the Southwest's Wild Forests, Rivers and Grasslands
June 24, 2002
CONTACT: John Horning (505) 988-9126 x153
Richard Mietz (505) 757-8431
|312 Montezuma, Ste A, Santa Fe, NM 87501, 505/ 988-9126|
$450 Million in Bank
Loans to Public Lands Ranchers
Guaranteed With National Forest Grazing Permits
SANTA FE, NM Hundreds of local, regional and national banks have issued more than $450 million in loans to western public lands ranchers who rely on national forest grazing permits as collateral, according to information released today by Forest Guardians. The information was provided as a result of a more than four-year effort by Forest Guardians, including a three-year Freedom of Information Act lawsuit, to obtain information about the financial scope of the U.S. Forest Service's escrow waivers policy, which enables national forest ranchers to utilize grazing permits to secure loans.
Among the bank and insurance companies that have issued loans to western ranchers based on grazing permits are some of the largest financial institutions in the world, including Metropolitan Life Insurance, Mutual Life Insurance, and Prudential Life Insurance. The majority of the 'escrow waiver' agreements though, are held by federal and quasi-federal lending entities such as the Federal Land Banks, the Farmers Home Administration and the Farm Service Agency.
Forest Guardians claims the 'escrow waiver' policy, established first in 1938 in the midst of the economic collapse of the dust-bowl era, has enabled banks to become a silent player in the subsidized destruction of western public lands, and has called on the Forest Service to abolish the policy. By making loans based on cattle numbers identified in grazing permits, banks have become powerful advocates for the maintenance of environmentally damaging grazing numbers. The 1938 policy, which was updated in 1990, is actually a memorandum of understanding between numerous agricultural banks including foremost the Farm Credits Banks and the U.S. Forest Service.
"It's no surprise that the ranchers and the banks fought us tooth and nail to prevent the disclosure of the fact that $450 million in bankers' money is invested in an activity that pollutes streams, endangers fish and wildlife and alters natural fire ecology," said John Horning, Director of Forest Guardians, referencing the fact that various banks and livestock interest groups intervened in the groups Freedom of Information Act lawsuit. "We believe that as more of the public learns that our national forests are being used as collateral to sustain environmentally damaging livestock grazing that they will demand the policy be abolished."
According to the information released today, the Rocky Mountain Region of the Forest Service, with more than $131.5 million, followed by the Intermountain ($122.8 million) and Southwest Regions ($103.9 million) have the greatest amount of financial capital tied up in grazing permits. A map highlighting regional amounts is available at: http://www.fguardians.org/maps/escrow_map2.jpg. Although the information released by the Forest Service does not include the individual areas of national forest that are encumbered by escrow waiver agreements, the group estimates that at least 20 million acres of western national forests are effected by escrow waiver agreements.
The information was provided pursuant to a settlement agreement between Forest Guardians and the U.S. Forest Service approved by U.S. District Court Judge Edwin Mechem on 7-28-01. Forest Guardians had originally filed its information request in November, 1998 and filed suit in June 1999.