Livestock Grazing
Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose of the Fee Charged Gao ID: GAO-05-869 September 30, 2005Ranchers pay a fee to graze their livestock on federal land. Grazing occurs primarily on federal land located in the western states managed by 10 federal agencies. Generally, the fee is based on animal unit months (AUM)--the amount of forage that a cow and her calf can eat in 1 month. For most federal land, the fee per AUM is established by a formula. Advocates argue that grazing uses federal land productively and that the grazing fee is fair. Opponents argue that grazing damages public resources and that grazing fees are too low. GAO was asked to determine the (1) extent of, and purposes for, grazing in fiscal year 2004 on lands 10 federal agencies manage; (2) amount federal agencies spent in fiscal year 2004 to manage grazing; (3) total grazing receipts the 10 agencies collected in fiscal year 2004 and amounts disbursed; and (4) fees charged in 2004 by the 10 agencies, western states, and ranchers, and reasons for any differences. In commenting on a draft of this report, the Department of the Interior and the Forest Service neither agreed nor disagreed with the findings. The Forest Service stated that the report accurately described the purpose of the grazing fee. The Army and Air Force and the Department of Energy provided technical comments, which we incorporated as appropriate. The departments of Commerce and of Justice responded that they did not have comments.
The 10 federal agencies managed more than 22.6 million AUMs on about 235 million acres of federal lands for grazing and land management in fiscal year 2004. Of this total, the Department of the Interior's Bureau of Land Management (BLM) and the U.S. Department of Agriculture's Forest Service managed more than 98 percent of the lands used for grazing. The agencies manage their grazing programs under different authorities and for different purposes. For BLM lands and western Forest Service lands, grazing is a major program; the eight other agencies generally use grazing as a tool to achieve their primary land management goals. In fiscal year 2004, federal agencies spent a total of at least $144 million. The 10 federal agencies spent at least $135.9 million, with the Forest Service and BLM accounting for the majority. Other federal agencies have grazing-related activities, such as pest control, and spent at least $8.4 million in fiscal year 2004. The 10 federal agencies' grazing fees generated about $21 million in fiscal year 2004--less than one-sixth of the expenditures to manage grazing. Of that amount, the agencies distributed about $5.7 million to states and counties in which grazing occurred, returned about $3.8 million to the Treasury, and deposited at least $11.7 million in separate Treasury accounts to help pay for agency programs, among other things. The amounts each agency distributed varied, depending on the agencies' differing authorities. Fees charged in 2004 by the 10 federal agencies, as well as state land agencies and private ranchers, vary widely. The grazing fee BLM and the Forest Service charge, which was $1.43 per AUM in 2004, is established by formula and is generally much lower than the fees charged by the other federal agencies, states, and private ranchers. The other agencies, states, and ranchers generally established fees to obtain the market value of the forage. The formula used to calculate the BLM and Forest Service grazing fee incorporates ranchers' ability to pay; therefore the current purpose of the fee is not primarily to recover the agencies' expenditures or to capture the fair market value of forage. As a result, BLM's and the Forest Service's grazing receipts fell short of their expenditures on grazing in fiscal year 2004 by almost $115 million. The BLM and Forest Service fee also decreased by 40 percent from 1980 to 2004, while grazing fees charged by private ranchers increased by 78 percent for the same period. If the purpose of the fee were to recover expenditures, BLM and the Forest Service would have had to charge $7.64 and $12.26 per AUM, respectively; alternately, if the purpose were to gain a fair market value, the agencies' fees would vary depending on the market. Differences in resources and legal requirements can cause fees to vary; however, the approaches used by other agencies could close the gap in expenditures and receipts or more closely align BLM and Forest Service fees with market prices. The purpose of the grazing fee is, ultimately, for the Congress to determine.
GAO-05-869, Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose of the Fee Charged
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Report to Congressional Requesters:
September 2005:
Livestock Grazing:
Federal Expenditures and Receipts Vary, Depending on the Agency and the
Purpose of the Fee Charged:
GAO-05-869:
GAO Highlights:
Highlights of GAO-05-869, a report to congressional requesters:
Why GAO Did This Study:
Ranchers pay a fee to graze their livestock on federal land. Grazing
occurs primarily on federal land located in the western states managed
by 10 federal agencies. Generally, the fee is based on animal unit
months (AUM)”the amount of forage that a cow and her calf can eat in 1
month. For most federal land, the fee per AUM is established by a
formula. Advocates argue that grazing uses federal land productively
and that the grazing fee is fair. Opponents argue that grazing damages
public resources and that grazing fees are too low. GAO was asked to
determine the (1) extent of, and purposes for, grazing in fiscal year
2004 on lands 10 federal agencies manage; (2) amount federal agencies
spent in fiscal year 2004 to manage grazing; (3) total grazing receipts
the 10 agencies collected in fiscal year 2004 and amounts disbursed;
and (4) fees charged in 2004 by the 10 agencies, western states, and
ranchers, and reasons for any differences.
In commenting on a draft of this report, the Department of the Interior
and the Forest Service neither agreed nor disagreed with the findings.
