Andy Kerr - Permits for Cash

By Mark Salvo and Andy Kerr

Since 1998 an increasing number of conservation organizations have advocated for federal legislation to authorize and fund a program to allow livestock operators to relinquish their federal grazing permits back to the government in exchange for compensation. The legislation would require the managing agencies to permanently retire the permits, reallocating forage to wildlife and watersheds and allowing associated allotments to recover from domestic livestock grazing. Compensation paid to operators would be based on the fair market value of each permit. Operators who participate in the program would still own their base properties, and could use their payments to restructure their ranch (including purchase more private grazing land) or retire (Kerr 1998).

Permit Retirement Generally Prohibited

Permanent permit retirement is prohibited under current law which effectively requires Bureau of Land Management and Forest Service managers to transfer grazing permits to new graziers upon the resignation or retirement of the previous permittee. (Permits are cancelled without permittee consent in rare cases where the associated allotment has been severely overgrazed, it is court ordered, or Congress so directs, such as within a national park). However, there are numerous examples where conservation organizations, livestock operators, and federal proprietors have worked creatively, within the bounds of current law, to retire permits. In some cases, Congress has also passed legislation that explicitly authorized permit retirement on specially designated land. These examples have demonstrated permit retirement as a socially compassionate, policy efficient, politically expedient, and ecologically responsible way to end livestock grazing on public land.

Permit Retirement Examples Argue for Federal Program

The following examples represent a variety of purposes for permit retirement and the numerous agencies and private parties that have been involved. The price per acre or animal unit month (AUM) has varied depending on the location, the payor, and other circumstances. Retiring the permit was voluntary in every case, and respect and cooperation between the permittee, government agencies, conservationists, and legislators was the key to completing each transaction. Where available, permit retirement has been very successful, supporting conservationists' proposal for a much broader, federally financed program.

Great Basin National Park, Nevada. In 1996 under the leadership of Senator Harry Reid (D-NV), and with the support of the entire Nevada delegation (two Republicans, two Democrats), Congress amended the law that established Great Basin National Park to allow permittees to donate their grazing permits for allotments inside the park back to the Park Service (16 U.S.C. ¤ 410mm-1(f)(2)). In 1999, three permittees agreed to relinquish their permits for cattle grazing in the park and part of the adjacent Mt. Moriah Wilderness in exchange for compensation from a host of conservation foundations. Permits were retired on Park Service, Forest Service and BLM lands. The transaction was also supported by the Nevada Cattlemen's Association, the Nevada Commission on Tourism, and the U.S. Fish and Wildlife Service. A total of 2,429 AUMs on 101,000 acres were retired for approximately $2.20 per acre or $90.61 per AUM.

Grand Staircase-Escalante National Monument, Utah. In 1998-9 the Grand Canyon Trust negotiated and raised funds to close or partially close 11 grazing allotments in the Grand Staircase-Escalante National Monument and nearby Glen Canyon National Recreation Area. Five permittees agreed to trade allotments or relinquish their permits to the BLM in exchange for fair compensation from Grand Canyon Trust. The BLM administratively retired the permits by amending the Escalante Management Framework Plan to reallocate forage to “wildlife, watershed conservation, riparian and fisheries” (Utah BLM 1999). Four allotments were closed in their entirety and portions of four other allotments were also closed, removing 3,853 AUMs from nearly 100,000 acres on 132 miles of riparian canyons. Additionally, grazing reductions were achieved on three upland allotments amounting to 1,377 AUMs.

Bear Valley, Frank Church-River of No Return Wilderness, Idaho. The Elk Creek Allotment in the Frank Church-River of No Return Wilderness includes much of the Elk Creek drainage in Idaho, a tributary to the Snake River and prime riverine habitat for federally threatened or endangered chinook salmon, steelhead, bull trout and westslope cutthroat trout. In 1998 then-Senator Dirk Kempthorne (R-ID) proposed that the Bonneville Power Administration use fish restoration funds to purchase and retire the grazing permit for the allotment to protect and restore habitat for these sensitive species. The power agency agreed to the proposal (partly in an attempt to shift the Snake River dam removal debate to salmon habitat restoration), as did the Idaho Department of Fish and Game and Shoshone-Bannock Tribes. The livestock operator volunteered to retire the permit. Although there was some concern over how BPA and the Forest Service could legally retire the permit, BPA eventually paid for the permit outright, and the Forest Service drafted a planning amendment to the forest management plan to retire the allotment. The cost was $145,000 for 1350 AUMs on 49,000 acres.

