THE FOREST SERVICE WESTERN GRAZING FEE

Frequently Asked Questions

Q: How is the Forest Service western grazing fee calculated and why is flawed?

  The Forest Service calculates fees in different ways according to different regulations covering different areas. In eastern States fees are set by reference to market rates, and in some instance by competitive bidding.
 
  In 1978, the Public Rangeland Improvements Act (PRIA) established a fee formula on an experimental basis for National Forest and BLM grazing operations in sixteen western states, to “prevent economic disruption and harm to the western livestock industry.”  It is difficult to see how the fee would have much significance for the industry as grazing on western public lands accounts for less than 4% of national livestock production (Power 2002).
 
  Annual changes in the fee was linked to “annual changes in the cost of production.” The formula starts from a base value based on market rates in the base year of 1967.  This base fee is adjusted annually thereafter by factors that track annual changes in forage value, prices paid for beef and costs of production as published annually by the National Agricultural Statistics Service. When the experimental period expired in 1986, President Reagan directed the agencies to keep using the formula by Executive Order.The fee on National Grasslands is set at slightly higher levels using a similar formula.
 
  The western National Forest grazing fee formula is flawed as it deducts annual increases in rancher costs twice but adds annual increases in beef prices paid to ranchers only once (GAO 1991a, Torell et al. 2001). Thus, the fee fails to track changes in market rates, and has barely risen above the regulatory minimum since its inception. In 2003, the grazing fee is at the minimum of $1.35 per animal unit month or AUM (taking effect on March 1), while the National Agricultural Statistics Service reports that average market rate in the sixteen western states in 2002 was $13.50/AUM. Market rates vary from a low of $7.30/AUM in Arizona to a high of $20.90 in Nebraska. An “animal unit month” is equivalent to a cow and her nursing calf, or five sheep feeding for one month on federal land.
 
  In 1994, the BLM and Forest Service jointly proposed to reform the fee formula in Rangeland Reform '94 (USDI and USDA 1994). A new base rate was proposed of $3.96/AUM for the base years 1990-1992 with annual adjustments based solely on changes in forage values, and a cap of 25 percent change per year. This reform was predicted to greatly increase cost recovery for the U.S. Treasury. Ultimately, the fee reform was never adopted.
 
  The BLM published a decision not to adopt the new formula, while the Forest Service published no decision.

  Proponents of the current formula argue that public rangeland is not as high quality as private rangeland, thus accounting for the disparity in fees. However this argument neglects to account for the fact that on both private and public lands the fee is calculated per AUM rather than per acre. Lesser value forage requires a larger tract of land to sustain the animals for the same period of time. Thus, to a large extent, variation in forage quality is covered by basing fees on occupancy by livestock, not area.

  Costs to run cattle on public lands are higher on average than costs on private lands. Private ranchers spend up to $40 more per head of cattle than public lands ranchers (USDI and USDA 1994).

  Furthermore, ranchers who do not have public permits often sublease public lands (legally in some cases on BLM lands, but usually illegally) at market rates several times more than what the permittee pays. This indicates that public rangeland is comparable to private, unirrigated rangeland and is undervalued by the present fee formula (GAO 1986).

Q: What is the scale of grazing on National Forests and Grasslands in the West?

    The western section of the US National Forest system is divided into six administrative regions across 16 states:Northern (northern ID, WY, ND); Rocky Mountains (SD, eastern MT, CO, NE, KS); Southwestern (AZ, NM, OK & TX National Grasslands); Intermountain (NV, UT, southern ID, western MT); Pacific Southwest (CA); Pacific Northwest (OR, WA). Approximately 95 million acres respresenting 65% of the entire National Forest system area is grazed by livestock in the West.
 
 In this area there are approximately 7,242 permits issued for 1,224,000 cattle, 6,111  horses or burros and 2,515,720 sheep for a total of 7,891,457 AUMs (Year 2000 figures).

This represents 99% of all livestock grazing permitted on all U.S. National Forests or Grasslands.  77% of grazing is on National Forests and 33% on National Grasslands.  National grasslands represent 26% of the area of the western National Forest System.
 
Grazing use and land area is distributed among the six western regions as follows:

 
Region
% of all grazing
%Area
Northern
15.1
17.5
Rocky Mtns
28.7
15.2
Southwest
21.5
14.3
Intermountain
22.3
22.1
Pacific SW
5.8
13.9
Pacific NW
6.7
17.0

  The Rocky Mountain and Southwestern regions are the most heavily grazed regions, carrying 50% of all grazing on only 30% of total Forest System land area.