The Forest Service stated that the report accurately described the
purpose of the grazing fee. The Army and Air Force and the Department
of Energy provided technical comments, which we incorporated as
appropriate. The departments of Commerce and of Justice responded that
they did not have comments.
What GAO Found:
The 10 federal agencies managed more than 22.6 million AUMs on about
235 million acres of federal lands for grazing and land management in
fiscal year 2004. Of this total, the Department of the Interior‘s
Bureau of Land Management (BLM) and the U.S. Department of
Agriculture‘s Forest Service managed more than 98 percent of the lands
used for grazing. The agencies manage their grazing programs under
different authorities and for different purposes. For BLM lands and
western Forest Service lands, grazing is a major program; the eight
other agencies generally use grazing as a tool to achieve their primary
land management goals.
In fiscal year 2004, federal agencies spent a total of at least $144
million. The 10 federal agencies spent at least $135.9 million, with
the Forest Service and BLM accounting for the majority. Other federal
agencies have grazing-related activities, such as pest control, and
spent at least $8.4 million in fiscal year 2004.
The 10 federal agencies‘ grazing fees generated about $21 million in
fiscal year 2004”less than one-sixth of the expenditures to manage
grazing. Of that amount, the agencies distributed about $5.7 million to
states and counties in which grazing occurred, returned about $3.8
million to the Treasury, and deposited at least $11.7 million in
separate Treasury accounts to help pay for agency programs, among other
things. The amounts each agency distributed varied, depending on the
agencies‘ differing authorities.
Fees charged in 2004 by the 10 federal agencies, as well as state land
agencies and private ranchers, vary widely. The grazing fee BLM and the
Forest Service charge, which was $1.43 per AUM in 2004, is established
by formula and is generally much lower than the fees charged by the
other federal agencies, states, and private ranchers. The other
agencies, states, and ranchers generally established fees to obtain the
market value of the forage. The formula used to calculate the BLM and
Forest Service grazing fee incorporates ranchers‘ ability to pay;
therefore the current purpose of the fee is not primarily to recover
the agencies‘ expenditures or to capture the fair market value of
forage. As a result, BLM‘s and the Forest Service‘s grazing receipts
fell short of their expenditures on grazing in fiscal year 2004 by
almost $115 million. The BLM and Forest Service fee also decreased by
40 percent from 1980 to 2004, while grazing fees charged by private
ranchers increased by 78 percent for the same period. If the purpose of
the fee were to recover expenditures, BLM and the Forest Service would
have had to charge $7.64 and $12.26 per AUM, respectively; alternately,
if the purpose were to gain a fair market value, the agencies‘ fees
would vary depending on the market. Differences in resources and legal
requirements can cause fees to vary; however, the approaches used by
other agencies could close the gap in expenditures and receipts or more
closely align BLM and Forest Service fees with market prices. The
purpose of the grazing fee is, ultimately, for the Congress to
determine.
www.gao.gov/cgi-bin/getrpt?GAO-05-869.
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[End of section]
Contents:
Letter:
Results in Brief:
Background:
Grazing Occurs on About 235 Million Acres of Federal Lands for a
Variety of Purposes:
Federal Agencies Spent at Least $144 Million on Grazing Activities,
Although Some Agencies Do Not Track Expenditures for Grazing on Federal
Lands:
Federal Agencies Collected About $21 Million in Grazing Receipts in
Fiscal Year 2004--Less Than One-Sixth of the Expenditures Needed to
Manage Grazing:
Grazing Fees Charged by Federal Agencies, Western States, and Private
Ranchers Varied Widely, Depending on the Purpose of the Fee and the
Approach Taken to Set It:
Concluding Observations:
Agency Comments:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Additional Factors in Evaluating Federal Grazing
Expenditures and Revenues:
Implications of Grazing for Local Economic Development:
Implications of Grazing on Quality of Rural Communities and Rancher's
Life:
Implications of Grazing for Rangeland Ecosystems and Management:
Appendix III: Detailed Grazing Data for Bureau of Land Management and
the Forest Service:
Acres and AUMs of Grazing:
Permits and Leases by Size:
Appendix IV: Grazing Fee for Lands Managed by BLM and the Forest
Service:
Current Fee for BLM's and the Forest Service's Western States:
History of Western Grazing Fees:
Appendix V: Examples of Other Federal Agency Grazing Fees:
Appendix VI: Western State Grazing Fees and Formulas:
Appendix VII: Comment from Department of the Interior:
GAO Comments:
Appendix VIII: Comments from the Forest Service:
Appendix IX: GAO Contact and Staff Acknowledgments:
Related Products:
Grazing Reports:
User Fee Reports:
Tables:
Table 1: Extent of Grazing in Fiscal Year 2004 on BLM and Forest
Service Lands, Acres and AUMs:
Table 2: Extent of Grazing in Fiscal Year 2004 on Other Agencies'
Lands, Acres and AUMs:
Table 3: Expenditures by BLM and the Forest Service for Direct,
Indirect, and Range Improvement Grazing Activities, Fiscal Year 2004:
Table 4: Estimated Expenditures by the National Park Service, U.S. Fish
and Wildlife Service, Reclamation, DOE, and DOD on Grazing Activities,
Fiscal Year 2004:
Table 5: Expenditures for Grazing-Related Activities by Other Agencies
on Federal Lands, Fiscal Year 2004:
Table 6: BLM and Forest Service Grazing Receipts, Fiscal Year 2004:
Table 7: National Park Service, U.S. Fish and Wildlife Service,
Reclamation, DOE, and DOD Services Grazing Receipts, Fiscal Year 2004:
Table 8: Fees Charged by Federal Agencies, State Land Agencies, and
Private Ranchers, 2004:
Table 9: Fees Charged by Private Ranchers and State Land Agencies in
2004:
Table 10: BLM Data on Acres and AUMs, by Field Office for Fiscal Year
2004:
Table 11: Forest Service Data on Acres and AUMs, by Forest and
Grassland, Grazing Year 2004:
Table 12: Number of BLM Permits by Size, Fiscal Year 2004:
Table 13: Number of Forest Service Cattle Permits by Size, Grazing Year
2004:
Table 14: Number of Forest Service Sheep Permits by Size, Grazing Year
2004:
Table 15: Number of Cattle and Calf Operations and Percent of
Inventory, United States, 2004:
Table 16: Number of Beef Cow Operations and Percent of Inventory,
United States, 2004:
Table 17: PRIA Formula Data for 1979 through 2004 and Fee Results for
1980 through 2005:
Table 18: Information on State Lands Used for Grazing, Revenues, and
Fee-Setting Approach in 17 Western States, Fiscal Year 2004:
Figures:
Figure 1: Location of Federal Lands, by Agency:
Figure 2: Grazing Fee BLM and the Forest Service Charged, 1980 to 2005:
Figure 3: Unconstrained Formula Results and PRIA Grazing Fee Compared
with Fees Charged on Private Lands:
Figure 4: Value of PRIA Grazing Formula Components, 1979 through 2004:
Abbreviations:
AUM: Animal unit month:
BCPI: Beef Cattle Price Index:
BLM: Bureau of Land Management:
DOD: Department of Defense:
DOE: Department of Energy:
FLPMA: Federal Land Policy and Management Act:
FVI: Forage Value Index:
GAO: Government Accountability Office:
IOAA: Independent Offices Appropriation Act:
NMFS: National Marine Fisheries Service:
OMB: Office of Management and Budget:
PPI: Prices Paid Index:
PRIA: Public Rangelands Improvement Act:
USDA: Department of Agriculture:
USGS: U.S. Geological Survey:
Letter September 30, 2005:
Congressional Requesters:
Since the early 1900s, the federal government has required ranchers to
pay a fee for grazing their livestock on millions of acres of federal
land located primarily in western states. On many federal lands, if
these ranchers comply with permit or lease conditions, they may be able
to renew their permits or leases indefinitely, effectively adding
forage, and hence value, to their operations.[Footnote 1] Over the
years, this arrangement has spurred controversy across a range of
issues. Advocates of grazing on federal lands contend that grazing is a
productive use of these lands and supports local economic development.
Advocates also believe that the fee charged is fair, allows ranchers to
stay in business, and provides stability to small rural communities.
Opponents argue that grazing damages public resources, such as wildlife
habitat, threatened and endangered species, and water quality.
Opponents also argue that federal expenditures for grazing are too high
and that fees charged for grazing are far too low, thereby contributing
to increased grazing and deterioration of range conditions.
Ten federal agencies have programs to allow private ranchers to graze
livestock on portions of the lands they manage: the Department of the
Interior's (Interior) Bureau of Land Management (BLM), National Park
Service, U.S. Fish and Wildlife Service, and Bureau of Reclamation
(Reclamation); the U.S. Department of Agriculture's (USDA) Forest
Service; the Department of Energy (DOE); and the Department of
Defense's (DOD) Army, Army Corps of Engineers (Corps), Air Force, and
Navy.[Footnote 2] In general, agencies manage their grazing programs by
establishing permit or lease conditions, monitoring livestock numbers
and resource conditions, planning and overseeing projects to improve
rangeland, and working with ranchers and local communities. While
federal lands in the eastern states are also used for grazing, grazing
occurs primarily on the agencies' lands located in 17 western
states.[Footnote 3] Other federal agencies, such as USDA's Wildlife
Services and the Department of Justice (Justice), do not have grazing
programs but do conduct activities that support these programs. For
example, Justice provides legal services to federal agencies, including
litigation of federal grazing lawsuits.
Grazing fees are set in several ways. The fee charged for grazing on
BLM and Forest Service lands is set using a formula first called for
under the Public Rangelands Improvement Act (PRIA) of 1978. The
formula, which expired in 1985 but was continued in 1986 by Executive
Order 12548,[Footnote 4] results in a price per animal unit month
(AUM)--that is, the amount of forage (vegetation such as grass and
shrubs) that a cow and her calf eat in a month (or one bull, one steer,
one horse, or five sheep).[Footnote 5] Fees can be specifically set by
legislation, or agencies are authorized, under certain circumstances,
to charge user fees under the Independent Offices Appropriation Act
(IOAA). Office of Management and Budget (OMB) Circular A-25, which
further interprets IOAA, states that user fees can be established to
recover the full cost of managing a program or to seek a fair market
value--that is, the price set through competitive bids or market
prices. When fees are set through competitive bidding, they achieve a
fair market value--that is, the price that a willing and knowledgeable
buyer pays and a willing and knowledgeable seller accepts. Competitive
bidding usually includes the use of either sealed bids or public
auction, advertising the permit or lease, and awarding it to the
highest bidder. In lieu of competition, fees can be set to achieve
market value based on an estimate or appraisal of comparable
properties.