Arches National Park, Utah. In 1998, Congress added Lost Spring Canyon (3,140 acres) to Arches National Park. Under BLM ownership, the entire Lost Spring Canyon system had been grazed for many years by one permittee. As Congress considered adding the canyon system to the park, the Grand Canyon Trust reached an agreement with the permittee to retire his grazing permit. Congress enacted language authored by the Grand Canyon Trust in the Lost Spring Canyon bill that gave legislative backing to the retirement deal and directed the Park Service to close the allotment as soon as the permit was relinquished (16 U.S.C. ¤ 272b(b)). With all the preliminary work completed, the permittee was compensated and the permit retired the day after the legislation was signed into law. This permit retirement was the result of foresight and good working relationships between the Grand Canyon Trust, Arches National Park staff, Rep. Chris Cannon (R-UT), and the permittee.

Permit Retirement Saves Tax Dollars

The total forage allocated to livestock grazing on BLM lands is 10,845,345 AUMs (BLM 2000). Estimated forage allocated to grazing on the national forests and grasslands is 8,902,576 AUMs (USDA-Forest Service 1999). Livestock grazing also occurs on some national parks and wildlife refuges. A reasonable and generous estimate of the West-wide average fair market value per AUM is $75 (Kerr 1998). For approximately $1.5 billion, livestock grazing on all public lands can end. The major source of funding for permit retirement would have to be the federal government. Disregarding the diminution of recreation conflicts and the benefits to biodiversity and watershed protection that such a mass permit retirement would engender, it is also an attractive investment for taxpayers. Current federal subsidies for public lands ranchers total about 25 percent of this amount (or $400,000,000) annually (Kerr 1998).

Steering Clear of Potential Pitfalls in Permit Retirement

One fear of permit retirement is that a federal program would create a new, unintended property right in grazing permits. A few conservationists are concerned that the instant the federal government pays any public land livestock operator for their financial interest in a grazing permit, a new compensatory right will be established in all other permit holders. Such a right, it is feared, could require the government to reimburse ranchers every time the government reduces or eliminates their grazing privileges.

Such a fear is unfounded. Since World War II, federal law has mandated that permittees be compensated when their grazing privileges are reduced or eliminated for military purposes without creating new property rights in grazing permits. Appended to the Taylor Grazing Act in 1948, the “savings clause” in the following provision protects the government from any extraneous claims of permit-property rights:

Whenever use for war or national defense purposes of the public domain or other property owned by or under the control of the United States prevents its use for grazing, persons holding grazing permits or licenses and persons whose grazing permits or licenses have been or will be canceled because of such use shall be paid out of the funds appropriated or allocated for such project such amounts as the head of the department or agency so using the lands shall determine to be fair and reasonable for the losses suffered by such persons as a result of the use of such lands for war or national defense purposes. Such payments shall be deemed payment in full for such losses. Nothing contained in this section shall be construed to create any liability not now existing against the United States (43 U.S.C. ¤ 315q).

Is natural security any less important than national security (especially in light of $300 billion Department of Defense appropriations)? In a variety of different contexts, the Supreme Court has stated that the provision of a government benefit does not create a property right in potential recipients when Congress has explicitly excluded that interpretation in the authorizing legislation (Brown v. Public Agencies). Congress need only include a similar savings clause in legislation authorizing a federal grazing permit retirement program to avoid wildcat claims to grazing permit property rights.

Federal Grazing Permit Retirement Legislation

The following legislation is proposed to make voluntary federal permit retirement a national conservation priority:

(a) General. A permittee or leasee may relinquish a valid existing grazing permit or lease authorizing livestock grazing on federal public land to the Secretary of Agriculture or Interior.

(b) Termination. The Secretary of Agriculture or Interior shall retire grazing permits or leases acquired under subparagraph (a) and terminate livestock grazing on the associated allotments permanently.

(c) A permittee who relinquishes their permit or lease to the Secretary of Agriculture or Interior under subparagraph (a) shall no longer be liable for paying grazing fees under that permit or lease and shall be compensated at fair market value for the grazing permit or lease as appraised by the Secretary of Agriculture or Interior.

