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Grazing Fees: Overview and Current Issues
Carol Hardy Vincent
Specialist in Natural Resources Policy
September 4, 2009
Congressional Research Service
7-5700
www.crs.gov
RS21232
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008
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Grazing Fees: An Overview and Current Issues
Summary
Charging fees for grazing private livestock on federal lands is a long-standing but contentious
practice. Generally, livestock producers who use federal lands want to keep fees low, while
conservation groups and others believe fees should be increased. The formula for determining the
grazing fee for lands managed by the Bureau of Land Management and the Forest Service uses a
base value adjusted annually by the lease rates for grazing on private lands, beef cattle prices, and
the cost of livestock production. The collected fees are divided among the Treasury, states, and
federal agencies. Fee reform was attempted but not adopted in the 1990s. Current issues include
instances of grazing without paying fees and efforts to retire certain grazing permits. This report
will be updated as needed.
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Grazing Fees: An Overview and Current Issues
Contents
Introduction ................................................................................................................................ 1
Current Grazing Fee Formula and Distribution of Receipts.......................................................... 2
The Fee Formula ................................................................................................................... 2
Distribution of Receipts ........................................................................................................ 3
Fee Evaluation and Reform Attempts .......................................................................................... 4
Current Issues and Legislation..................................................................................................... 5
Figures
Figure 1. Distribution of Forest Service Grazing Fees.................................................................. 3
Figure 2. Distribution of BLM Grazing Fees: Section 3 ............................................................... 4
Figure 3. Distribution of BLM Grazing Fees: Section 15 ............................................................. 4
Tables
Table 1. Grazing Fees from 1981 to 2009 (dollars per AUM)....................................................... 3
Contacts
Author Contact Information ........................................................................................................ 6
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Grazing Fees: An Overview and Current Issues
Introduction
Charging fees for grazing private livestock on federal lands is statutorily authorized and has been
the policy of the Forest Service (FS, Department of Agriculture) since 1906, and of the Bureau of
Land Management (BLM, Department of the Interior) since 1936. Today, fees are charged for
grazing on approximately 160 million acres of BLM land and 81 million acres of FS land
basically under a fee formula established in the Public Rangelands Improvement Act of 1978
(PRIA) and continued administratively.1
On BLM rangelands, in FY2008, there were 15,682 operators authorized to graze livestock, and
they held 17,812 grazing permits and leases. Under these permits and leases, a maximum of
12,526,006 animal unit months (AUMs) of grazing could have been authorized for use. Instead,
8,592,419 AUMs were used.2 The remainder were not used due to resource protection needs,
forage depletion caused by drought or fire, and economic and other factors. BLM defines an
AUM, for fee purposes, as a month’s use and occupancy of the range by one animal unit, which
includes one yearling, one cow and her calf, one horse, or 5 sheep or goats. On FS rangelands, in
FY2008, there were 6,289 livestock operators authorized to graze commercial livestock. A
maximum of 8,505,933 head-months (HD-MOs) of grazing were under permit; 6,796,581 HD-
MOs were authorized to graze.3 There were more than 8,000 grazing permits on FS lands as of
February 2008. The FS uses HD-MO as its unit of measurement for use and occupancy of FS
lands, similar to AUM. Hereafter AUM is used to cover both HD-MO and AUM.
The BLM and FS are charging a grazing fee of $1.35 per AUM from March 1, 2009, through
February 28, 2010. This is the lowest fee that can be charged. It is generally lower than fees
charged for grazing on other federal lands as well as on state and private lands. A study by the
Government Accountability Office (GAO) found that other federal agencies charged $0.29 to
$112.50 per AUM in FY2004. While the BLM and FS use a formula to set the grazing fee (see
“The Fee Formula” below), most agencies charge a fee based on competitive methods or a market
price for forage. Some seek to recover the costs of their grazing programs. State and private
landowners generally seek market value for grazing, with state fees ranging from $1.35 to $80 per
AUM and private fees from $8 to $23 per AUM.4 The average monthly lease rate for grazing on
private lands in 11 western states in 2007 was $15.60 per head.5
1 P.L. 95-514, 92 Stat. 1803; 43 U.S.C. §§1901, 1905. Executive Order 12548, 51 Fed. Reg. 5985 (February 19, 1986).
These authorities govern grazing on BLM and FS lands in 16 contiguous western states, which is the focus of this
report. Forest Service grasslands and “nonwestern” states have different fees. In addition, grazing occurs on other
federal lands, not required to be governed by PRIA fees, including areas managed by the National Park Service, Fish
and Wildlife Service, Dept. of Defense, and Dept. of Energy.