  There is also 11,814 of “free use” permitted, for which no fees are charged, as well as 2,806 of unauthorized use. (U.S. Forest Service, 2000)

Q: What environmental damage results from grazing on Forest Service lands?

Endangered species impacts

  According to the Forest Service study of Flather et al (1994, 1998), livestock grazing is the most common cause of species becoming listed as endangered in the Southwest region.  Grazing was the second most common cause of all US plant species becoming listed, second only to urbanization/development.  24% of all species affected occur on National Forest System lands.
 
  In ten US regions identified as hotspots for species endangerment, grazing was the most common cause of endangerment in southern Arizona and the Colorado Plateau, third most common in Nevada and west Texas, and fourth most common in California. Nationwide it is the fourth most common cause, with agricultural development and exotic species being the first and second most widespread causes.  Both of these causes are closely connected to livestock grazing.  Most agricultural production is for livestock feed or forage, while weed invasions are encouraged by livestock (Belsky & Gelbard, 2000).

Ecosystem impacts

  In the desert Southwest, Forest Service biologists have been saying that livestock grazing should not happen on Forest Service lands (letter by ex Forest Service biologist Leon Fager in Albuquerque Journal 7/10/98).
 
  Livestock compact soils, and create bare ground by trampling and removing vegetation. In desert areas livestock destroy natural microbiological soil surface crusts that stabilize soils, prevent weed germination and fix atmospheric nitrogen.
 
  Soil compaction reduces infiltration of rainfall, and also the recharge of water tables and aquifers. The rainfall that does not enter the soil instead flows over the surface.  Because the soils have lost protective cover due to livestock the higher flow of water erodes more soil than in ungrazed areas.  This deposits more sediment into streams affecting native fish and their insect prey that rely on clean water and gravel bottoms without fine sediments.
Because of reduced recharge of water tables, many once perennial desert streams have become dry for much of the year, while during rainfall events flows are too high and destructive.  Because livestock eat the saplings of trees in streamside areas and eat the grass and trample streambanks, streambanks quickly erode and channels have become wide, bare and shallow with seasonally sediment laden water unlike the deep narrow and shaded channels with perennial clear water found in ungrazed streams (Belsky, Matzke & Uselman, 1999).
 
  Landscape scale vegetative shifts away from grassland to woody thickets has resulted from grazing. Soil loss has resulted in long term reduction of productivity of grasslands. Livestock remove the inhibition by grasses of juniper, pines and other shrubs which consequently invade and degrade grassland habitat, in some place creating hyperflammable thickets of pines.  Livestock have also destroyed the natural fire cycle that maintained grasslands by removing the fuel for frequent cool, grassfires that helped to keep woody vegetation in check. (Reviewed by Belsky & Blumenthal, 1995)
 
  Even grazing at light or moderate levels causes significant impacts on wildlife and habitat in the arid West. Jones, (2000) reviewed over 50 studies of arid western ecosystems found significant reductions in rodent diversity, vegetation, soil crusts, soil stability. Many other authors report significant negative impacts to wildlife by livestock and ranch developments.

EXAMPLES

Pacific Northwest
  In a comparative study of grazing exclosures on National Forest streams in the Pacific NW, Rhodes & Green, (2001) found that grazing as presently managed was preventing stream habitat from reaching the salmonid habitat objectives in the Forest plans.
Gila Trout Recovery
  Two million dollars were spent on Gila trout recovery efforts prior to 1993, and $1 million was projected to be spent between 1993 and 2000. Since cattle graze on the great majority of the Gila trout’s former range, the recovery program has been limited to introducing and protecting tiny, unsustainable populations in small headwater streams. These “emergency room” populations are extremely expensive to sustain. “The species is in greater peril of extinction today than when recovery efforts started because the [recovery] team wants to avoid controversial issues such as domestic livestock grazing.” (Ohmart, 1996)
Southwestern Forests
 In settlement of a lawsuit brought by the Center for Biological Diversity to protect eight species of threatened or endangered native fish and an endangered songbird in 1998, the Southwest region of the Forest Service agreed to fence livestock out of 330 miles of rivers and streams, after recognizing the profoundly damaging impact the livestock have on sensitive streamside and instream habitat for endangered species (Arizona Republic 4/18/1998 p. B5).  Because fees were inadequate to pay for this protection, the taxpayer had to pay for the fencing.

Q: Does the Forest Service lack funds needed for restoration as a result of the low fee?

