EAA is not suggested as a means of assigning “blame”, but rather as a reasonable, economically defendable analysis to determine the long-term cost effectiveness of using the EAA for more expansive treatment and storage when compared to its present use for conventional cultivation and processing. 

Cost-effectiveness is typically determined through some type of long-term value analysis—such as present worth. Projects which have high capital costs therefore can often be favored over lower capital cost projects if the operational and maintenance costs are comparatively lower; returns from products and services are higher, e.g. increased revenue from tourism or higher tax revenue from increased property values; and the term of investigation matches the durability and sustainability of the project, e.g. a 100 year life will more likely favor projects with higher capital costs but increased revenue returns than if the term were only 25 years.

The City of Sanibel, Lee County, Florida in response to concern over the economic and environmental impact of extensive discharges into the Caloosahatchee River from Lake Okeechobee released a comprehensive report in 2016[7] in which they noted that the Lee County $3 billion annual tourist trade was deleteriously impacted by these discharges. Similar impact was noted in St. Lucie and Martin Counties on the east coast. Continuation of these diversions would likely cause further deterioration of the region appeal to tourists.

Continued pollution of the Indian River Lagoon in Brevard County has resulted in serious  water quality degradation resulting in fish kills such as this one from the summer of 2016. The County has recommended spending $303 million to avoid $4.29 billion in economic losses over the next decade associated with tourism and recreation, property values and commercial fishing.   Photo by permission Florida Today

The tourist industry in Florida presently remains vigorous at about a $112 billion annual benefit to the economy, supporting about 1.1 million jobs. Growth was about 2.7% for 2016. Nonetheless with degradation of natural amenities such as reefs, beaches, estuaries, lakes, wetlands and recreational fisheries, some future adjustments would be expected, particularly in  the coastal communities of South and South-Central Florida which do depend upon the quality of  water associated with beaches and estuaries. For example, in Brevard County on Florida’s Space Coast, in an article by Florida Today [8] it was noted that the County Commission was informed in a report that unless they implemented a $302.9 million reclamation of the Indian River Lagoon, the region would experience losses of about $4.29 billion over the next decade from environmental degradation. These losses would be seen with tourism and recreation; property values; and commercial fishing. It is likely that similar losses would be noted in other Florida counties as water quality declines.

In addition to lost tourist dollars the Sanibel report included a reference to a study done by the Florida Association of Realtors[9] in which the extent of lost property value was quantified in relation to water clarity. They found that water clarity as measured by Secchi depth[10] resulted in an increased aggregate property value of $541 million in Lee County and $428 million in St. Lucie County with each foot of increased Secchi depth. It was estimated that St. Lucie County for example lost $488 million of property value from May 1, 2013 to September 1, 2013 because of reduced Secchi depths. A four foot loss in Secchi Depth as an average, which is in the realm of real possibility, would cost Lee County $2.17 billion dollars in property value, which is about 2.5% of the total property value in the county.

I suspect the first response to the suggestion that we consider public purchase of privately held lands in the EAA would be that we cannot afford it. Of course that would depend upon the determined value and who “we” happens to be (State or Federal Government), but I suspect the cost might be several billions of dollars. I do remember one of the first meetings related to the environmental problems in Lake Okeechobee and the Everglades. This was in the early 80’s and the meeting was in the old South Florida Water Management District’s building on Gun Club Road in West Palm.  Recognizing high phosphorus levels from the EAA as well as Lake Okeechobee were causing ecological changes in the Everglades, and that back-pumping from the EAA into Lake Okeechobee may be contributing to recent blue-green blooms in the lake, I raised my hand and asked why doesn’t the public just bite the bullet and purchase the EAA? I would say the response could best be described as shock and indignation. One person stood up, shook his head, and said “we cannot afford that, it would cost over a billion dollars.” I do not know if his number was accurate, but he certainly felt an investment of a billion dollars was extravagant—it is the equivalent of about $2.5 billion in today’s dollars. The feeling in that room was that we would never spend as much as a billion dollars in fixing this problem. I expect we would see a similar response today over a suggested expenditure for land purchase of several billions of dollars—but think how far ahead of the game we would be had we made that purchase in the 80’s. Think of the storage and treatment and habitat reclamation we would have been able to implement. Think how nice our beaches and estuaries would be. No grass die-offs in Florida Bay, no tea colored water at Ft. Myers beach, or pea-green water in the St. Lucie estuary. But we were not thinking of posterity back then.         

