Environmental protection and economic development are both vital to Minnesotans, but they don’t have to be an either/or proposition, as Otter Tail County has shown.

By Nick Leonard, Otter Tail County

Finding balance between economic and environmental sustainability is crucial for rural Minnesota. The areas that can achieve that delicate balance will continue to grow—both in population and economic prosperity. Minnesota’s next governor will have significant influence over their ability to do so. With that in mind, this article highlights the importance of traditional industries such as agriculture and tourism in rural Minnesota. It proposes that rural Minnesotans can have their cake and eat it, too—economic development and environmental protection. Finally, and most importantly, this article stresses the importance of individualized approaches for rural challenges. From childcare to broadband and everything in between, there is no one-size-fits-all solutions for rural Minnesota. Using real examples from Otter Tail County, Minnesota, this chapter highlights how—when given the authority and resources—rural Minnesotans have the resourcefulness and expertise to address the challenges they face.

Agriculture and Tourism—Backbones of Rural Minnesota

Agriculture and tourism have traditionally been two of the predominant industries in rural Minnesota. From planting, harvesting and livestock production to food processing and distribution—Minnesota is a leader in agriculture and food. Similarly, few states can compete with the recreational opportunities afforded by Minnesota’s rich natural resources. As a result, for decades, farms and resorts have been the lifeblood for many rural Minnesota economies. However, these industries have more in common than being rural economic engines.

For starters, Minnesota’s rural infrastructure (i.e. roads, power, telephone, etc.) are the result of early farms and resorts. They were built so that people living in urban areas could have food and the luxuries of home during their summer vacations. Another commonality is their work ethic. Farmers and resort owners both work tirelessly and adapt to unpredictable conditions to “make hay while the sun shines.” Like agriculture, given the seasonal nature of the industry, rural tourism is heavily dependent on weather, and most businesses only have five months to generate enough revenue for twelve months of expenses.

Unfortunately, another trait that both Minnesota farms and resorts share is their disappearance. The number of operating farms and resorts in Minnesota has been shrinking for decades. The number of resorts in Minnesota has dropped by nearly half since 1985: from about 1,400 then to 760 in 2015, according to the most recent statistics from the Minnesota Department of Revenue, which tracks resorts for tax purposes. During that same period, Minnesota has lost over 22,000 farms—nearly a quarter of all farms, according to the latest USDA numbers.

Last, farmers and resort owners have a strong bond to the land and their community. Their identity is intertwined with their respective professions and having an intimate understanding of the land and water. Farmers and resort owners have a deep emotional connection to their land and/or body of water. It is part of their personal identity, often based on generational linkages, family traditions, and a history of social interactions and experiences with friends and family. Their connection is also functional. That is, farmers and resort owners depend on this land to earn a living. However, the family farm and resort are much more than businesses to their owners. It is also their home. It is the place where their children are raised and groomed to be the next generation of farmers and resort owners.

Environment vs. Economy—A False Choice

Based on the unique relationship that farmers and resort owners have with nature, it is ironic that these industries are frequently associated with environmental controversy. Despite best intentions, past practices have not always been environmentally sensitive. It is well documented on both theoretical and empirical grounds that, beyond a certain point, there is an unavoidable conflict between economic development and environmental protection. Throughout history, there have been trade-offs in rural Minnesota between the environment and food security, industrialization, infrastructure, recreational opportunities and many other aspects of development. Overcoming trade-offs between the social benefits of regulation and the economic benefits of development has never been an easy process. While few would dispute that both a growing economy and a safe and healthy environment are desirable, elected leaders are often confronted with choices between protecting their citizens and their environment through regulatory actions on the one hand and promoting economic growth and development on the other.

In recent years, Minnesota has become a national model for environmental protection. Minnesota’s air, land and water are cleaner now than they were 40 years ago. In Otter Tail County, home to 1,048 lakes—the most in any county in the United States—water quality is improving. These results were possible because of environmental regulation. Without the rule of law and rigorously enforced environmental regulation, there would seem to be too many personal and economic incentives for trading off long-term benefits for short-term gains. It is important to point out, however, that despite increased regulation, Minnesota has enjoyed significant population growth, industrialization and economic vitality over the past half century.