Changes in the livestock industry, as well as continued disagreement
between advocates and opponents of grazing have, over the last 2
decades, resulted in several efforts to reform federal grazing fees for
BLM and Forest Service lands. In 1986 and 1992, the two agencies
studied alternative approaches to value grazing on federal rangelands
and the fee charged. In 1994, the Administration considered
administrative changes to the fee and range management regulations. In
the late 1990s, the Senate passed legislation to reform the fee to
reflect beef production from federal lands, but Congress ultimately did
not enact this legislation. In 2003, attention turned to buyouts of
federal grazing permits and leases in addition to grazing fees. Because
of changes in the livestock industry--increasing conflict with other
users of federal land, fluctuating prices of beef, and difficulty
finding new owners for ranches--some ranchers have expressed support
for the idea of a buyout. Others remain opposed.
In this context, you asked us to determine for 2004 the (1) extent of
grazing on, and program purposes for, lands managed by the 10 federal
agencies in the fiscal year; (2) amount spent in the fiscal year by
these agencies, and other federal agencies that have grazing-related
activities, to manage livestock grazing on public lands; (3) total
receipts collected during the fiscal year for grazing privileges by the
10 federal agencies with grazing programs, and the amounts disbursed to
counties, states, or the federal government; and (4) fees charged by
the 10 federal agencies, western states, and private ranchers, and the
reasons for any differences among the fees.[Footnote 6] In considering
agencies' expenditures and receipts, it is important to note that we
conducted a budgetary evaluation; that is, we examined the effects of
grazing programs on the U.S. Treasury and the federal budget and did
not analyze economic costs and benefits, which would involve a broad
set of trade-offs--some of which cannot be quantified--made by
individuals, the public, and the federal government. (See app. II for a
discussion of such factors.)
To respond to these questions, we obtained agencies' data on acres and
AUMs for their grazing programs,[Footnote 7] as well as expenditures,
receipts, disbursements, and fees.[Footnote 8] If an agency had a
central data information system, we obtained the data from this system
and determined, through interviews, system tests, and file reviews, as
appropriate, the reliability of the data and whether the agencies have
sufficient internal controls over the fund information in the systems.
If an agency did not centrally track the needed data, we developed a
data collection instrument for the agency's field unit managers to
complete. We relied on data reported by the agencies. To assess whether
the various types of data were sufficiently reliable for use in this
report, as well as to check key internal controls over grazing
receipts, we visited several agencies' field offices to review their
grazing programs, data systems, and a selection of grazing files to
verify the billing information; and we interviewed officials about key
steps in the processes for issuing grazing permits and leases and
billing for and collecting fees. We reviewed all the files at agencies
with smaller grazing programs (those with up to 25 permits or leases at
an office) and selected 10 percent of files at the two agencies that
had large grazing programs (250 and 500 allotment files per office).
While we gathered and reviewed expenditure data from the agencies, we
did not validate the data or the accounting systems that produced them.
To understand the differences among fees and approaches to setting
fees, we interviewed a range of experts from Colorado State University,
New Mexico State University, Oregon State University, and the
University of Montana, as well as the Society for Range Management. See
appendix I for a detailed discussion of our methodology. We conducted
our review between August 2004 and July 2005 in accordance with
generally accepted government auditing standards.
Results in Brief:
The 10 federal agencies managed more than 22.6 million AUMs on about
235 million acres of federal lands for private grazing and land
management in fiscal year 2004. Of this total, BLM and the Forest
Service managed almost 21.9 million AUMs on almost 231 million acres,
or more than 98 percent of the federal lands used for grazing. The
remaining 8 agencies managed almost 794,000 AUMs on more than 4 million
acres. While the agencies' grazing programs are similar in that they
offer private ranchers access to federal lands and forage for their
livestock, the agencies manage their grazing programs under different
authorities and for different purposes. For BLM lands and western
Forest Service lands, grazing is considered a principal or major
program, while other agencies generally use grazing as a management
tool to achieve their land management goals. For example, the U.S. Fish
and Wildlife Service uses grazing to reduce some grasses and thereby
allow other grasses to flourish that are favorable to particular types
of birds. Similarly, some of the DOD services use livestock to "cut"
their grass.
