Ending Public Lands Grazing Fair and Square
Suggested Citation: Kerr, Andy. 2000. Oregon Desert Guide: 70 Hikes. Seattle: The Mountaineers Books. pp. 88-90.
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Grazing on the public lands is not stable. Few, if any, bright spots are in the future of federal public land grazing permittees. Beef is losing market share to chicken, pork, seafood, tofu, cheese, and vegetables. Concerns about human health and food safety (heart disease, obesity, E. coli, mad cow disease, and so forth) are affecting the beef industry. Subsidies to farm and ranching industries are being phased out on private lands, which does not bode well for subsidies on public lands. Foreign competition is cutting into domestic beef sales. Domestic factory farming is changing the face of the cattle industry. The average age of the permittees is sixty years and rising.
Conservationists are increasing their attention on livestock grazing. Conflicts with recreationists are increasing. Enforcement of water quality standards is increasingly likely. More endangered species listings are inevitable. More litigation is probable. New planning and management processes by federal land management agencies will possibly reduce livestock grazing numbers and certainly place more restrictions on grazing. The latter scheme requires increased federal spending, which is increasingly problematic to secure. The fee on grazing is likely to rise. Bidding by conservationists on state grazing leases will increase pressure to reform the federal grazing fee.
The system for grazing on Forest Service and Bureau of Land Management lands in the West was established in 1934. Qualifying ranches ("base properties") were assigned an exclusive amount of AUMs (animal unit months: forage for a cow and calf for one month), theoretically based on the land's carrying capacity.
Public land livestock grazing is a privilege, not a right. If the government chooses to discontinue a "giving," that does not constitute a constitutional "taking." However, the real estate market—due to the certainty that the federal government will transfer grazing permits to the new base property owner—recognizes the value of a federal grazing permit so attached. So does the IRS. The result is that base properties have increased in market value to reflect the federal AUMs that are automatically transferred to new purchasers. In the rare instance when the government does reduce grazing, it is a loss of real money to the permittee. It is not only a loss of future subsidized grazing, it is also a reduction in the fair market value of the base property.
It is understandable that ranchers—not to mention the banks that hold the mortgages on the base properties—fight so hard to keep their AUMs up.
Public land grazing contributes only 2 percent of the feed to the nation's cattle industry, and only then with a large subsidy from the federal taxpayers. The 756,000 AUMs on federal lands (including forests) on the "east side" (Oregon and Washington east of the Cascade crest) provide a total of 243 livestock owner, operator, and ranch hand jobs, according to current government data.
Grazing permits have a capital value. According to Professor Robert Nelson, formerly with the U.S. Department of the Interior's Office of Policy Analysis for eighteen years, the West-wide capital value of a public land grazing AUM averages $75. (Notwithstanding reality, the air force recently compensated an Idaho BLM permittee $260 per AUM, in conjunction with an expanded bombing range, wanting—one can only assume—to remain competitive with $200 hammers and $400 toilet seats.)
The public land range fee for 1999 was calculated by an arcane and irrelevant statutory formula at $1.35 per AUM.
Even though the BLM admits spending more on grazing than it takes in, the agency considers only a small proportion of the costs. According to Nelson, the taxpayer expense in excess of revenue is conservatively $20 per AUM. While this includes direct and overhead costs, it does not include other subsidies, such as that for animal damage control.
In contrast, the gross income the federal treasury receives from an AUM is less than $1.35. From 50 to 62.5 percent (depending on the legal classification of the rangeland) of the $1.35 is dedicated to the Range Betterment [sic] Fund (the moneys are used for fences and water developments), and does not offset the federal taxpayer expenditure.
It would be easier—and more just—for the federal government to fairly compensate the permit holders as it reduces cattle numbers permanently. Since the government spends substantially more than it receives for grazing, buying and retiring AUMs has a fiscal payback of 3.75 years.
After recoupment, the continued savings could be used for national debt reduction and other beneficial activities such as stream restoration, erosion control, weed eradication, and so forth.
It would be less expensive—fiscally and politically—for the agency simply to buy out grazing permits and save extensive planning, monitoring, research, public involvement, appeal, litigation, and political costs. Given the vagaries of the cattle business, operators would benefit from compensation for retiring their permits. This is not possible under existing law, which mandates "use it or lose it."
How will public land ranchers feel about this? There is no reliable way to estimate. Factors include the financial viability of ranching operations, permittee age, and other personal situations of permittees, the existing and anticipated level of conflict regarding grazing on an allotment, the price of beef, and so on.
Several examples of retirement buy-out are encouraging. Anecdotal surveys suggest that about half of the ranchers who have taken advantage of buy-out offers have moved on to other things, and about half have purchased livestock operations not dependent on public land. The latter stayed in ranching but wanted to be the masters of their own domains.
What would be the benefits of such an option?
Species and ecosystems would recover at maximum rates and in the most cost-effective manner.
As permits are retired, taxpayer costs of subsidizing the forage are reduced proportionally.
Federal land management agencies could more easily meet the environmental protection standards if livestock grazing were reduced, resulting in better stewardship.
Controversy could be avoided or greatly diminished. There would be less litigation, less need for funds to be spent mitigating livestock grazing damage, and less call to overturn the environmental protection statutes.
While not vesting a legal right to graze (something permittees have never had), such a change in law would provide more options to livestock permittees. A permittee could choose to sell a federal permit but still live on and/or raise livestock on the base property.
The option to exercise the voluntary retirement option rests solely with the permittees. If they didn't want to retire, they would be free to continue to take their chances in a dynamic economic, regulatory, budgetary, and political environment.
The Oregon Desert Conservation Act would phase out livestock grazing permits in national monuments, national wildlife refuges, and national conservation areas ten years after the expiration of a current ten-year permit. Of course, permittees could choose to be bought out earlier.
While the retirement option is a radical departure from the traditional debates on public land livestock grazing, it is equally rational. It addresses directly the market value of federal grazing permits, which is the major subtext in the debate over public land livestock grazing.
Politically, the fairness and rationality of the proposed policy change can appeal to conservationists, taxpayers, politicians, permittees, fiscal conservatives, compassionate liberals, and others. Since it is a solution outside the box we are all in, it will require leadership in all camps and a willingness to try something different.
[Adapted from Andy Kerr. "The Voluntary Retirement Option for Federal Public Land Grazing Permittees." Published simultaneously in Rangelands 20, no. 5 (October 1998) and Wild Earth 8, no. 3 (fall 1998).]