January 5, 2005
Dear Public Lands Rancher,
I am writing to update you on various voluntary grazing permit buyout
projects in the West, as well as the current prospects for voluntary
buyout legislation in Congress.
By the close of 108th Congress, 26 members of the U.S. House of Representatives
from 14 states had cosponsored either the Voluntary Grazing Permit Buyout
Act (H.R. 3324) or the Arizona Voluntary Grazing Permit Buyout Act (H.R.
3337). Many joined the legislation at the prompting of conservation
organizations. Others were persuaded by ranchers like you who reported
that changes in markets, climate, laws, regulations and other conflicts
have made continuation of their public lands grazing impractical. We
anticipate gaining additional cosponsors when the legislation is reintroduced
into the 109th Congress in 2005.
Both H.R. 3324 and H.R. 3337 would compensate federal grazing permittees
or lessees who voluntarily relinquish their federal grazing permit or
lease in the amount of $175/permitted AUM (animal unit month). The associated
grazing allotment would be permanently retired from grazing use. For
example, if you have a permit to graze 300 cow-calf pairs for five months
per year, your permit amounts to 1,500 AUMs, which would be eligible
for a buyout payment of $262,500 under either bill. Neither bill would
affect management of allotments not retired for compensation and neither
bill would restrict the ability of ranchers to transfer permits to their
heirs or other ranchers.
Over 225 entities have endorsed voluntary grazing permit buyout, including
conservation organizations, sporting groups, businesses, and ranches.
While the vast majority of cosponsors on the national and Arizona bills
are Democrats, Republicans will also be pursuing voluntary permit buyout
in the next Congress. Following are two examples.
Central Idaho. In October 2004, Rep. Mike Simpson (R-ID) introduced
H.R. 5343, the proposed Central Idaho Economic Development and Recreation
Act (CIEDRA). While there was no time for Congress to consider the Idaho
bill before adjourning last fall, Rep. Simpson will be reintroducing
the legislation into the new Congress next spring. Title IV of the legislation
allows grazing permittees to voluntarily relinquish their permits in
exchange for generous compensation. Any permit to graze within an area
of approximately one million acres in north-central Idaho would be eligible
for buyout. The bill provides for $7 million to fund the buyouts. Rep.
Simpson has said that he wants the buyout price to be $300/permitted
Cascade-Siskiyou National Monument. President Clinton proclaimed
this national monument near my home in southern Oregon in June 2000.
While the monument proclamation put future livestock grazing in the
monument in doubt, grazing was already problematic under provisions
in the Northwest Forest Plan, which also applies to the area. Over a
dozen grazing lessees have asked the Oregon congressional delegation
to enact a buyout for their grazing leases. Working together, these
lessees and local conservationists have lined up the support of the
Governor, local state representative, local state senator, the three
county commissioners, the two daily newspapers in the county, the Jackson
County Stockmen's Association and the Oregon Cattlemen's Association.
As a result, both U.S. Senators Ron Wyden (D-OR) and Gordon Smith (R-OR)
and Rep. Greg Walden (R-OR) have agreed to seek a buyout. Given the
tremendous bipartisan and local support, I anticipate this effort achieving
success in 2005.
Let me take a moment to review the proposed rates of voluntary buyout
compensation being bandied about. First, the average west-wide market
value of a federal grazing permit/lease is approximately $35-$75/permitted
AUM. (Your banker can tell you more precisely what your AUMs are worth.)
Historically, most major conservation organizations have objected to
the government paying for grazing permit retirement. They contend that
since grazing on federal public lands is a privilege and not a right,
no compensation is due to a rancher who has had his permit reduced or
revoked. The National Public Lands Grazing Campaign argues the reverse.
Although public lands ranchers have no property right in their
grazing permit or lease, they do have a property interest, long
recognized by the financial and real estate markets (not to mention
the IRS). I am pleased to report that many conservation organizations
are now either beginning to agree with our perspective, or are at least
softening their opposition to voluntary permit buyout. One of the most
powerful of these organizations, the Sierra Club, supports paying $175/permitted
AUM as proposed in the two bills introduced in Congress. This is a great
step toward bridging the divide between the ranching and conservation
The chief sponsors of H.R. 3324 and H.R. 3337, Reps. Christopher Shays
(R-CT) and Raúl Grijalva (D-AZ), propose to pay $175/permitted
AUM because they want to avoid costly and contentious appraisals and
recognize that permittees/lessees often have equity in developments
on the allotment such as water projects and fencing. They also want
to acknowledge the investment (financial and otherwise) public lands
ranchers have made in their operations over the years.
By comparison, Rep. Simpson's proposed price of $300/permitted AUM is
approximately the capitalized value of securing replacement forage equal
to the retired public land AUMs. According to the National Agricultural
Statistics Service, the average cost of an AUM on private land in the
16 western states is $12.32. It would take approximately $300, invested
at a 4.25% interest rate (comparable to a 10-year secured U.S. Treasury
bond) to annually yield an amount in interest sufficient to rent forage
on private lands.
Both $175/permitted AUM and $300/permitted AUM are way above
the market value of any federal grazing permit. And if you have been
affected by an endangered species listing, drought or an onslaught of
recreationists on your allotment who leave gates open and shoot up your
water tanks, your permit is probably worth less than before.