In fiscal year 2004, federal agencies, both those that have grazing
programs and those that have activities to support grazing, spent a
total of at least $144.3 million. The 10 federal agencies with grazing
programs spent at least $135.9 million, of which BLM and the Forest
Service spent the majority--about $132.5 million. The 8 remaining
agencies spent at least $3.4 million, but not all of them could
estimate their expenditures because they do not conduct grazing as a
major activity and therefore do not track expenditures specifically for
grazing. The 10 agencies spent funds on activities that directly
supported grazing, such as managing permits and leases, managing
grazing allotments, assessing the resource conditions of these
allotments, and implementing projects to improve the allotments, such
as building fences and developing water projects. They also spent funds
on activities that indirectly supported grazing, such as management,
budget, personnel, and other activities. In addition to these 10
agencies' expenditures, other federal agencies that do not have grazing
programs spent at least $8.4 million to support grazing on public
lands; some do not know the amount they spent because they do not
distinguish between work done on public and private lands. For example,
USDA's Wildlife Services removes predatory or nuisance wildlife that
threaten livestock on both public and private lands; the agency
estimated that it spent more than $5 million in fiscal year 2004 on its
activities on public lands. In the same year, Justice, which provides
legal services to federal agencies including services for litigation
related to grazing on public land, estimated that it spent about
$159,000 on grazing lawsuits. Other agencies, such as the Environmental
Protection Agency and USDA's Natural Resources Conservation Service,
conduct water quality projects and range improvement work that are
related to grazing, but the agencies cannot separate expenditures for
public lands from those on private lands.
The grazing permits and leases the 10 federal agencies manage generated
a total of about $21 million from fees charged in fiscal year 2004--or
less than one-sixth of the expenditures to manage grazing. From that
amount, the agencies distributed almost $5.7 million to states and
counties in which grazing occurred, deposited almost $3.8 million in
the Treasury as miscellaneous receipts, and deposited at least $11.7
million in separate Treasury accounts for the agencies' use. The
amounts distributed by each agency vary, depending on the agencies'
differing authorities. For example, of the $11.7 million deposited in
the separate Treasury accounts, BLM and the Forest Service deposited
$8.8 million into their range improvement funds. The majority of
grazing receipts--more than $17.5 million--came from BLM and Forest
Service permits and leases, while more than $3.7 million was generated
from the remaining agencies. In addition to cash receipts, the DOD
services also received almost $1.4 million in services, such as
maintaining fences, that offset grazing fees charged to their lessees.
Fees charged in 2004 by the 10 federal agencies, as well as state land
agencies and private ranchers, vary widely, depending on the purpose
for which the fees were established and the approach used to set the
fees. The fee BLM and the Forest Service charge for grazing--which was
$2.36 per AUM for BLM and $2.41 per AUM for the Forest Service in 1980,
when the fee based on the formula enacted by PRIA was first charged,
and $1.43 per AUM in 2004--is established by formula to account for
livestock industry prices and to support ranchers and the western
livestock industry. It is therefore generally lower than the fees
charged by the other federal agencies, states, and private ranchers.
The other agencies generally establish their fees based on the market
value of the forage, and as a result charged fees ranging from $0.29 to
more than $112 per AUM in fiscal year 2004, depending on the location,
range condition, and accompanying in-kind services. The state land
agencies in 17 western states charged fees that ranged from $1.35 to
$80 per AUM in fiscal year 2004, while the average fee private ranchers
charged ranged from $8 per AUM in Arizona and Oklahoma to $23 per AUM
in Nebraska. The complex formula used to calculate the BLM and Forest
Service fee for grazing on their lands incorporates factors that
consider ranchers' ability to pay; the purpose of the fee is therefore
not primarily to recover the agencies' expenditures or to capture the
fair market value of forage. These factors that adjust the fee resulted
in a difference of almost $115 million between grazing receipts and
agencies' expenditures on grazing activities in fiscal year 2004. BLM
and the Forest Service would have had to charge $7.64 per AUM and
$12.26 per AUM, respectively, to recover these expenditures in 2004.
These adjustment factors also resulted in the fee decreasing by 40
percent from 1980 to 2004 for grazing on BLM and Forest Service lands,
while fees charged by private ranchers increased 78 percent over the
same period. Although differences in the quality of resources, the
level of services provided, and legal requirements complicate the
comparison of private and federal lands, and competitive methods may be
administratively expensive, the approaches other federal agencies,
states, and private ranchers use could provide alternative approaches
for setting fees. These approaches could close the gap in expenditures
and receipts or more closely align BLM and Forest Service fees with
market prices; however, the purpose of the grazing fee and any policy
trade-offs are, ultimately, for the Congress to determine.
In responding to a draft of this report, Interior and the Forest
Service provided written comments. The agencies neither agreed nor
disagreed with the findings. Interior stated that the report recognized
that differences in resource conditions and legal requirements can
cause grazing fees to vary. The Forest Service stated that the report
accurately described the purpose of the grazing fee charged by BLM and
the Forest Service. DOD and DOE provided technical comments, which we
incorporated as appropriate. The departments of Commerce and of Justice
responded that they did not have comments. Interior's and the Forest
Service's comments are included in appendixes VII and VIII,
respectively.
Background:
The federal government manages more than 680 million acres of land in
the United States, including lands in national forests, grasslands,
parks, refuges, reservoirs, and military bases and installations. Of
the total federal lands, BLM and the Forest Service manage almost 450
million acres for multiple uses, including timber harvest, recreation,
grazing, minerals, water supply and quality, and wildlife habitat.
