Public Lands Ranching Is A Taxpayer Subsidized Legal Racket

Brushiest Grazing Allotment, Tonto National Forest, 1992
(Jeff Burgess)

Nevada rancher Cliven Bundy’s refusal to recognize federal law in 2014 brought needed attention to the government’s program of permitting livestock grazing on public lands. Bundy claimed the Bureau of Land Management (BLM) violated his freedom by not allowing him to graze his cattle for free on the federal land adjacent to his ranch. But a closer examination of the government’s grazing program reveals that the U.S. taxpayers are the ones who are really being abused.

The regulation of livestock grazing through the creation of separate grazing allotments on Western public lands is the result of the Taylor Grazing Act of 1934. Grazing on public lands is primarily administered by two federal agencies. The U.S. Department of Agriculture’s (USDA’s) Forest Service oversees it on National Forest land, while the U.S. Department of the Interior’s Bureau of Land Management (BLM) manages it on BLM land.

In order to legally use a federal grazing allotment, a rancher must first obtain the permit for that allotment. It’s often claimed that ranchers can buy a grazing permit. But that’s not true. The federal courts have repeatedly found that grazing permits aren’t private property or a lease, but a privilege to be managed by the local federal land manager in the interests of the general public.

permitted livestock Tonto National Forest
Tonto National Forest

What ranchers are really getting when they buy a private ranch base property that’s associated with a public lands grazing allotment is the opportunity to be the first in line to obtain the grazing permit for that allotment. The likelihood that the grazing permit will be reissued to the ranch’s new owner is so high that it inflates the market value of the base property. The difference in the property’s value with and without the grazing permit is considered the market value of the permit. This value is primarily a function of the maximum number of livestock that are listed on the permit. Most allotments aren’t capable of supporting the maximum number of permitted animals, so the actual (authorized) numbers that are grazed are often much lower than the permitted numbers, frequently less than half. This common discrepancy between permitted and actual livestock numbers is the result of ranchers fighting to keep their permitted numbers as high as possible in order to inflate the market values of their private base properties.

Once a rancher obtains a grazing permit, they only have to pay a ridiculously low grazing fee per animal per month to graze their livestock on their allotment. (This amount is adjusted slightly every year. It was set at only $1.35 per month for 2019.) They only have to pay for the animals that are actually using the land, not the permitted number of animals. And the agencies usually take their word on the number they claim to have actually grazed.

The below-market grazing fee doesn’t come close to generating enough revenue to appropriately manage livestock grazing on federal lands. Arizona’s Prescott National Forest, for example, encompasses about 1.25 million acres, and the vast majority of it is permitted for livestock grazing. According to Forest Service officials, the Prescott only collects about $110,000 in grazing fees per year, and only half of that money, or about $55,000, is returned to the forest’s range betterment fund to help manage livestock grazing across the entire forest. But with the cost of a new livestock-watering site running at about $15,000, and new livestock fencing going for at least $1,000 per mile, it’s easy to see that the forest can’t afford to get a lot done.

Taxpayers Are Subsidizing Public Lands Ranching

The agencies try to split the cost of these range “improvements” with the ranchers. But few ranchers have the ability to spend a lot because many public lands ranches are only marginally profitable because of the unsuitability of most public land for grazing. The cost of implementing livestock management plans wasn’t as big of a problem in the bad old days, when public land ranchers were able to do pretty much whatever they wanted and get away with it. But the passage of the National Environmental Policy Act (NEPA), the Endangered Species Act and the Federal Land Policy and Management Act (FLPMA) in the 1970s created opportunities for conservationists to use the courts to force public land managers to start managing livestock grazing in the public’s interest. The application of these environmental laws has resulted in significant improvements in the ecological health of the land. Still, it wasn’t until the late 1990s that compliance with these laws began to become the norm on public rangelands.