2 These statistics were taken from U.S. Dept. of the Interior, Bureau of Land Management, Public Land Statistics,
2008, Table 3-8c and Table 3-9c, available on the BLM website at http://www.blm.gov/public_land_statistics/
index.htm.
3 These statistics were taken from U.S. Dept. of Agriculture, Forest Service Range Management, Grazing Statistical
Summary, FY2008, March 2009, p. 4, available on the FS website at http://www.fs.fed.us/rangelands/ftp/docs/
grazing_stat_summary_2008.pdf.
4 U.S. Government Accountability Office, Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on
the Agency and the Purpose of the Fee Charged, GAO-05-869 (Washington, DC: September 2005), p. 37-40.
5 These statistics were taken from U.S. Dept. of Agriculture, National Agricultural Statistics Service, Agricultural
Statistics 2008, Table 9-48, at http://www.nass.usda.gov/Publications/Ag_Statistics/2008/Chap09.pdf.
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Grazing Fees: An Overview and Current Issues
BLM and the FS typically spend far more managing their grazing programs than they collect in
grazing fees. For example, the GAO determined that in FY2004, the agencies spent about $132.5
million on grazing management, comprised of $58.3 million for the BLM and $74.2 million for
the FS. These figures include expenditures for direct costs, such as managing permits, as well as
indirect costs, such as personnel. The agencies collected $17.5 million, comprised of $11.8
million in BLM receipts and $5.7 million in FS receipts.6 Further, for FY2008 BLM has
estimated expenditures for the direct costs only of grazing management at $39.2 million, while
receipts were $10.0 million.7 Receipts for both agencies have been relatively low in recent years,
apparently because western drought has contributed to reduced livestock grazing and the grazing
fee was set at the minimum level for 2007-2009.
Other estimates of the cost of livestock grazing on federal lands are much higher. For instance, a
2002 study by the Center for Biological Diversity estimated the federal cost of an array of BLM,
FS, and other agency programs that benefit grazing or compensate for impacts of grazing at
roughly $500 million annually. Together with the nonfederal cost, the total cost of livestock
grazing could be as high as $1 billion annually, according to the study.8
Grazing fees have been contentious since their introduction. Generally, livestock producers who
use federal lands want to keep fees low. They assert that federal fees are not comparable to fees
for leasing private rangelands, because public lands often are less productive; must be shared with
other public users; and often lack water, fencing, or other amenities thereby increasing operating
costs. They fear that fee increases may force many small and medium-sized ranchers out of
business. Conservation groups generally assert that low fees contribute to overgrazing and
deteriorated range conditions. Critics assert that low fees subsidize ranchers and contribute to
budget shortfalls because federal fees are lower than private grazing land lease rates and do not
cover the costs of range management. They further contend that, because part of the collected fees
is used for range improvements, higher fees could enhance the productive potential and
environmental quality of federal rangelands.
Current Grazing Fee Formula and Distribution of
Receipts
The Fee Formula
The fee charged by the FS and BLM is based on the grazing on federal rangelands of a specified
number of animals for one month. PRIA establishes a policy of charging a grazing fee that is
“equitable” and prevents economic disruption and harm to the western livestock industry. The law
requires the Secretaries of Agriculture and the Interior to set a fee annually that is the estimated
economic value of grazing to the livestock owner. The fee is to represent the fair market value of
grazing, beginning with a 1966 base value of $1.23 per AUM. This value is adjusted for three
6 GAO-05-869, p. 21-22 and p. 30-31.
7 This information was provided by the BLM Office of Legislative Affairs, in personal correspondence to the
Congressional Research Service on August 14, 2009. Comparable information for the FS is not readily available.
8 A copy of the report, Assessing the Full Cost of the Federal Grazing Program, is available at
http://www.biologicaldiversity.org/swcbd/Programs/grazing/Assessing_the_full_cost.pdf.
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Grazing Fees: An Overview and Current Issues
factors based on costs in western states of (1) the rental charge for pasturing cattle on private
rangelands, (2) the sales price of beef cattle, and (3) the cost of livestock production. Congress
also established that the annual fee adjustment could not exceed 25% of the previous year’s fee.
PRIA required a seven-year trial (1979-1985) of the formula while the FS and BLM undertook a
study to help Congress determine a permanent fee or fee formula. President Reagan issued
Executive Order 12548 (February 14, 1986) to continue indefinitely the PRIA fee formula, and
established the minimum fee of $1.35 per AUM. Without that requirement, the 2008 fee would
have been below one dollar, due to a decrease in beef cattle prices and an increase in production
costs, according to the BLM and the FS. The annual grazing fees since 1981, when the FS and
BLM began charging the same fee, are shown in Table 1. The fee has ranged from $1.35 to
$2.31.