Is a trade-off between the social benefits of regulation and the economic benefits of development inevitable? Probably. Must rural Minnesota choose between economic growth and environmental preservation? Absolutely not. Let’s be clear. You can’t put the toothpaste back in the tube. Humans being part of nature has been deemed an acceptable “trade-off.” However, rural Minnesotans can continue to improve environmental conditions while simultaneously growing their economy. Elected leaders will be tempted to achieve this balance through legislation, but while reasonable rules and enforcement are certainly necessary, they are by no means sufficient.

For rural Minnesotans to find effective balance will require significant communication and collaboration between diverse stakeholders, a willingness to discard the traditional either/or thinking, and a desire to take greater ownership of their future. 

Big McDonald Resort

Lessons from the Field

Otter Tail County is one of Minnesota’s largest counties in size. It is comprised of 2,200 square miles of fields, wooded hills and crystal-clear lakes. Given its landscape, the county is significantly connected to agriculture and tourism. For decades, Otter Tail County has attempted to protect its robust natural resources while simultaneously encourage economic growth. They’ve experienced many successes and failures along the way. In either case, there have been a multitude of lessons learned. The following are a few Otter Tail County “lessons from the field” and suggestions for helping rural Minnesotans with this delicate balancing act.

Promote Sustainability—Economic and Environmental

Economic and environmental sustainability are closely linked. Producing goods and services requires, to a greater or lesser degree, the use of natural resources—and thus comes with an environmental cost attached. Such is the case for Minnesota’s resort industry. Historically, resorts were intentionally positioned near lakes and rivers to provide visitors access to the scenic and recreational opportunities they afford. As Otter Tail County’s resort industry reached its peak during the early to mid 1980s, private lake home owners became increasingly vocal about the “environmental” impact of commercial development. What followed was a series of increasingly restrictive county shoreland ordinances for commercial entities such as resorts. In fact, in 1989, after the DNR revised the statewide shoreland rules to clearly delineate between resorts and their residential equivalent (i.e. residential planned-unit developments), Otter Tail County policymakers opted to keep their ordinance more restrictive. At the time, while larger resort complexes were popping up across Minnesota, Otter Tail County prioritized environmental sustainability over economic.

Nearly a quarter of a century later, however, the county board of commissioners was asked to re-examine whether that delicate balance had shifted. Indeed, it had. The economic sustainability of the Minnesota family resort was now a serious concern. Of the 126 resorts that dotted the Otter Tail County landscape in 1985, fewer than 65 resorts remained. Furthermore, from an environmental perspective, the impact from resorts on Otter Tail County’s lakes and rivers was miniscule—comprising less than 2% of the overall lakeshore in Otter Tail County. Comparatively, agriculture comprised over 25% of all lakeshore, while over 66% of the county’s lakeshore consisted of private homes and cabins. In 2016, based on these data and a desire to promote both economic and environmental sustainability, Otter Tail County made updates to its shoreland ordinance. In doing so, the county provided the resort industry greater opportunity for growth and development while simultaneously managing environmental impacts. 

Talk, Don’t Point Fingers

Sometimes it is easier to see our own mistakes in other people than in the mirror. Fortunately, most rural Minnesotans are more worried about solving problems than pointing fingers. Follow their lead. If agreements can’t be made legislatively, give local units of government the administrative tools and resources they need to find solutions. That’s what community leaders did in Perham when they learned their community’s water supply was contaminated. In the 1990s, city workers discovered that the level of nitrates in city well water was so high, they needed to dilute it with water sourced from uncontaminated wells to meet public health standards. The likely culprit was nitrogen fertilizer used by local farmers. Instead of pointing fingers, a group of city officials, staff from the local conservation district, farmers, members of the agribusiness community, concerned citizens and the Minnesota Department of Agriculture held a series of meetings focused on both securing clean drinking water and ensuring a strong agricultural economy. The residents were understandably interested in keeping nitrogen out of their drinking water. However, what they quickly learned was that farmers were equally interested in keeping nitrogen out of the groundwater—not only to keep their own drinking water safe, but also due to the economics of fertilizer management. Together, the farmers and city officials developed several mutually agreeable and economically feasible solutions, including changing types of fertilizer, rotating crops, and putting land in CRP. In one case, the city bought farmland that was close to the public well and especially vulnerable to contamination and redeveloped it as a residential property. Now decades after their work began, Perham is seeing improved drinking water quality as the concentration of nitrates declines. What Perham’s story demonstrates is that environmental and economic interests can be balanced when both sides are willing to look for common ground.