(d) Nothing in this section shall be deemed to affect the federal government's authority to otherwise modify or terminate grazing permits or leases. Compensation disbursed pursuant to this section shall not create a property right in grazing permitees or leasees.

Coming to Grips with Permit Retirement

Some conservationists are wary of permit retirement. They have these objections to compensating grazing permittees to end public lands grazing:

Public lands grazing is a privilege, not a right. The federal government can withdraw it anytime—why pay for permits?
Permit retirement establishes a market value for permits, a dangerous precedent for public lands grazing management.
Taxpayers should not have to pay permittees not to damage the public lands.
It is morally repugnant to reward resource abuse on public lands by paying for permits.

These are valid criticisms, worthy of thoughtful consideration. The authors offer the following response:

While the federal land management agencies can reduce or eliminate grazing—and, in fact, are under a legal obligation to do so in case of ecosystem damage—they very rarely do. Where agencies have withdrawn grazing privileges, it is usually due to expensive litigation by conservation groups, a permittee who refuses to pay his grazing fee (usually the permit is simply reissued to another rancher), or where the agency manager knows that the bottom line of the permittee will not be harmed by the decision (coincidental compensation by a third party for permit retirement). In some cases, land managers have proposed reductions for ecological reasons, but have had their plans nixed by agency directors under Congressional pressure.
Permit retirement will not establish market value in grazing permits; they already carry a market value, as recognized by the government (BLM, Forest Service 1995), the real estate market (Fowler and Gray 1980), a plethora of economists (Winter and Whittaker 1981), and even the Internal Revenue Service (Torell and Doll 1991). Permit retirement merely recognizes market value for the sole purpose of removing livestock from public lands.
Taxpayers are already paying permittees, through subsidized grazing fees and other assistance programs, to degrade the public lands. Consider the retirement payments as hush money to the permittee not to complain on his way out the door. Moreover, it's just money. Is it more important to preserve the federal public lands or the federal treasury? Choosing is not necessary in this case, because permit retirement does both most effectively.
To conserve and restore the Earth, sometimes one has to rise above principle. An excessive adherence to principled opposition to an injustice often interferes with ending the injustice.

Mark Salvo is Grasslands Advocate for American Lands, an organization committed to removing domestic livestock from inappropriate public lands as quickly and efficiently as possible.

Andy Kerr of The Larch Company feels there is no limit to the good that can be done with other peoples' money. He agitates for livestock-free public lands and writes from Oregon's Rogue Valley.

References

16 U.S.C. ¤ 272b(b).

16 U.S.C. ¤ 410mm-1(f)(2).

43 U.S.C. ¤ 315q.

Bowen v. Public Agencies Opposed to Social Security Entrapment, 477 U.S. 41 (1986), citing Nat'l Rail Passenger Corp. v. Atchison, 477 U.S. 41 (1985) and Sinking Fund Cases, 99 U.S. 700 (1879).

Bureau of Land Management. 2000. Public Land Statistics 1999. Vol. 184. BLM/BC/ST-00/001+1165. Available from http://www.blm.gov/natacq/pls99/Pls99home.html.

Bureau of Land Management, USDA-Forest Service. 1995. Rangeland Reform ` 94 Final Environmental Impact Statement. Washington, DC.

Fowler, J. M. and J. R. Gray. 1980. Market values of federal grazing permits in New Mexico. New Mexico State Univ., Coop. Ext. Serv., Range Improvement Task Force. Las Cruces, NM. 23 pages.

Kerr, A. 1998. The voluntary retirement option for federal public lands grazing permittees. Rangelands 20(5): 26-29.

Torell, L. A. and J. P. Doll. 1991. Public land policy and the value of grazing permits. West. J. Agric. Econ. 16(1): 174-184.

Utah State Office, Bureau of Land Management. 1999. Escalante Management Framework Plan Approved Amendment and Decision Record. UT-048-98-043. Salt Lake City, UT.

USDA-Forest Service. 1999. Grazing Statistical Summary FY 1998. USDA-Forest Service, Range Management. Washington, DC.

Winter, J. R. and J. K. Whittaker. 1981. The relationship between private ranchland prices and public-land grazing permits. Land Economics 57(3): 414-421.