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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.
Percent of income spent on at-home food consumption (including alcohol). Source: Economic Research Service. Computed by Brigit Mead, ERS, from data provided by the UN System of National Accounts.

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.


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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