BLM's 12 state offices manage more than 260 million acres in 12 western
states, including 82 million acres in Alaska, while the Forest
Service's 123 administrative offices manage more than 190 million acres
across the nation.[Footnote 9] As shown in figure 1, the majority of
federal lands are located in the western half of the country.
Figure 1: Location of Federal Lands, by Agency:
[See PDF for image]
[End of figure]
The remaining lands are managed by the following agencies for different
purposes:
* Interior's National Park Service manages more than 350 national
parks, monuments, seashores, battlefields, preserves, and other areas
on 84 million acres of federal land; the U.S. Fish and Wildlife Service
manages more than 540 national wildlife refuges and 37 large multiple-
unit wetland management districts on more than 96 million acres of
land; and Reclamation manages about 8.5 million acres of land
associated with water projects in 17 western states.
* DOE manages almost 2.4 million acres of land making it the fourth
largest federal land owner after Interior, USDA, and DOD. It operates
30 major facilities on land holdings in 34 states. The buffer zones
surrounding many of these facilities consist of forests and rangelands.
* DOD has numerous Army, Air Force, and Navy installations on 29
million acres of land in many states, while the Corps, like
Reclamation, manages 12.7 million acres of land associated with water
projects in many states.
Livestock Grazing in the United States:
Most rangelands--primarily grasslands and shrublands--used to raise
livestock in the United States are privately owned, and as a result,
only a portion of livestock is raised on federal land.[Footnote 10] In
2004, the livestock industry had almost 95 million cattle and 989,460
cattle and calf operations, which include cattle raised for beef as
well as milk.[Footnote 11] Regionally, the eastern states had almost
590,000 cattle and calf operations, of which almost 440,500 were beef
cow operations; the states in the Great Plains (Nebraska, Kansas,
Oklahoma, North and South Dakota, and Texas) had 292,300 cattle and
calf operations with 253,000 beef cow operations; and the 11 western
states had more than 106,000 cattle and calf operations with about
80,400 beef cow operations. In contrast, the number of livestock
operations with BLM and Forest Service grazing permits and leases for
cattle, sheep, and other livestock totaled more than 23,000. Livestock
operations in the West differ from those in the eastern United States.
In the West, livestock operations involve larger areas of land, and
ranchers depend on a mix of private and federal lands to graze cattle
seasonally--in the summer and fall they use federal lands to graze
their livestock while they grow hay crops for the winter on their
private lands. In some parts of the West, primarily the Southwest,
grazing occurs year-round on federal lands. In the East, sufficient
rain allows grazing to occur on smaller pastures, in some places, year-
round.
Grazing on Federal Lands:
The country's rangelands have been used to graze domestic livestock
since the United States was settled, and the federal government has
managed grazing on federal lands for more than 100 years. During
western expansion, settlement typically occurred along streams and
rivers, where the soil is richer, vegetation denser, and water more
available. Lands that remained for the federal government to manage
after western expansion were lands that settlers did not want or could
not easily settle; the lands are often drier, less productive, and
located at higher elevations or farther from water. As the West was
settled throughout the late 1800s, conflict among different users of
the rangelands increased, as did degradation of these lands. As a
result, in 1897, the federal government began managing livestock
grazing in the nation's forest reserves; in 1906, the Forest Service
started charging a fee for grazing on these reserves.
The Forest Service managed grazing under its general authorities until
1950, when Congress enacted the Granger-Thye Act, authorizing the
Secretary of Agriculture to issue grazing permits on national forest
lands and other lands under the department's administration. In
addition to national forest lands on which grazing is allowed in the 16
western states, the Forest Service manages national grasslands in the
western states and forest lands in the eastern states for grazing. The
federal government started purchasing privately owned land in 1911 as
necessary for regulating the flow of navigable streams, creating
national forests in the East. The national grasslands, which are
primarily located in Colorado, Kansas, New Mexico, and North and South
Dakota, were purchased by the federal government under a land
utilization program started in the 1930s. Originally, the program
purchased submarginal lands to provide emergency relief to farmers
whose lands were failing. It evolved into a program designed to
transfer land to its most suitable use, culminating in the Bankhead-
Jones Farm Tenant Act of 1937. In 1954, the Secretary of Agriculture
transferred the responsibility for program administration to the Forest
Service and in 1960 designated almost 3.8 million acres of lands in the
program as national grasslands.
To stop continued degradation caused by overgrazing of the remaining
public lands, among other purposes, the Congress passed the Taylor
Grazing Act in 1934. Under the act, the predecessor to BLM--the Grazing
Service--was created, and control over grazing on public lands was
established. The Taylor Grazing Act authorized the establishment of
grazing districts from public lands that were considered to be chiefly
valuable for grazing and raising forage crops and the leasing of other
public lands that were located outside grazing districts. The act also
provided for the issuance of permits and leases for these lands and set
forth requirements for the distribution of funds received from grazing.
Additional laws affecting grazing on both BLM and western Forest
Service lands were enacted in the 1970s. The Federal Land Policy and
Management Act of 1976 (FLPMA) limited the length of permits and leases
to 10 years and allowed shorter terms, authorized terms and conditions
to be placed on a permit or lease, and allowed seasonal limits on
grazing. In 1978, PRIA required BLM and the Forest Service to inventory
and manage their lands in western states.
