Livestock Forage Disaster Program A Disaster For Taxpayers

Ranchers in the desert Southwest are receiving subsidies from the U.S. Department of Agriculture (USDA) to purchase livestock feed which helps them maintain livestock numbers on public lands that are suffering from persistent and recurrent drought.

The money is being disbursed by the agency’s Livestock Forage Disaster Program (LFP), which is administered by the Department’s Farm Service Agency (FSA). Congress created the LFP in the 2008 Farm Bill, and the FSA published the program’s rules in the Federal Register on September 11, 2009. The LFP was initially authorized for 2008 through 2011, but it was made permanent in the 2014 Farm Bill, which also authorized retroactive LFP payments back to 2011. The LFP is the permanent feed assistance program that replaced the FSA’s previous ad hoc drought programs, such as the Emergency Feed Program, and the more recent Livestock Compensation Program (LCP), which was part of a 2002 decision by Republican President George W. Bush to dramatically increase federal agricultural subsidies.

LFP payments are disbursed in counties that are experiencing severe, extreme, or exceptional drought, according to the U.S. Drought Monitor. The amount of feed assistance money ranchers receive is based upon the number of cattle they graze. The maximum number of cattle permitted on most public lands grazing allotments, however, is usually significantly higher than the actual numbers being grazed. The real numbers are typically set by the annual authorizations issued by local Forest Service and Bureau Land Management (BLM) public land managers – not the maximum permitted numbers listed on grazing permits.

According to the FSA’s Arizona state office, LFP assistance is based upon real livestock numbers, not the “paper numbers” on public lands grazing permits. This claim, however, is questionable, because decisions to dispense LFP assistance payments are made at the FSA’s county offices. For example, a 2018 LFP application form posted to the Gila County Cattle Growers Association website suggested that the only information ranchers needed to provide to the local Navajo/Gila County FSA office about their cattle numbers were the numbers listed on their grazing permits.   

Ranchers may also receive LFP payments when a Federal land management agency prohibits them from grazing public land after a wildfire. It’s difficult to understand how this provision works when a ranch is made up almost entirely of public land, with just a small, private base property serving as the ranch’s headquarters. If a public land manager requires all or most of the rancher’s cattle to be removed after a wildfire to allow the land to recover, most base properties aren’t large enough to hold the cattle that would supposedly be fed with the help of the LFP payments.

If ranchers are actually using LFP payments to provide supplemental feed to their cattle during droughts, it means that livestock numbers are being maintained on drought-stricken land – when herds should be reduced or removed to protect natural resources. This is especially true for public lands, where the maintenance of livestock numbers during droughts means that cattle are monopolizing scarce public resources at the expense of wildlife, and watershed health. This violates the multiple use mandate, which requires that public lands be managed in the public interest.

The laws which created and reauthorized the LFP program state that only those ranchers with grazing leases are eligible – there’s no mention of grazing permits. But only a few public lands ranchers using BLM lands have leases, while nearly all of them have grazing permits. The U.S. Supreme Court has repeatedly found that a federal grazing permit isn’t a lease, nor a property right, but a privilege that’s conditioned upon the livestock being managed in the public interest. Despite this, county FSA offices are issuing LFP payments to ranchers that have public lands grazing permits.

2014 LFP Audit

In December 2014 the USDA’s Officer of Inspector General issued Audit Report 03702-0001-32, which was initiated to review the FSA’s administration of the LFP. They found that about 7% of the LFP payments they audited had been improperly issued by the FSA, and that the agency had used questionable monthly feed costs to calculate LFP payments. An error rate of 7% may not sound too bad, but according the USDA, the FSA issued about $423 million in LFP assistance for FY2018, and 7% of that is about $30 million.

The Inspector General’s report also pointed out that ranchers could receive duplicate compensation for drought losses through the USDA’s Noninsured Crop Disaster Assistance Program (NAP). The NAP provides highly subsidized crop insurance policies to agricultural producers. When precipitation or “vegetation greenness” falls below the coverage level selected in the policy purchased by a rancher, drought compensation payments are issued by the county FSA office.

The audit failed, however, to address the absurdity of providing drought relief payments to ranchers that graze desert lands. It’s been said, for example, that most of Arizona is in a permanent drought that’s infrequently interrupted by rain storms. In fact, the entire Southwest has been suffering from a nearly uninterrupted drought for about the last 20 years, and the last five years have been the hottest five years in history. And because of climate change, the trend will continue. Furthermore, the Drought Monitor used to trigger LFP eligibility uses all available historical weather data, which discounts the effects of recent climate change, and could result in a new normal being classified as drought. Giving drought assistance to ranchers grazing desert lands is like giving money to farmers trying to grow bananas in Michigan after there’s been a killing frost.

Many public lands grazing allotments in Arizona, and across the Southwest, are hot desert, which is inherently unsuited for cattle grazing. Arizona’s Tonto National Forest, for example, includes about 791,284 acres of Sonoran Desert, and much of it, unfortunately, is permitted for cattle grazing. The following list provides just a few examples of grazing allotments in Arizona where LFP payments have subsidized grazing in the Sonoran Desert during drought:

  • A-Diamond Grazing Allotment, Arizona BLM Gila District
    The allotment is part of the A-Diamond Ranch, located on the south bank of the middle Gila River in Pinal County. The ranch includes the BLM’s A-Diamond Grazing Allotment, the adjacent Arizona state grazing lease #05-003391, and the ranch’s base property along the river. According to the BLM, it encompasses about 20,779 acres, which includes the 6,566-acre BLM allotment. The entire allotment is hot Sonoran Desert. Per the FSA, the ranch’s owner, the G&H Land & Cattle Co., received LFP payments totaling $219,897.00 from 2011 through 2018.
  • Battle Axe Grazing Allotment, BLM Arizona BLM Gila
    District

    The allotment is part of the Battle Axe Ranch, located on the north bank of the middle Gila River in Pinal County. The ranch includes the BLM’s Battle Axe Grazing Allotment, the adjacent state grazing lease #05-102690, and the ranch’s base property. According to the BLM, it encompasses about 19,578 acres, which includes the 15,155-acre BLM allotment. The entire ranch is Sonoran Desert. Per the FSA, the ranch’s owner, Wade C. Lueck, received LFP payments totaling $103,992.79 from 2009 through 2018.
  • Campaign Grazing Allotment, Tonto National Forest, Arizona
    The allotment is located in the Tonto Basin in Gila County, and according to the Forest Service, about 43% of the allotment’s 34,959 acres are Sonoran Desert, and about 18% are semi-desert grasslands – where the desert transitions to higher and cooler elevations. Per the FSA, the allotment’s grazing permittee, the J Bar B Cattle Co., received LFP payments totaling $198,402.00 from 2011 through 2014.

Conclusions

The Livestock Forage Disaster Program is a disaster for U.S. taxpayers because the feed assistance it provides is encouraging the continued grazing of arid public lands during droughts. Ranchers that graze their livestock on desert lands should be disqualified from receiving drought compensation payments, and the legality of dispensing any LFP payments to public lands ranchers should be examined. Furthermore, federal drought compensation programs should be redesigned to emphasize the removal of livestock from the land during droughts. In the meantime, ranchers that receive drought compensation payments from the Noninsured Crop Disaster Assistance Program should not be allowed to simultaneously collect LFP payments.

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