Make Participation and Compliance Easy

Woody Guthrie said, “Any fool can make something complicated. It takes a genius to make it simple.” Government has a long history of making programs and regulation compliance overly complex. The larger the governmental unit, the more complex. To some extent, it has become the status quo—consumers have begun to expect complex programs that require expert assistance to navigate and therefore confer disproportionate benefits on those who can afford the assistance of lawyers, accountants, and lobbyists. Complexity also suppresses overall compliance.

Over the past decade, the short-term rental of private vacation homes has grown dramatically. Spurred by the ease of Internet marketing, the need of owners to cover increasing expenses, and overall consumer interest, Minnesota’s second-home owners have become active operators in the vacation home rental market. From an economic standpoint, the rentals offer new lodging opportunities and boost tourism revenue. However, when unmanaged and unregulated, private rentals can also create concerns—noise, traffic, health and safety risks, capacity issues, zoning compliance, and environmental concerns. To maximize the economic opportunity while mitigating the aforementioned health and environmental risks, Otter Tail County set about creating a program to license private vacation rentals—through delegated authority from the state –that made compliance easy and cost effective.

The county developed a program that was client-centered and focused on removing barriers to licensing. County staff developed a customized plan review for private vacation rentals to target the highest risk health and environmental concerns such as safe drinking water and septic system compliance. After the initial plan review, county staff inspect the properties biennially. The average annual cost for licensing is around $200—which is generally less than a one-night stay at the property. While Otter Tail County’s environmental health program is still quite new, early data look quite promising with over 50 properties already voluntarily signed up for the program. The lesson learned from Otter Tail County? Maybe it doesn’t take a genius to make things simple!

Give Local Government the Authority and Resources

Well before it was legislatively mandated, Otter Tail County was working on buffer strips—the vegetated land adjacent to streams, rivers, lakes, ditches, and wetlands designed to help filter runoff that can affect water quality. Getting complete buy-in was a daunting task in a county with 4,618 miles of shoreline—nearly the length of the California and Oregon ocean shorelines combined. How was Otter Tail County successful? It certainly wasn’t through a one-size-fits-all, heavy-handed crackdown. Rather, after receiving a $290,000 grant from the state Clean Water Land and Legacy Program, the Otter Tail County Soil and Water Conservation Districts took a flexible, individualized approach to gain compliance. The county set up specific guidelines for identifying areas that needed buffers. After an area that potentially needed buffers was identified, technicians met with landowners, measured the area and provided information on all options available to landowners, including government programs that pay landowners to install the buffer strips. Through high-resolution photography, Otter Tail County identified over 1,100 parcels as potentially out of compliance. To date, despite having more lakes than any other county in the nation, Otter Tail County has achieved 99% compliance countywide. Buffers are a sensitive subject and as such, the conservation districts have gone to great lengths to ensure the process is fair and equitable. The low-key, individualized approach and sense of fair play by local officials has been critical in getting voluntary compliance.

So economic development and environmental sustainability don’t have to be mutually exclusive. When both sides take a thoughtful, knowledgeable approach, getting to know the other party’s needs and concerns, and are willing to work on flexible solutions, both small businesses and the environment can succeed side by side, a balance that is crucial for the future health of Greater Minnesota.

Nick Leonard, Ph.D., is the Communications and External Relations Director for Otter Tail County, responsible for countywide economic development, legislative affairs, public relations and external partnerships. Previously, Nick was a researcher and professor at the University of Minnesota, Morris, and the co-owner and Vice President of an area resort and property management company.

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