To provide access to grazing, both BLM and the Forest Service divide
their rangelands into allotments, which can vary in size from a few
acres to hundreds of thousands of acres of land. Because of the land
ownership patterns that occurred when the lands were settled, the
allotments can be adjacent to private lands, or they can be
intermingled with private lands. Under its authorities, BLM permits
grazing in allotments within its grazing districts and leases lands
outside grazing districts. The Forest Service, which does not have
grazing districts, uses permits to authorize grazing in its allotments.
To be eligible for a permit or lease on one of BLM's allotments,
ranchers, among other things, are required to own or control land or
water, called a base property.[Footnote 12] Under Forest Service
guidance, permits are issued to purchasers of permitted livestock or
base property.
The other federal agencies that manage grazing do not have the same
grazing authorities, processes, or fees as BLM and the Forest Service.
Each agency manages its grazing for different purposes and under
different authorities. For example, the U.S. Fish and Wildlife Service
permits grazing on a year-to-year basis, depending on a refuge's land
management goals, while the National Park Service permits grazing for a
longer period but can choose to not renew a permit if certain
conditions change, including damage to park resources, limitations to
interpretive experiences, or impairment of park facilities.
User Fees for Grazing on Federal Lands:
Federal grazing fees are considered as user fees. Without statutory
authority to charge a fee and retain the proceeds, a federal agency may
not charge a fee to defray the cost of services or resources it
provides. Congress has provided some agencies with specific authority
to charge a user fee and retain and use the proceeds. If an agency does
not have specific authority, the IOAA provides general authority for an
agency to impose a fee if certain conditions are met. However, even if
the user fee applies, an agency may not retain the proceeds from a user
fee without specific authority to that effect, but must credit the
collections to the general fund of the Treasury as miscellaneous
receipts. OMB Circular A-25 provides guidance to agencies regarding
their imposition of user fees under the IOAA and other statutes. Under
the circular, federal agencies that do not have specific authority to
impose a fee are to charge user fees pursuant to the IOAA when an
individual or a group receives benefits--such as those that provide
business stability or respond to an individual or a group's request--
that are greater than those that the general public enjoys.
Increasingly since the 1980s, to relieve pressure on taxpayers for
increasing general appropriations for the federal government, user fees
have been levied to help pay for federal services and resources that
benefit specific groups of users. User fees differ from broad-based
taxes in that they attempt to recover some amount of the government
expenditures made for a specific program. For example, Congress enacted
laws to increase the use of recreation fees for access to federal
parks, forests, and BLM lands in the 1990s.
While agencies are generally to deposit funds they receive in the
general fund of the Treasury under the Miscellaneous Receipts Act, some
federal agencies have specific legislative authority to distribute
funds to states and counties or to deposit funds into special accounts
in the Treasury for the agency's or program's use. Generally, funds
that are deposited into the Treasury as miscellaneous receipts are
deposited in the general fund where they are then available to be
appropriated as Congress may see fit. Funds that are deposited into
special accounts in the Treasury are dedicated for specific purposes.
The special accounts may be permanently appropriated or further
congressional action may be needed to make the funds available. Some
agencies are also authorized to retain funds for credit to their
appropriations.
Grazing Occurs on About 235 Million Acres of Federal Lands for a
Variety of Purposes:
In fiscal year 2004, BLM, the Forest Service, the National Park
Service, U.S. Fish and Wildlife Service, Reclamation, DOE, the Army,
the Corps, Air Force, and Navy allowed more than 22.6 million AUMs of
grazing on about 235 million acres of the lands they manage.[Footnote
13] BLM and the Forest Service managed most of this grazing activity,
allowing almost 21.9 million AUMs on almost 231 million acres, or more
than 98 percent of the grazed lands. The remaining eight agencies
allowed almost 794,000 AUMs of grazing on more than 4 million acres.
While the agencies' grazing programs are similar in that they offer
private ranchers access to federal lands and vegetation for their
livestock, agencies manage their grazing programs under different
authorities and for different purposes.
BLM and the Forest Service Managed About 230.6 Million Acres for About
21.9 Million AUMs of Private Livestock Grazing in Fiscal Year 2004 to
Foster Economic Development:
As table 1 shows, in fiscal year 2004, BLM and the Forest Service
approved a total of almost 21.9 million AUMs for grazing on more than
230.6 million acres--BLM approved almost 12.7 million AUMs on more than
137.7 million acres, and the Forest Service approved almost 9.2 million
AUMs on more than 92.9 million acres. Ranchers were billed for and used
fewer AUMs--a total of almost 13.7 million AUMs--primarily because of
the continuing drought in the western and southwestern states,
according to agency officials. While BLM maintains a list of historical
AUMs--or grazing privileges that have been reduced from historical
amounts and are not available to be used--these numbers do not affect
the totals.
Table 1: Extent of Grazing in Fiscal Year 2004 on BLM and Forest
Service Lands, Acres and AUMs:
Agency: BLM state offices[A]:
Agency: Arizona;
Acres: 7,955,000;
AUMs approved: 660,000;
AUMs billed: 354,000.
