President Obama recommends increasing grazing fee

Feb 24, 2012

Public lands ranchers breathed a collective sigh of relief Jan. 31 when the Bureau of Land Management (BLM) and Forest Service announced that the 2012 grazing fee would remain at $1.35 per animal unit month (AUM), the lowest rate allowable. It therefore came as a shock to many that in Obama’s 2013 budget proposal to Congress, the administration was recommending an extra $1 per AUM be charged to public lands ranchers as an “administrative fee” to help cover the costs of the range program.

According to written testimony provided by Secretary of Interior Ken Salazar to the House Natural Resources Committee in defense of the proposal, the $1 per AUM fee would be charged on a three-year “pilot basis” during which BLM would draw up regulations to make the fee add-on permanent.

“The fee is established to generate $6.5 million in 2013 and will be used to assist BLM in processing grazing permits,” Salazar wrote, referring to the substantial backlog of grazing permit renewals BLM has accumulated.

Salazar went on to explain that the $6.5 million garnered from adding a dollar to the existing grazing fee would also help to mitigate fallout from another proposal in the president’s bud get: slashing the range program by $15.8 million.

Despite causing deep concern throughout the public lands grazing industry, the fee increase and range budget cut recommended by the president are not imminent. The president’s budget proposal is only a recommendation to Congress, which will write the final 2013 budget over the coming year. Yet industry leaders emphasized that they will be working closely with their congressional representatives to ensure that these measures do not find their way into the final 2013 spending bill.

The proposed fee increase suggests that anti-grazing groups, which have long maintained that public lands grazers are “welfare ranchers” subsidized by artificially low grazing fees, have bent the ear of the administration.

Although opponents of public lands grazing were quick to applaud the gesture, many maintained the proposed $1 increase wasn’t nearly enough to cover what they see as the actual cost of the grazing program.

According to a 2005 Government Accountability Office report frequently referenced by anti-grazing groups, in FY2004, BLM spent $58.3 million administering the grazing program while collecting only $11.8 million in receipts, leaving a net loss of $46.5 million. Brian Ertz, media director for Western Watersheds Project, stated in his blog that the $6.5 million revenue that the president’s fee increase would generate would hardly make a dent in that amount, and that the fee would have to be raised to $7.64 per AUM for the program to break even.

“Put another way,” Ertz stated, “for every $1 that public lands ranchers pay to graze their cattle and sheep on public lands, the American taxpayer paid $4.66 to facilitate those same ranchers’ cattle and sheep destruction of our public lands.”

These allegations have been vigorously disputed by the public lands grazing industry. In a Feb. 15 press release, Public Lands Council Executive Director Dustin Van Liew submitted that the proposed grazing fee increase and range budget cut are “further proof that this administration does not understand American agriculture.”

“The current grazing fee is fair,” Van Liew continued. “In fact, most public lands ranchers already pay more than market price for their federal permits, considering factors such as added regulatory costs, increased predation … maintenance of improvements and the difficulties of managing livestock in rough, arid terrain.”

The public lands grazing fee is established each year by a formula originally codified in the Public Rangelands Improvement Act (PRIA) of 1978. Although the grazing fee formula portion of PRIA expired in 1985, the formula was, with minor amendments, administratively reinstated by an executive order issued by President Ronald Reagan in 1986. Since the formula has been in use, annual grazing fees have ranged from $1.35 to $2.31 per AUM, with $1.35 being the established minimum.

According to the executive order (which remains in effect), changes in the grazing fee are not to exceed 25 percent up or down in a given year. By contrast, the president’s proposed $1 per AUM increase would effectively raise the grazing fee by 74 percent. However, by calling it an added “administrative” or “procedural” fee instead of an increase to the actual grazing fee, it is conceivable that a fee of this kind, were it to make it into the final spending bill, would not be restricted by the 25 percent change limit.

“What their argument is going to be is that the grazing [formula] is what Congress said it is, but they’re simply trying to recoup their administrative costs,” observed Karen Budd-Falen of Budd-Falen Law Offices.

For those paying the bill, however, the difference between a grazing fee and an “administrative fee” is not likely to matter much.

“I guess they’re calling it something else,” remarked attorney Bill Myers of Holland and Hart, “but it sure sounds like it’s going to feel like a grazing fee increase to the ranchers who are paying it, because it’s going to be based on an AUM basis.”

Although it remains unclear whether Congress’ 2013 spending bill will incorporate the added grazing fee and range program cut, the president’s budget proposal serves to provide an interesting window into the administration’s priorities and agenda. Some programs come away clear winners, with the expense being balanced, according to Salazar, by “reductions in lower priority programs.”

For example, of the $11.5 billion requested for the Department of Interior, a staggering $5.1 billion, or 45 percent, is alone allocated in the president’s budget for projects in the “America’s Great Outdoors” initiative, a program dedicated to recreation and conservation. This represents a $145.6 million increase over 2012 funding for the program, a significant fraction of which is directed at new federal land acquisitions.

Other winners include the National Landscape Conservation System and BLM’s sage grouse initiative, which is allocated $15 million for conservation and restoration measures.

Public lands ranchers will take some comfort in the fact that Congress has expressed its commitment to maintaining the BLM range program by increasing the 2012 range budget by $10.5 million above FY2011 levels. Yet the president’s 2013 spending proposal serves as a stern warning to ranchers that for this administration, recreation appears to be the ascendant land use and focus of investment, while grazing, which Salazar has referred to as a “historical” use, would seem to be of diminishing importance and undeserving of investment. — Andy Rieber, WLJ Correspondent