However, NPLGC supports paying more than market value to retire permits
and leases -- both the Shays-Grijalva price of $175/permitted AUM and
the Simpson price of $300/permitted AUM. Also, these numbers are not
mutually exclusive. The $175 figure is offered as a comprehensive straight-up
voluntary permit buyout program. The $300/AUM is associated with additional
congressional conservation actions -- in this case the establishment
of new Wilderness areas. However, the political process in Congress
will finally determine what the standard figures for buyout will be,
and under what circumstances.
Not only are major national conservation organizations reacting to the
voluntary federal grazing permit buyout proposal, so too is the National
Cattlemen's Beef Association. The following was adopted by a unanimous
vote of the directors of the National Cattlemen's Beef Association on
August 13, 2004. It is subject to ratification at the next NCBA Annual
Convention in February 2005.
RANGELAND HEALTH AND PERMITEE SECURITY
WHEREAS, legislation has been introduced to authorize
the buyout of grazing permits on federal lands and environmentalists
are lobbying on behalf of the legislation in Congress,
WHEREAS, we oppose any grazing permit buyout and we oppose any net
loss of grazing Animal Unit Months (AUMs),
WHEREAS, the ranching industry needs a short-term policy that addresses
the immediate challenge posed by the introduction of the buyout proposal
and a long-term policy that addresses the causes and effects of the
creation of vacant grazing allotments on public lands,
THEREFORE BE IT RESOLVED, the NCBA supports the introduction of legislation
to compensate permittees for loss of income when permittees are forced
to relinquish grazing permits because of government policy and conflicts
with other multiple uses that render grazing impractical.
BE IT FURTHER RESOLVED, NCBA supports creation of an industry task
force to develop a comprehensive legislative proposal for introduction
in Congress to strengthen grazing on public lands by:
- promoting rangeland health;
- focusing the commitment of federal funds on resource management
rather than administrative processes, to the extent allowed under
the law; and
- other factors needed for a healthy and vibrant grazing industry
on public lands.
The NCBA's change in position on permit buyout is significant -- but
inadequate, insofar as a comprehensive voluntary grazing permit buyout
program is concerned. I interpret this language ("therefore be
it resolved") to mean that NCBA will support compensation to a
distressed permittee/lessee only when the hammer of government
action (due to endangered species, grazing rules, multiple use conflicts
or whatever) has already been dropped.
The goals of new legislation identified in the NCBA resolution ("be
it further resolved") would prove difficult to attain, especially
addressing "other factors needed for a healthy and vibrant grazing
industry on public lands" (last line of resolution). To achieve
this goal, at a minimum, Congress would have to: (1) repeal at least
a dozen environmental protection statutes; (2) ban foreign beef imports;
(3) force consumers to eat more beef; (4) restrict recreation on public
lands; (5) increase the price of beef; (6) decrease the cost of production;
(7) end drought or the threat of drought and (8) require ranchers
to graze public lands, even at loss.
If you would like the option of being generously compensated for waiving
your interest in a federal grazing permit/lease, you need to inform
the leaders in the public lands grazing industry of your opinion. Even
if you are not a member of the NCBA or a state affiliate, they need
to hear from you, as they purport to represent you on Capitol Hill.
In addition to contacting any local cattle industry leaders you know,
you may also wish to express your opinion to the chief NCBA public lands
lobbyist before the NCBA Annual Convention in San Antonio on February
Jeff Eisenberg, Director of Federal Lands
National Cattlemen's Beef Association
1301 Pennsylvania Ave. NW, Suite 300
Washington, D.C. 20004
(202) 347-0228 voice
(202) 638-0607 fax
I would like to close by sharing with you what I've been telling my
reluctant colleagues in certain conservation organizations that either
oppose paying for grazing permits or leases or want to limit payments
to market value. I tell them that federal lands grazing permits are
increasingly becoming stranded investments due to a multitude of factors,
including, but not limited to: (1) irreconcilable multiple use conflicts;
(2) an increasing number of recreationists on public lands spilling
out from increasing urban populations; (3) increased enforcement of
environmental laws; (4) foreign beef imports, and (5) the increased
economic and political clout of meat packers. I also tell them that
public lands grazing is a part of the rural American West that is being
left behind by the modern global economy and that I believe that we
are a rich country that should not leave anyone behind. Permit buyout
is a way to recapitalize a part of the American rural West that is in
Some of my colleagues ask me what the ranchers will do with the money.
I tell them that some will take the money and reconfigure their operations
exclusively on private lands without a federal overseer. Others will
use it to get clear of the bank and have a little something left over.
Others will invest in a new business, retire, or leave a cash legacy
for their heirs.
Conservationists and ranchers will probably never agree on most public
lands grazing issues. But we need only agree on one thing: that if you
want to sell your interest in your grazing permit back to the government,
you ought to be able to do so.
If you want a buyout of your grazing permit/lease, if you want the option
as insurance (against drought, fire, bureaucrats and/or markets), or
if you think your neighbor should have the right to sell his/her permit,
you need to speak up.
Thank you for your consideration. Please contact me if you have any
questions or comments about voluntary federal grazing permit buyout.
I look forward to hearing them.
P.S. If you want to explore the possibilities of enacting a site-specific
buyout of grazing permits for yourself and others in your area (such
as the CIEDRA bill in Idaho or the Cascade-Siskiyou National Monument
opportunity in Oregon), please contact either myself or one of the NPLGC
Steering Committee members listed on the letterhead.