I am not suggesting we hurry to purchase the EAA, whether through eminent domain or honest negotiations with a willing seller. We certainly need to complete the economic analysis as described. And even if the analysis supports purchase, we would need to carefully develop a transition plan designed to first assess the environmental conditions of the EAA soils and other resources, and then devise an implementation plan that would not only ensure minimal economic and environmental impact upon the involved community, but would also allow and encourage innovative concepts to be put in place—concepts which would not only establish more suitable flow regulation, but might also create new jobs and establish sustainable practices associated with the  removal, recovery and marketing/sales of phosphorus and other resources[11]. The development and implementation of such innovations should include private sector involvement assisted by public incentives.

As I stated in the Introduction to this blog, I must fully support expediting the planned reservoirs within the EAA, and the expansion of treatment capabilities through additional STA systems. But in the long term, I believe we must also seriously contemplate the fate of the EAA, and the possibility of procurement as a means of providing and sustaining both environmental and economic stability--for ourselves and our posterity.

Comments as always are welcomed and encouraged.  

                                                                                                                                                                                                                       

[1] KOEEA is an acronym for the integrated ecosystem known as the Kissimmee Okeechobee Everglades Ecological Amalgamation [see November 30, 2017 blog (www.pasop.org) of The Kissimmee-Okeechobee-Everglades Ecological Amalgamation (KOEEA)—Understanding Its Beginning and its Dynamic.].

[2] In 1992 Congress authorized a Comprehensive Review Study (Restudy) of the C&SF Project to develop modifications to the Central and Southern Florida Project in an effort to restore the Everglades and Florida Bay ecosystems while providing for the other water-related needs of the region.

[3] Hodges, A.W., M. Rahmani and J.S. Thomas J. Stevens (2015) “Economic Contributions of Agriculture, Natural Resources, and Food Industries in Florida in 2013”. Report # FE969, University of Florida–IFAS, Food & Resource Economics Department , Gainesville, Fl

[4] Value-Added is a broad measure of income, representing the sum of employee compensation, proprietor income, other property income, indirect business taxes and capital consumption (depreciation). Value-added is a commonly used measure of the contribution of an industry to regional economy because it avoids double counting of intermediate sales.(From Hodges et.al. [3])

[5] Loyola, M. (2014) “Sugar shakedown: How politicians conspire with the sugar lobby to defraud America’s families.” In: Backgrounder No. 2929 Published by The Heritage Foundation, Washington DC.

[6] The concern of excess phosphorus accumulating in Lake Okeechobee and eventually being released as “legacy phosphorus” into the water column was expressed on a number of occasions in the seventies and eighties, particularly during the meetings of the Lake Okeechobee Technical Advisory  Committee (LOTAC). I wrote a letter in October 1987 in which this issue of legacy phosphorus was discussed—“LOTAC is placing great confidence in the presumption that biological availability of phosphorus within the lake will be reduced and that the sediment held stores cannot be biologically exploited—a presumption in which I personally have little confidence.”

[7] City of Sanibel, Florida (July, 2016) “Caloosahatchee Watershed Regional Water Management Issues”

[8] Berman, D (July 29, 2016) “Why a healthy lagoon is worth $6.3 billion to the local economy” Florida Today, Brevard County, Florida.   

[9] Florida Association of Realtors (2015) “The impact of Water Quality on Florida Home Values”

[10] Secchi depth is a measure of water clarity, determined by lowering an 8” diameter, black and white disc into the water until it is no longer visible. This depth is the Secchi depth—the higher the number, the clearer the water.

[11] I would remind you of the adage that pollution is nothing more than a misplaced resource.