Table 1. Grazing Fees from 1981 to 2009 (dollars per AUM)
1981.....................$2.31 1991.....................$1.97 2001.....................$1.35
1982.....................$1.86 1992.....................$1.92 2002.....................$1.43
1983.....................$1.40 1993.....................$1.86 2003.....................$1.35
1984.....................$1.37 1994.....................$1.98 2004.....................$1.43
1985.....................$1.35 1995.....................$1.61 2005.....................$1.79
1986.....................$1.35 1996.....................$1.35 2006.....................$1.56
1987.....................$1.35 1997.....................$1.35 2007.....................$1.35
1988.....................$1.54 1998.....................$1.35 2008.....................$1.35
1989.....................$1.86 1999.....................$1.35 2009.....................$1.35
1990.....................$1.81 2000.....................$1.35
Distribution of Receipts
Fifty percent of all fees collected, or $10
Figure 1. Distribution of Forest Service
million—whichever is greater—go to a range
Grazing Fees
betterment fund in the Treasury. The fund is
used for range rehabilitation, protection, and
improvement including grass seeding and
reseeding, fence construction, weed control,
U.S. Treasury
25%
water development, and fish and wildlife
habitat. Under law, one-half of the fund is to
be used as directed by the Secretary of the
RBF*
50%
Interior or of Agriculture, and the other half is
authorized to be spent in the district, region,
States
or forest that generated the fees, as the
25%
Secretary determines after consultation with
*Range Betterment Fund
user representatives.9 Agency regulations
contain additional detail. For example, BLM
regulations provide that half of the fund is to
9 43 U.S.C. §1751(b)(1). For the FS, see 36 C.F.R. §222.10. For the BLM, see 43 C.F.R. §4120.3-8.
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Grazing Fees: An Overview and Current Issues
be allocated by the Secretary on a priority basis, and the rest is to be spent in the state and district
where derived. Forest Service regulations provide that half of the monies are to be used in the
national forest where derived, and the rest in the FS region where the forest is located. In general,
the FS returns all range betterment funds to the forest that generated them.
The agencies allocate the remaining 50% of the collections differently. For the FS, 25% of the
funds are deposited in the Treasury and 25% are given to the states (16 U.S.C. §500; see Figure
1). For the BLM, states receive 12.5% of monies collected from lands defined in §3 of the Taylor
Grazing Act10 and 37.5% is deposited in the Treasury. Section 3 lands are those within grazing
districts for which the BLM issues grazing permits. (See Figure 2) By contrast, states receive
50% of fees collected from BLM lands defined in §15 of the Taylor Grazing Act. Section 15 lands
are those outside grazing districts for which the BLM leases grazing allotments. (See Figure 3)
For both agencies, any state share is to be used to benefit the counties that generated the receipts.
Figure 2. Distribution of BLM Grazing
Figure 3. Distribution of BLM Grazing
Fees: Section 3
Fees: Section 15
U.S. Treasury
37.5%
RBF*
States
RBF*
50.0%
50%
50%
States
12.5%
*Range Betterment Fund
*Range Betterment Fund
Fee Evaluation and Reform Attempts
PRIA directed the Interior and Agriculture Secretaries to report to Congress, by December 31,
1985, on the results of their evaluation of the fee formula and other grazing fee options and their
recommendations for implementing a permanent grazing fee. The Secretaries’ report included (1)
a discussion of livestock production in the western United States; (2) an estimate of each agency’s
cost for implementing its grazing programs; (3) estimates of the market value for public
rangeland grazing; (4) potential modifications to the PRIA formula; (5) alternative fee systems;
and (6) economic effects of the fee system options on permittees.11 A 1992 revision of the report
updated the appraised fair market value of grazing on federal rangelands, determined the costs of
range management programs, and recalculated the PRIA base value through the application of
economic indices. The study results, criticized by some as using faulty evaluation methods, were
not adopted and the report has not been updated since.
10 Act of June 28, 1934; ch. 865, 48 Stat. 1269. 43 U.S.C. §§315, 315i.
11 U.S. Dept. of Agriculture, Forest Service, and U.S. Dept. of the Interior, Bureau of Land Management, Grazing Fee
Review and Evaluation, A Report from the Secretary of Agriculture and the Secretary of the Interior (Washington, DC:
February 1986).
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Grazing Fees: An Overview and Current Issues
President Clinton proposed, and Congress considered, grazing fee reform in the 1990s, but no
reforms were adopted. In 1993, the Clinton Administration proposed an administrative increase in
the fee, and revisions of other grazing policies. The proposed fee formula started with a base
value of $3.96 per AUM, and was to be adjusted to reflect annual changes in private land lease
rates in the West (called the Forage Value Index). The current PRIA formula is adjusted using
multiple indices, a practice that some criticize as double-counting ability-to-pay factors.
