Click here to get a breakdown of the grazing fees debate.
* * *
An old, dusty backroom brawl over federal grazing land has spilled onto main street Nebraska.
The little-known and less understood government policy that allows ranchers to graze cattle on public rangeland for a modest fee has surfaced like a noxious weed in the Deb Fischer-Bob Kerrey U.S. Senate race.
Nebraska has only a sliver of the nation's federal grazing land, and Fischer — the Republican candidate and a state senator — leases some of it for her family's Cherry County cattle operation.
“Welfare rancher'' is how supporters of Democrat Kerrey describe Fischer — who portrays herself as a fiscal conservative.
Fischer has been criticized for her family's below-market monthly lease rate of $1.35 per cow-calf pair.
The federal government's approach to leasing land stands in sharp contrast with Nebraska's.
Cattlemen who lease grazing land from the Nebraska Game and Parks Commission or the Nebraska Board of Educational Lands & Funds pay more. The rates are set at public auction or are based on what private landowners charge.
“Theoretically, there are no sweet deals because it's an auction,” said Richard Endacott, chief executive of the State School Lands Board. “We're confident that we're getting the maximum amount for the lease.''
Fischer has defended the federal program, saying ranchers don't have a say in determining the fee and help the government manage federal land. She and her husband, Bruce, hold rights to graze 11,724 acres in McKelvie National Forest, a grassland adjacent to their ranch southwest of Valentine.
The Fischers pay about $4,700 to graze cattle for seven months, which is at least $110,000 less than the market rate to lease private land.
Ranchers who graze livestock on federal land across the West have been circling the wagons for several decades. They've faced attacks by environmentalists, bureaucrats and others who say the federal administration of public rangeland benefits only a few, no longer serves a purpose — and is underpriced.
Contact the writer:
The big picture
The federal government owns nearly 30 percent of the land area of the United States, most of it in the West. Examples of federal ownership by state:
Nevada — 81 percent
Utah — 63 percent
Idaho — 61 percent
Wyoming — 48 percent
Nebraska — 1.1 percent
Who manages it
Most federal land in the West is under the jurisdiction of the U.S. Forest Service or Bureau of Land Management and is used for livestock grazing.
The Bureau of Land Management administers nearly 18,000 permits and leases held by ranchers across 157 million acres.
The Forest Service handles more than 8,000 permits.
Nebraska's 352,738 acres represent only a tiny percentage of the nation's federal land. Most in Nebraska is grazed under permit. Nearly all of it is in the McKelvie and Nebraska National Forests and Oglala National Grassland and is managed by the Forest Service.
The Bureau of Land Management has 1,511 acres in nine counties scattered across the northern tier of the state and in the Sand Hills. Its parcels are small, ranging from 40 to 240 acres.
How it started
As settlers moved west during the 1800s, farmers claimed the most productive land — sites with water and good soil for crops. In semiarid western Nebraska and the arid West, farmers turned out their livestock to graze on unclaimed land to supplement their feed for free.
Enter the feds
In the early 1900s, the federal government started to control grazing on public land to curtail abusive use. The Forest Service first assessed fees in 1906. The Bureau of Land Management started in 1936.
First in line
Permits went to those who had previously been grazing on land put under federal jurisdiction and to those who owned land in the area.
The original permits to graze on federal land were issued at no cost, and grazing fees were set at levels below market value. Why? To compensate for the new government intrusion and to encourage private investment on rangeland.
Access to federal land was an important part of many producers' grazing requirements and became an important ingredient to successful ranching in the West. Cattle typically graze on federal land in the spring and summer, then return to private pasture.
Permits and leases — which add to the value of a ranch — generally cover a 10-year period and are renewable.
The federal view
Grazing on federal land provides economic opportunities in rural communities and contributes to the West's social fabric and identity. Public lands and private ranches maintain open spaces, support healthy watersheds and wildlife habitat, and help preserve the character of the rural West.
Federal land is open — usually at no cost — to recreation, such as hunting, bird-watching, nature viewing, hiking, fishing, horse riding, scenic driving and other activities.
For example, McKelvie National Forest features hunting for mule deer, white-tailed deer, pronghorn antelope, sharp-tailed grouse and greater prairie chicken.
