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Farm “subsidies” are undeniably essential in the fundamental economic
value of the cost of food, which in the United States is the lowest
of all industrialized nations.
One argument over public grazing is that artificially low grazing
fees amount to a net loss for the government and benefit only
a small number of permit holders, some of whom represent wealthy
corporations in their own right.
Combined losses of the BLM and Forest Service on revenues versus
costs of public grazing were reported from 1994 to 1996 to have
been $66 million. In the same period, the government reported
losses of $355 million on recreation and $290 million on timber.
One reason may be found in the fact that the federal agencies
are overweight in administration, requiring 78 employees per million
AUMs, compared to 20 employees per million AUMs on state grazing
land.
Interior Secretary Bruce Babbitt has led environmental arguments
that grazing permits benefit fewer than 27,000 ranchers and less
than 5 percent of national beef production. This may be more true
as a result of continued federal pressure on small operators,
but even so, 80 percent of ranchers using federal lands make a
net income of less than $30,000 a year, and the BLM itself estimates
that 20 percent of calves shipped to feeder lots come off the
public range.
The relatively small number of ranchers benefiting from grazing
permits is indicative of the historic nature of the cattle industry
in the West especially, in which relatively few major producers
(including Babbitt’s own family) control large herds. One of the
nation’s largest federal grazing permits in Rock Springs, Wyo.,
is held by the Rock Springs Grazing Association, which actually
represents nearly 50 individual ranchers.
As a result not only of stagnant cattle prices, but increasing
regulations, the number of active permits on public land has declined
since 1988 by about 20 percent. Reduction in allowed AUMs on some
permits have declined in this decade by as much as 50 percent.
That the total number of cattle remains roughly the same reflects
the pressure on smaller operators, not the larger ones.
- Historically, the purpose of permits on public land was to aid
in organized development of the West and its settlements, something
that was accomplished. Permit holders were expected to operate
from their own deeded land near to the permitted range. This is
still true
- Improvements on grazing permits, including fences, water and spring
improvements and protection of riparian areas are the responsibility
of the livestock operator and done at substantial cost to the
permittee.
- Fair market value for grazing fees on private lands has been estimated
to be from nearly $6 per AUM to more than $17, with an average
estimate of $9.80 per AUM in 17 western states. However, unlike
federal leases, a private owner, not the lease holder, is responsible
for all improvements and care of the cattle as well as the range.
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and now administered by the Bureau of Land Management. Those earliest
fees amounted to five cents per Animal Unit Month–for the amount
of forage sufficient to sustain a cow and a calf or five sheep
for a month. Payments to the government for AUMs amounted to over
$10 million in 1998.
Aside from environmental issues discussed elsewhere in this report,
at the heart of arguments about grazing on public lands is the
question of a “subsidy” provided to federal permit holders who,
in theory, would have to pay more to graze on private lands.
The federal government has attempted to address that question
in numerous actions, beginning with the Independent Offices Appropriation
Act of 1952, which required fair market value for federal lands
leased or sold, and culminating most recently in the Department
of Interior’s Rangeland Reform of 1994, which attempted to tie
grazing costs to supposed environmental damage.
However, two laws are the key to federal grazing fees: the Federal
Land Policy Management Act (FLPMA) of 1976, and the Public Rangelands
Improvement Act (PRIA) of 1978, both of which attempted to tie
fees to the value of the land and the value of what it annually
produces.
Under PRIA in 1980, grazing fees reached their highest point in
history of $2.36 per AUM on BLM land and $2.41 on Forest Service
land. The fees proved to be unrealistically high in relation to
production and gradually fell back to $1.35 per AUM on all public
land, where they stood in 1999, while legal challenges continue
over Rangeland Reform.
IS IT A SUBSIDY?
In a variety of ways, from irrigation to price supports, the federal
government is said to subsidize much of American agriculture.
Government subsidies in one form or another, in fact, are common
in most agriculturally producing nations, and encouraged by international
trade agreements. |
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