Congressional objections forestalled an administrative increase, and new rules for BLM
rangeland management that took effect on August 21, 1995 did not increase fees.
No grazing fee bills have passed either chamber for several years. In the 104th Congress, the
Senate passed a bill to establish a new grazing fee formula and alter rangeland regulations. The
formula was to be derived from the three-year average of the total gross value of production for
beef and no longer indexed to operating costs and private land lease rates, as under PRIA. By one
estimate, the measure would have resulted in an increase of about $0.50 per AUM. In the 105th
Congress, the House passed a bill with a fee formula based on a 12-year average of beef cattle
production costs and revenues. The formula would have resulted in a 1997 fee of about $1.84 per
AUM.
Current Issues and Legislation
There is ongoing debate about the appropriate grazing fee, with several key areas of contention.
First, there are differences over which criteria should prevail in setting fees: fair market value;
cost recovery (whereby the monies collected would cover the government’s cost of running the
program); sustaining ranching, or resource-based rural economies generally; or diversification of
local economies. Second, there is disagreement over the validity of fair market value estimates for
federal grazing because federal and private lands for leasing are not always directly comparable.
Third, whether to have a uniform fee, or varied fees based on biological and economic conditions,
is an area of debate. Fourth, there are diverse views on the environmental costs and benefits of
grazing on federal lands and on the environmental impact of changes in grazing levels. Fifth, it is
uncertain whether fee increases would reduce the number of cattle grazing on sensitive lands,
such as riparian areas. Sixth, some environmentalists assert that the fee is not the main issue, but
that all livestock grazing should be barred to protect federal lands.
A handful of livestock owners in some western states have grazed cattle on federal land without
getting a permit or paying the required fee. The BLM and FS have responded at times by fining
and jailing the owners as well as impounding and selling the trespassing cattle. The livestock
owners claim they do not need to have permits or pay grazing fees because the land is owned by
the public; or that other rights, such as state water rights, extend to the accompanying forage; or
the BLM improperly allowed wild horses and burros to graze the land. A particularly long-
running controversy involved grazing without permits by Western Shoshone Indians on land in
Nevada they asserted belongs to the tribe under a treaty, but which the federal government
manages as public land.
There have been efforts to end livestock grazing on certain federal lands through voluntary
retirement of permits and leases and subsequent closure of the allotments to grazing. This practice
is opposed by those who support ranching on the affected lands, fear a widespread effort to
eliminate ranching as a way of life, or question the legality of the process. Supporters seek to
have ranchers relinquish their permits to the government in exchange for compensation by third
parties, particularly environmental groups. After acquiring the permits through transfer, the
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Grazing Fees: An Overview and Current Issues
groups advocate agency amendments to land use plans to devote the grazing lands to other
purposes, such as watershed conservation. These groups would not pay grazing fees under their
permits if they opt not to graze during the amendment process, because fees are paid for actual
grazing.
In recent Congresses, legislation has been introduced to buy out grazing permittees (or lessees) on
federal lands generally or on particular allotments. Such legislation provided that permittees who
voluntarily relinquished their permits would be compensated at a certain dollar value per AUM,
generally significantly higher than the market rate. The allotments would have been permanently
closed to grazing. Such legislation, which had been backed by the National Public Lands Grazing
Campaign, was advocated to enhance resource protection, resolve conflicts between grazing and
other land uses, provide economic options to permittees, and save money. According to
proponents, while a buyout program would be costly if all permits were relinquished, it would
save more than the cost over time. Opponents of buyout legislation include those who support
grazing, others who fear the creation of a compensable property right in grazing permits, some
who contend that it would be too costly, or still others who support different types of grazing
reform.
Bills enacted and pending in the 111th Congress seek to end grazing on particular allotments
through voluntary donations of the permits by the permit holders. Under these measures, the
Secretary is to accept the donation of a grazing permit, terminate the permit, and end grazing on
the land covered by the permit. Such provisions were enacted in P.L. 111-11, the Omnibus Public
Land Management Act of 2009, for certain lands in the Cascade-Siskiyou National Monument in
Oregon and in wilderness areas in Idaho. They also are included in pending measures, for
instance, H.R. 192, the Central Idaho National Forest and Public Land Management Act, and
H.R. 2889 and S. 1270, the Oregon Caves National Monument Boundary Adjustment Act of
2009.
Author Contact Information
Carol Hardy Vincent
Specialist in Natural Resources Policy
chvincent@crs.loc.gov, 7-8651
Congressional Research Service
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