This overdue application of improved grazing allotment management plans created complaints from many ranchers because they were so expensive to implement. And when ranchers didn’t have the money to pay for their portion of the costs, the agencies often required them to reduce the size of their herds. This simple strategy of reducing livestock numbers usually produced improvements in the health of the land that exceeded the results obtained from the implementation of intensive livestock management schemes. And it cost a lot less too. But ranchers complained and so Congress bailed them out. The 2002 Farm Bill allowed the USDA’s Natural Resources and Conservation Service’s (NRCS) Environmental Quality Incentives Program (EQIP) to award financial assistance to public land ranchers for “conservation” measures. (They were historically ineligible for EQIP money.)

Public lands ranchers are now allowed to use EQIP grants to help fund their portions of the costs of implementing improved livestock management plans. Tens of millions of dollars in EQIP grants have been given out to public land ranchers across the West. Most of the money has been spent to build waters and fences to maintain or increase livestock numbers, despite the fact that the words “environmental quality” are in the program’s title. One of the most popular uses of EQIP grants has been to build new livestock watering sites in little-used upland areas and claim they’re protecting riparian areas because they’re drawing cattle away from streams. There’s no evidence, however, that these upland waters draw enough cattle away from the streams to adequately protect them. Also, these new waters often bring livestock to dry upland areas that were rarely grazed before, sometimes creating new problems.

The low grazing fee and EQIP assistance aren’t the only subsidies provided to public land ranchers. In fact, there are too many of them to list here, and maybe there are too many of them for anybody to ever know them all. But some of the more egregious ones include the millions the USDA’s Animal Services spends killing predators and “pest” animals for ranchers. And the Environmental Protection Agency funds grants to reduce nonpoint source water pollution that ranchers can use to temporarily convert woody ecosystems to grasslands which provide more forage for cattle. The BLM has spent millions through its Healthy Lands Initiative for similar projects. These vegetative manipulations are justified by calling them watershed improvement projects. There’s also the USDA’s Livestock Forage Disaster Program that doles out feed assistance payments to ranchers during drought – even when they are grazing their livestock in a desert. Ranchers can also receive drought compensation payments by buying highly subsidized crop insurance policies from the USDA’s Noninsured Crop Disaster Assistance Program (NAP). And the 2018 Farm Bill created the USDA’s Livestock Indemnity Program (LIP), which provides payments to ranchers for livestock deaths caused by predators (endangered wolves) reintroduced into the wild by the federal government, along with several other mortality causes.

The myriad of federal agricultural subsidies obviously creates opportunities for abuse. In response to a drought in Arizona, for example, NRCS State Conservationist Michael Somerville disbursed more than $11 million in 1999 to over 300 Arizona ranchers from the Emergency Watershed Protection (EWP) Program. The USDA’s Auditor General responded to a whistleblower complaint and conducted an audit which found the complaint was correct and the NRCS state office’s documentation was not “adequate to support the implementation of the EWP.” The ranchers, however, got to keep the money. (Recipients of Federal social welfare programs are required to payback all overpayments they receive – even when they are caused by agency errors.)

The federal government, of course, isn’t the only source of ranching subsidies. Western states also provide an array of subsidies to support public land ranchers. The most widespread ones are the open range laws wherein ranchers aren’t required to fence their cattle in, while everybody else, including local highway departments, must fence them out.

As you can easily see, it’s difficult to understand how any sane person could describe the federal government’s public lands grazing program as being unfair towards ranchers. Unless, of course, you believe that public land ranchers should be exempt from environmental laws and are entitled to generous subsidies. The sweetheart deal these ranchers are getting from the taxpayers is even more inexplicable if you consider the relative insignificance of the economic impact of public lands grazing. The Department of the Interior’s FY2012 Economic Report, for example, showed that grazing on all Western public lands accounted for only about 1.6% of livestock receipts in the 17 Western states. It would make a lot more sense for Congress to create a fund to compensate public land ranchers to voluntarily relinquish their grazing permits if they don’t want to pay to implement better livestock management. These grazing allotments could then be permanently retired and the taxpayers wouldn’t have to keep throwing good money after bad.

Updates

On January 30, 2020, U.S. Rep. Adam Smith, D-WA, introduce HR 5737, the Voluntary Grazing Permit Retirement Act.

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