  Forest Service grazing fee income is divided by regulation as follows: 50 percent to the Range Betterment Fund which is used solely for construction of range developments such as fences, cattleguards, tanks, pumps and pipelines by local Ranger districts; 25 percent to states and counties (some of which may also support ranching), and 25 percent to the U.S. Treasury.
 
  In a series of studies the General Accounting Office (GAO) showed that the low grazing fee was depressing funds needed for resource protection programs, resulting in ecological harm. In a 1988 study the GAO  identified the main limitation on riparian area improvement as the lack of funding for skilled staff to implement protection programs. The study also detailed the ecological damage to riparian areas caused by livestock and profiled 22 cases of dramatic recovery after areas were fenced off from cattle (GAO/RCED-88 –105).
 
  In another 1988 study “Rangeland management: more emphasis needed on declining and overstocked grazing allotments” the GAO found a pervasive failure to fulfill the goals set out by PRIA over a decade before (GAO/RCED –88-80). Both land agencies reported that over 50% of public rangelands were still in fair or poor condition, while almost one fifth of rangelands were overstocked, with potential to degrade further.  GAO found much of the data in range inventories was over 5 years old, and inaccurate for setting proper grazing levels. The Experimental Stewardship Program set up under PRIA had not improved range conditions, despite diversion of 50% of grazing receipts to the Range Betterment Fund.  The GAO reported that “there was a $12.6 million backlog of unfunded range improvement projects” indicating that grazing receipts were inadequate for the purposes of environmental protection.
 
In a 1991 study “Rangeland management: Forest Service not performing needed monitoring of grazing allotments” the GAO found that Forest Service monitoring duties were widely neglected due to inadequate staffing to perform “competing responsibilities.” (GAO/RCED-91-148)
  In the 1991 study “Rangeland management: Current formula keeps grazing fees low” the GAO concluded that a principal impact of the low grazing fee was that:
“existing levels of program management and range improvement are insufficient to perform all important functions and restore lands damaged by previous grazing activity. Among the functions we have shown to be receiving insufficient resources are livestock grazing trespass enforcement, grazing allotment monitoring, allotment management planning, and riparian area restoration.” (p. 24)
In the Rangeland Reform Draft Environmental Impact Statement (DEIS 1994) it was disclosed that “Under the BLM-Forest Service proposed grazing fee…Range betterment Funds would increase by 82 percent…As a result monitoring of resource conditions could increase and the agencies could invest in large restoration projects.” (p. 4-41)
The DEIS noted that “if the current fee formula is retained, Range Betterment Funds would decline by 21 percent…[and] livestock use would become increasingly difficult to manage” (ibid.)

EXAMPLES

Sierra Nevada Forests, CA
  The scientific review of the Sierra Nevada Framework disclosed that “Public grazing (which contributes 1% of total Sierra Nevada resource value) is estimated to produce a deficit return of $7 million due to the high costs of administration and the fact that public grazing fees are far below those charged by private land owners.” (U.S. Forest Service Science Review Team, 1998)
Tonto National Forest (AZ)
  To mitigate for destroying riparian habitat around Roosevelt Lake, by raising the lake level the Bureau of Reclamation spend $2.1 million to fence cattle out of riparian areas on eleven National Forest allotments around Roosevelt Lake. This money came out of Treasury funds, not out of grazing fee receipts.
Apache-Sitgreaves National Forest (AZ)
  In 1996, the U.S. Forest Service and the Arizona Department of Game and Fish spent $350,000 to fence cattle out of habitat for the threatened Apache trout. They spent $100,000 on one allotment alone, which generated only $2,500 per year in grazing revenue for the Forest Service. Then in 1998 The Forest Service issued a decision to spend $150,000 on fences, pipelines, and stock tanks to keep cattle out of habitat for a threatened fish in Eagle Creek. Revenue from grazing fees is $4,000 per year on this allotment.
Coconino National Forest (AZ)
  In 1995 the Forest Service issued a decision to spend more than $600,000 on a livestock management plan for the Apache Maid grazing allotment. The expense was primarily on fencing to keep cattle out of sensitive riparian areas.  In 1999 another decision was made to spend $223,000 on fencing, and other development to prevent streambank degradation in Oak Creek, Dry Creek, and Jack’s Canyon on Windmill allotment, which brings in a maximum annual revenue of $5,141 in fees.
Gila Basin Allotments (AZ and NM)
In 6/25/98 Rep. Joe Skeen (R-NM) spearheaded a Treasury appropriation of $400,000 to fence cattle from streams on National Forests in the Gila River basin to implement protection of threatened fish habitat. Grazing fee receipts were completely inadequate for the cost of meeting the species protection needs.  The Gila National Forest in its 2000 report states that funding is insufficient for monitoring and protection needs.
Cibola NF (NM)
In Jan 2002, the Mountainair District Ranger withdrew a proposed action for thinning, prescribed burn and erosion control actions to rehabilitate range damaged by livestock because there were not enough Range Betterment Funds to pay for these projects.

