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Controversial Federal Grazing Fees Not A Great Deal For Anyone


Members of the group occupying the Malheur National Wildlife Refuge headquarters stand guard Monday, Jan. 4, 2016, near Burns, Ore. The group calls itself Citizens for Constitutional Freedom and has sent a "demand for redress" to local, state and federal officials. The armed anti-government group took over the remote national wildlife refuge in Oregon as part of a decades-long fight over public lands in the West.

Members of the group occupying the Malheur National Wildlife Refuge headquarters stand guard Monday, Jan. 4, 2016, near Burns, Ore. The group calls itself Citizens for Constitutional Freedom and has sent a "demand for redress" to local, state and federal officials. The armed anti-government group took over the remote national wildlife refuge in Oregon as part of a decades-long fight over public lands in the West.

Rick Bowmer/AP

With the armed occupation of a wildlife refuge ongoing in Eastern Oregon, there’s been renewed attention on federal grazing policy — and attempts to understand where the root of these rural frustrations lie.

Quite a bit has been said about what a deep discount ranchers are getting to graze their livestock on public lands — and how the U.S. taxpayer is essentially subsidizing those who do.  But as often is the case, the truth isn’t so cut and dry.  

So why the talk about how cheap it is for ranchers to graze cow and sheep on federal lands?

Because at face value that’s exactly what it looks like.  Grazing fees are calculated in a weird unit called an Animal Unit Month – A-U-M – essentially how much it would cost to feed one cow and a calf for one month.  So on Bureau of Land Management and Forest Service land, that price is currently $1.69.  

Now if you compare that to the going rate for private land, which averages about $20 per animal per month, it looks like ranchers are getting a huge discount to use public lands.

Federal Grazing Fees Versus State and Private

This chart shows why environmental groups and many others often argue grazing fees for public land are too low. The fees haven't kept up with inflation, nor have they kept pace with private fees, particularly in recent years as private fees have risen more sharply. Federal grazing fees from the Bureau of Land Management and U.S. Forest Service are also significantly lower than other federal agencies and state agencies.

An AUM, or animal unit, is roughly the monthly cost of feeding one cow and her calf. Private rates are based on survey averages from 16 Western states. Years shown here are years for which data are available, not necessarily years when grazing fees began.
Source: Center for Biological Diversity, U.S. Department of Agriculture, Idaho Department of Lands, Oregon Department of State Lands.

 

But that’s not the case?

It isn’t. Because those two numbers include very different things.

“If you just look at the grazing fee itself, and you see the small amount on public land and then a 10-fold increase on private land grazing fees, it looks like — people call it a subsidy,” said John Tanaka, a rangeland economist at the University of Wyoming. “But when you consider all the costs involved in grazing, they’re roughly equal. Or in some cases, public land grazing can cost the rancher more.”

Joe Villagrana, a ranch manager from Lake County, in Southeast Oregon, says permits on public land carry their own costs.

“What people don’t realize is, by holding the permit, you are responsible for maintaining the fences, maintaining water, for example like water troughs,” Villagrana said. “And that costs money.  So you add up time, labor, fuel, material and all that, it actually gets to be very expensive.  So yeah, that sounds pretty cheap, but with everything that’s put on us to keep that permit, it costs us a lot of money.”

On private lands, a lot of this infrastructure is already included in that up-front price.  

And actually when the formula was designed to calculate federal grazing fees back in the 1960s, it tried to take in account all these additional out-of-pocket expenses. The goal was to keep the actual amount ranchers were paying the same, whether they were on federal or private land.

Cost of Ranching On Public Land Can Be Higher Than Private

This chart shows why ranchers argue for low grazing fees on public lands, even when those fees are a fraction of the rate they pay to lease private rangeland. Researchers at the University of Idaho found the operating costs associated with ranching on public land are often higher than for private land. What these numbers also don't take into account, the researchers say, is the meetings, legal fees and costs of permit renewals associated with public lands.

Source: Neil Rimbey and L. Allen Torrell, University of Idaho College of Agricultural Life and Sciences

Did they succeed?

In the broadest sense, yes. The University of Idaho’s Neil Rimbey, who has studied the costs associated with grazing on public and private land, says it has.

“I feel pretty confident that those costs are comparable, public and private,” Rimbey said.

The rates don’t match up perfectly – remember that often these are nationwide averages. And prices vary by pretty widely whether you’re in New Mexico, California or Idaho.  

So for example, if you’re in Nebraska, where the private grazing fee is around $45, ranchers potentially could do a lot better to graze on federal land. But in Oregon and Washington, where the private averages come in under $20, it’s likely closer to a wash.  
 
So ranchers aren’t so much getting a deep discount across the board, but some of them out there are getting a really good deal.

Federal Grazing Fees Don't Pay For Agency Costs

Federal grazing fees were never designed to make the government money. But the current rates are low enough that the federal agencies who manage rangelands -- the Bureau of Land Management and the Forest Service -- recover roughly only one sixth of the cost of administering the grazing permits. That means taxpayers cover the rest.



Still though, federal agencies are only getting a dollar and change per cow to graze.  Does that even cover their costs?

That’s where critiques of the system have some merit.  The BLM isn’t coming close to breaking even — some calculations put the shortfall at about $120 million per year. And it’s being made up by the U.S. taxpayers.  That works out to each man, woman and child in the United States paying 38-cents per year so that privately owned cows can graze on public lands.

And this reliance on the taxpayer means the BLM has to rely on Congress to get funds – and arguably there’s not enough for the grazing program to effectively monitors the range environmentally or make things run smoothly for the ranchers – thus there’s a lot of tension there.

Kristen Stade, with Public Employees for Environmental Responsibility, says increasing grazing fees could help.

“It’s certainly a situation where the BLM would fund itself by actually collecting what these lands are worth. They would be able to do a lot of the monitoring they’re required to do.”

A Small Percentage of Western Rangeland Has Been Evaluated

The Bureau of Land Management recently developed a new standard for evaluating rangeland health that will increase consistency in data collection, which it hopes will help in managing those rangelands. But only a small percentage of acres in the West so far have been evaluated. Rangeland ecologists say if the BLM had more money, it could do better monitoring. Some argue raising grazing fees could be a way to pay for that.  



Well, if ranchers are already paying close to the private rate, could they afford to pay more to graze livestock on public land?

Economists say the market could bear a higher grazing fee on public land.

“If they’re going to go out of business for raising the grazing fee by 80 cents, they probably don’t have any business being in the business in the first place,” said L. Allen Torell, a University of Idaho economist who, along with Rimbey, published a study on rangeland cost comparisons.

In Idaho, for example, lands can go out for potential competitive bids at prices as high as $8. And those bids take place for the right to lease that land for the next 10 or 20 years.
 
The state of Oregon is charging more than $15 this year. And you’d expect some of those similar out-of-pocket expenses to be required on state land as they are on federal land.

Probably the biggest challenge is changing the formula the feds use, or even throwing it out completely. Rimbey said bidding on permits, like they do in Idaho, would get closer to reflecting what the actual market value of the grazing is. But that would require a change to a law that has essentially been the same since 1966.

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