Voluntary Grazing Permit Buyout Legislation:
Price Per AUM

Both voluntary federal grazing permit buyout bills (H.R. 3324 and H.R. 3337) propose to pay ranchers $175 per AUM (animal unit month) to retire their grazing permits or leases. Some conservationists object to this price and some object to paying for permits/leases at all. This paper discusses those objections and explains why paying above fair market value (FMV) is both justified and desirable. Following are common concerns and responses to paying above FMV to retire grazing on federal public lands.

Concern: Why pay at all for permits/leases? Grazing permits do not convey grazing rights but only privileges that may be amended or revoked without compensation at any time.

Response:
Although federal management agencies are authorized to amend or revoke grazing permits/leases without compensation, they rarely do, as amending or revoking a permit is often time consuming and expensive, both fiscally and politically. Offering to buyout grazing permits would be well worth the time, effort and cost involved.

Concern: Permit buyout will create a property right in grazing permits and leases.

Response: No, it will not create any property right whatsoever. Both bills explicitly prevent such an interpretation. Permits and leases will still be amendable or revocable without compensation as they are now. It is also likely that revocation or modification of permits and leases to protect resource values may occur more often if a buyout program was established because local land managers would know that the grazing permittees/lessees have a financial out in case of permit/lease reductions. The wise rancher would opt for buyout long before any such reduction became official.

Concern: Current efforts to negotiate third-party buyouts of grazing permits have suffered due to the high price set in the buyout bills. Conservation organizations negotiate buyouts at FMV but when ranchers hear of the higher price set in the bills, they demand that price instead.

Response:

Concern: Paying above FMV is bad policy and sets a bad precedent.

Response:

Concern: It would take money away from other programs.

Response: As evidenced by the deficit, the federal budget is not a zero-sum game. Support for permit buyout in the public lands ranching community is growing stronger every day. With permittees and conservationists lobbying for the same program, which also happens to be a good investment, Congress will find the additional money necessary to retire grazing permits/leases. When lobbying for increased NEPA funding, do we worry that it will take money away from ESA enforcement?

Concern: Make the polluter pay.

Response: The status quo for public lands grazing is that taxpayers pay the polluter to continue trashing the environment. Conservationists have attempted to raise the federal grazing fee (but not close to fair market value) and failed miserably.

Summary:
Paying $175 per AUM:
1. ensures all allotments will be covered
2. encourages rancher participation both in the legislative process and in the resultant permit buyout program,
3. is fiscally justified because it ends ongoing subsidies for public lands ranching, and
4. can foster conservation alliances with the ranching community.