Q: How much more funding could be available if the fee were reformed as the Forest Service proposed in 1994?

  Implementing the fee formula proposed in Rangeland Reform would result in a fee for 2002 of $5.76 as opposed to the $1.43 set in that year.
If the Forest Service is correct that no decrease in demand would result from this fee increase, year 2002 income from grazing receipts would have increased from $11.3 million, to $45.45 million, a fourfold increase.

Q: To what extent does the low fee affect ranchers on non-federal lands?

  Some permittees profit from illegal subleasing of Forest System lands at market rates to other ranchers who do not have permits.
 
  A 1986 study by both BLM and Forest Service examined 47,918 individual grazing permits throughout the West and documented more than 1,000 cases of illegal subleasing. (USDA Forest Service and USDI Bureau of Land Management, 1986). Sometimes the permittees can get a return of more than 15 times what they pay for the permit by subleasing at market rates (Stein & Sahagun, 1989).
 
  Federal permittees enjoy an unfair competitive advantage due to the low grazing fee. Rangeland Reform compared livestock operators with and without federal grazing permits, finding that “nonpermittee net costs are about $40 per cow higher than permittee costs” (DEIS Exec. Summ p 29).
 
  Public lands account for less than 4% of all livestock in the entire US (Power 2002). Nevertheless hardship placed on non permittees due to beef underpricing by permittees could become significant at the local scale, forcing smaller operators out of business who are fully exposed to market pricing.



REFERENCES

Belsky, J. & Blumenthal, D. M. (1997). Effects of livestock grazing on stand dynamics, and soils in upland forests of the Interior West. Conservation Biology 11, 315-327.
Belsky, J., Matzke, A. & Uselman, S. (1999). Survey of livestock influences on stream and riparian ecosystems in the western United States. Journal of Soil and Water Conservation 54, 419-431.
Belsky, J. A. & Gelbard, J. L. (2000). Livestock Grazing and Weed Invasions in the Arid West, pp. 1-31. Oregon National Desert Association, Bend, OR.
Flather, C. H., Joyce, L. A. & Bloomgarden, C. A. (1994). Species endangerment patterns in the United States, 42 pp. USDA Forest Service, Ft Collins.
Flather, C. T., Knowles, M. S. & Kendall, I. A. (1998). Threatened and endangered species geography:characteristics of hotspots in the coterminous United States. Bioscience 48, 365-276.
Gila National Forest. (2000). Annual Monitoring Report for Implementing the Gila National Forest Land Management Plan Fiscal Year 2000. US Forest Service, Silver City, NM.
Jones, A. (2000). Effects of cattle grazing on North American arid ecosystems: a quantitative review. Western North American Naturalist 60, 155-164.
Ohmart, R. D. (1996). Historical and present impacts of livestock grazing on fish and wildlife resources in western riparian habitats. In Rangeland Wildlife (ed. P. R. Krausman), pp. 245-279. Society for Range Management, Denver.
Power, T. M. (2002). Taking stock of public lands grazing: an economic analysis. In G. Wuerthner and M. Matteson (eds).Welfare Ranching: the subsidized destruction of the American West , pp. 263-270. Island Press, Washington DC.
Rhodes, J. R. & Green, M. J. (2001). A comparison of the condition of salmonid habitat attribute conditions within exclosures and in grazed reaches: an assessment of the compatibility of grazing with the attainment of salmonid habitat objectives. Columbia River Inter-Tribal Fish Commission, Portland OR. Stein, M. A. & Sahagun, L. (1989). Controversial BLM grazing program; ranchers turn a profit by subletting U.S. land. In Los Angeles Times, Home Edn. Part 1, p. 1., Los Angeles CA.
U.S. Forest Service. (2000). Grazing Statistical Summary FY2000. U.S. Forest Service, Washington DC.
U.S. Forest Service Science Review Team. (1998). Sierra Nevada Science Review, 149 pp. USDA Forest Service, Pacific Southwest Research Station.
USDA Forest Service and USDI Bureau of Land Management. (1986). Grazing fee review and evaluation final report 1979-1985: A report from the secretaries of agriculture and interior. USDA Forest Service and USDI Bureau of Land Management., Washington DC.