Bought and paid for
Nearly all grazing permits held by ranchers today have been “purchased'' from a prior owner as part of buying a ranch or livestock. Therefore, most ranchers feel they have paid for the right to use federal land and are not receiving a subsidy from the government. They say the windfall fell to the previous holder of the permit and not the current holder.
Permits have no recognized monetary value. When the holder of a Forest Service grazing permit sells a ranch or livestock, the holder waives the permit to the agency. The Forest Service then determines whether the new owner qualifies to hold the permit.
“It's a privilege, not a right,'' said Mark Lane, a Forest Service range manager in Chadron, Neb. “It's not a contract, but the fact is that when someone sells ... there's usually significant value recognized by holding a grazing permit on public land.”
Fischers' grazing permit
The Fischers are among the few Nebraskans — only 136 of the state's 20,000 beef producers — to hold a federal grazing permit. Bruce Fischer's family acquired the permit in 1959, more than a decade before Deb married into the family.
Livestock producers pay $1.35 — the same level as in 2011, and the minimum permitted — per cow and calf per month. A study in 2003 suggested adjusting the fee annually based on the private grazing lease rate. That change would have resulted in a 2011 fee of $5.42.
How it compares
Two Nebraska agencies set their fees based on market rates or at public auction.
The Nebraska Board of Educational Lands & Funds manages about 1.3 million acres, nearly all of it for grazing. Rental rates are set based on a sophisticated method that compares soil types and comparable cash rents in the private market. The board sets a minimum price, and the parcel goes to public auction.
The Nebraska Game and Parks Commission has 15,463 acres in wildlife management areas under grazing lease this year. The average lease rate — based on local private grazing fees — is $22.97 per cow-calf unit.
Setting the federal fee
The federal grazing fee is reviewed annually and determined by a formula that factors in the current private lease rate, beef cattle prices and the cost of livestock production.
The fee rises, falls or stays the same based on market conditions. Livestock producers pay more when conditions are better and less when conditions have declined.
During President Bill Clinton's first term, the administration failed in an attempt to triple the grazing fee to nearly $4 per month per animal. The Obama administration has rejected attempts to address the grazing fee formula but this year proposed an additional $1 fee in the 2013 budget.
Change isn't easy
Some say the federal grazing fee is more complex than directly comparing it with average private fees. Increasing the federal fee would theoretically reallocate some portion of the permit value to the federal government. Ranchers challenge the fairness of paying higher grazing fees and potentially seeing the value of the ranch decline.
What Fischer says
Deb Fischer defends the grazing program, saying ranchers don't have a say in determining the fee but do help the government manage federal land. She says the family is told exactly how many cattle are allowed on the land and is required to maintain fences and wells.
Nonetheless, she says one way to end criticism that the program is a taxpayer giveaway is to sell large chunks of public land. She said the sale could help offset the nation's budget deficit.
What Kerrey says
Bob Kerrey, a former governor and U.S. senator, says the solution is to raise grazing fees, not sell public land.
What others say
The Nebraska Wildlife Federation and other critics want to see federal grazing fees put up for auction or otherwise adjusted nearer to market value.
“It really is a sweetheart deal to those who have them,'' said Duane Hovorka, executive director of the Nebraska Wildlife Federation. “To think about selling those lands would be a huge shame because we have very little public land in this state, and it's a great resource.''
Others favor removing all cattle and managing the land solely for native wildlife and the broader public. Democratic U.S. Sen. Ben Nelson of Nebraska joined the fees fray earlier this summer by introducing a bill to cut the program.
End of the trail
The $1.35 lease rate is not the market value of the grass required to maintain a cow and calf per month, especially in Nebraska, according to a recent study by Larry Van Tassell, an agricultural economist at the University of Nebraska-Lincoln.
The true value of grazing federal lands is somewhere between the fee paid for government land and the cost of private leases, Van Tassell wrote in Cornhusker Economics.
A 2005 federal report found that the government collected $21 million in grazing fees for land that cost about $144 million a year to manage.
Sources: University of Nebraska-Lincoln Extension Service; U.S. Forest Service; U.S. Bureau of Land Management; Nebraska Board of Educational Lands & Funds; Nebraska Game and Parks Commission; Nebraska Wildlife Federation; Sierra Club