National Potato Giant Uses Obscure Leasing Scheme To Skirt Environmental Oversight in Minnesota

One of the nation’s largest industrial agriculture operations is hiding behind a small family farm to try to avoid environmental oversight of a plan to clear-cut pristine Minnesota forestland for a huge expansion of its potato-growing acreage, EWG charged in formal comments to the state’s Department of Natural Resources.

R.D. Offutt Farms, headquartered in Fargo, N.D., is the nation’s largest potato grower, with 190,000 acres spread over several states, including North and South Dakota, Minnesota, Missouri, Texas and Wisconsin. It is tied for first place as the largest farm in the U.S., according to The Land Report’s 2019 ranking. Its annual profits are estimated at $2.5 billion.

R.D. Offutt Farms is just one of 126 divisions of the R.D. Offutt Company, or RDO, also of Fargo. RDO includes 11 potato-processing facilities in four states and the RDO Equipment Company, with more than 75 stores in nine states and partnerships in Africa, Australia, Mexico, Russia and Ukraine.

In Minnesota, Offutt Farms operates in the north-central region known as the Pineland Sands, above an aquifer that is extremely vulnerable to pollution because of its shallow depth and the area’s porous soils. For nearly 30 years, Offutt has expanded its potato-growing empire in Minnesota, clearing thousands of acres of forest in the Pineland Sands area for irrigated potato fields.

In its most recent expansion phase, in 2015, Offutt bought almost 8,000 acres of forestland in the Pineland Sands. Soon thereafter, the company applied to the Department of Natural Resources, or DNR, for 54 irrigation well permits and assessments, making clear it intended to immediately clear-cut its recently purchased forestland to grow even more irrigated potatoes.

Concerned about potential pollution of the drinking water aquifer by nitrogen fertilizer, DNR ordered Offutt Farms to complete an initial environmental review of its application package. But, as it had repeatedly done with earlier projects, Offutt avoided environmental review by temporarily whittling down the size of its project, ostensibly reducing its potential environmental impact and, with it, the need for environmental review.

In 2017, Offutt sold about 600 acres of its new holdings to Tim Nolte, an area farmer. As part of the sale, Nolte agreed to lease back acres to Offutt Farms for potato production. He also agreed to apply for three water appropriation permits (totaling 100 million gallons per year) to irrigate 303 acres. The permits that Nolte has now applied for cover three of the exact same wells from Offutt’s original 2015 application package, which DNR had refused to approve without environmental review.

In detailed comments submitted May 6 on the state’s recent preliminary environmental assessment of the Nolte project, EWG argued that the proposed project is really part of Offutt’s effort to expand its potato empire while avoiding responsibility for assessing and addressing its environmental harms. EWG based its argument on more than 700 pages of documents, obtained from DNR through an open records request.

In the comments, Jamie Konopacky, EWG’s Midwest director, wrote:

… [T]he proposed project cannot fairly be characterized as an isolated action to irrigate 303 acres of previously forested land.… Rather, it is undeniably part of RD Offutt Company’s massive phased action to convert an additional 7,000 acres of pristine forest to irrigated potato farmland in the vulnerable Pineland Sands Aquifer area. Given this fact, the proposed project has an exponentially greater potential for significant and irreversible harm than that currently presented and evaluated in the [preliminary environmental assessment].

[Read EWG’s full comments here, and attachments to the comments here and here.]

EWG’s comments call out the major threats that Offutt’s massive fertilizer- and chemical-intensive irrigated farming operation pose to drinking water, streams and communities. The comments also discuss the lack of accountability for cumulative and, in many cases, irreversible harms that have accrued over 30 years of Offutt Farms’ irrigated potato operation in the Pineland Sands – harms that will continue to intensify and expand without completion of a thorough and legally required environmental review.

For decades, Offutt has made no secret of its tactics for avoiding regulatory oversight. As early as 1997, RDO avoided regulatory oversight by not incorporating its farm division, spreading out its farmed acreage across states, and leasing or swapping nearly half of its farmland. In 2019, in response to criticism of the Nolte project, a company spokesman told the Fargo news outlet InForum that “trading fields with neighboring farms is a common practice we’ve been doing for over 40 years.”

Mike Tauber, head of Minnesota’s Northern Water Alliance, laid out exactly how Offutt uses the reputation and size of a small farmer like Nolte as part of a coordinated strategy. He told InForum: “They are continuing to expand new acres every year. Their umbrella gets bigger. The little guys are labelled in the permits so on paper Offutt has no footprint in newer projects. They send the little guy to do the work.”

Drinking water from community and household wells near irrigated potato fields is already contaminated with nitrate pollution exceeding state and federal safe drinking water limits. Rural communities have been forced to spend millions of dollars to remove toxic nitrates – a breakdown product of the nitrogen in fertilizer – from their drinking water. And millions more in drinking water treatment costs could be on the horizon if Offutt is permitted to keep using small-farmer strawmen to expand its footprint while evading environmental review.

In February, the Minnesota Department of Agriculture released the results of tests monitoring the groundwater on an Offutt Farms site. The extremely high nitrate levels confirm that best management practices on Offutt’s irrigated acreage cannot prevent unsafe levels of nitrate from leaking into the shallow drinking water aquifer of the Pineland Sands. 

In an expert report supporting EWG’s comments on the proposed Nolte project, George Kraft, Ph.D. – a hydrologist specializing in assessing groundwater pollution from irrigated farming in porous soils – makes clear that groundwater nitrate contamination at levels double to quadruple the legal limit will likely occur at the proposed Nolte project site.

State Rep. Peter Fischer, who chairs the water committee of the Minnesota House of Representatives, is sympathetic to Nolte’s position that his irrigation applications are not connected to Offutt’s expansion plans. But he told the Star-Tribune of Minneapolis that the state can’t simply ignore the cumulative harm fertilizers and irrigation wells may cause to the Pineland Sands: “We need to make sure we’re protecting water sustainability.”

The evidence is clear that Offutt has amassed hundreds of permits and thousands of additional farm acres and is continuing to expand its operations. Operations of this magnitude are required by law to undergo environmental review to assess the full potential for environmental harms and assess alternatives or methods to minimize impacts to natural resources.

Another expansion of Offutt’s industrial potato empire in the vulnerable Pineland Sands Aquifer without legally required environmental oversight could significantly and irreversibly contaminate surface water, groundwater and drinking water with nitrates, pesticides, fungicides and insecticides. After 30 years of operation, it is past time for Offutt Farms to accept responsibility for completing a full environmental review of its operation and future expansion plans in the Pineland Sands. The full cost of environmental review will likely be far less than the water protection and treatment costs the company has already unjustifiably passed on to citizens, communities and the state of Minnesota.

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