Agency: California;
Acres: 5,672,000;
AUMs approved: 421,000;
AUMs billed: 196,000.
Agency: Colorado;
Acres: 6,593,000;
AUMs approved: 655,000;
AUMs billed: 311,000.
Agency: Idaho;
Acres: 10,756,000;
AUMs approved: 1,352,000;
AUMs billed: 899,000.
Agency: Montana;
Acres: 7,839,000;
AUMs approved: 1,366,000;
AUMs billed: 1,178,000.
Agency: New Mexico;
Acres: 11,533,000;
AUMs approved: 1,869,000;
AUMs billed: 1,134,000.
Agency: Nevada;
Acres: 39,331,000;
AUMs approved: 2,129,000;
AUMs billed: 1,075,000.
Agency: Oregon/Washington;
Acres: 12,786,000;
AUMs approved: 1,058,000;
AUMs billed: 740,000.
Agency: Utah;
Acres: 19,321,000;
AUMs approved: 1,229,000;
AUMs billed: 553,000.
Agency: Wyoming;
Acres: 15,917,000;
AUMs approved: 1,951,000;
AUMs billed: 1,193,000.
Agency: Subtotal;
Acres: 137,702,000[C];
AUMs approved: 12,691,000;
AUMs billed: 7,634,000.
Agency: Forest Service[B]:
Agency: Eastern;
Acres: 75,000;
AUMs approved: 35,000;
AUMs billed: 34,000.
Agency: Intermountain;
Acres: 24,107,000;
AUMs approved: 2,979,000;
AUMs billed: 2,164,000.
Agency: Northern;
Acres: 8,268,000;
AUMs approved: 1,095,000;
AUMs billed: 539,000.
Agency: Pacific Northwest;
Acres: 11,408,000;
AUMs approved: 550,000;
AUMs billed: 398,000.
Agency: Pacific Southwest;
Acres: 12,353,000;
AUMs approved: 486,000;
AUMs billed: 374,000.
Agency: Rocky Mountain;
Acres: 17,129,000;
AUMs approved: 1,927,000;
AUMs billed: 1,564,000.
Agency: Southern;
Acres: 675,000;
AUMs approved: 40,000;
AUMs billed: 19,000.
Agency: Southwestern;
Acres: 18,908,000;
AUMs approved: 2,052,000;
AUMs billed: 959,000.
Agency: Subtotal;
Acres: 92,924,000;
AUMs approved: 9,165,000;
AUMs billed: 6,051,000.
Total;
Acres: 230,626,000;
AUMs approved: 21,856,000;
AUMs billed: 13,685,000.
Source: BLM and Forest Service (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] BLM has 12 state offices, 2 of which--the Eastern Office and the
Alaska Office--are not included here. BLM manages grazing under PRIA in
the 11 states listed, which are managed by the 10 state offices.
[B] The Forest Service is organized by regions, not states.
[C] BLM authorizes grazing on approximately 160 million acres of land,
but all the land may not be used for grazing in any given year. The
number in the table represents BLM's best estimate of the lands on
which grazing was billed.
[End of table]
As table 1 shows, BLM's and the Forest Service's responsibilities for
managing grazing varied considerably by state office or Forest Service
region. The BLM Nevada state office had the most grazing in fiscal year
2004, in terms of both acres and approved AUMs, while Montana had the
most grazing in terms of billed AUMs; the California state office had
the least grazing, in terms of both acres and approved AUMs. For the
Forest Service, the Intermountain Region, which includes Utah, Nevada,
and portions of Idaho and Wyoming, had the most grazing, while the
Eastern and Southern regions had the smallest amounts of grazing.
Appendix III contains the detailed extent of grazing for each BLM field
office within each state office and Forest Service administrative
office.
Grazing is allowed on BLM and Forest Service lands for the purpose of
fostering economic development for private ranchers and ranching
communities by providing ranchers access to additional forage.
Particularly in the western states, where the agencies manage anywhere
from 30 to almost 85 percent of the land, access to federal forage
increases the total forage available to ranchers, enabling them to
increase the number of livestock they can support and sell. Under
FLPMA, the Taylor Grazing Act, and the Granger-Thye Act, BLM's and the
Forest Service's permits and leases are set for not more than 10 years
and can be renewed without competition at the end of that period, which
gives the permittee or lessee a priority position against others for
receiving a permit or lease--a position called "preference." While
ranchers have preference, they do not obtain title to federal lands
through their grazing permits and leases, nor do they have exclusive
access to the federal lands, which are managed for multiple purposes or
uses.
The Remaining Eight Federal Agencies Managed About 794,000 AUMs of
Grazing on More Than 4 Million Acres in Fiscal Year 2004 to Help Them
Achieve Land Management Objectives:
In fiscal year 2004, the National Park Service, Reclamation, U.S. Fish
and Wildlife Service, DOE, and DOD services managed about 794,000 AUMs
of grazing on more than 4 million acres of land. Table 2 shows the
extent of grazing.
Table 2: Extent of Grazing in Fiscal Year 2004 on Other Agencies'
Lands, Acres and AUMs:
Agency: Interior:
Agency: National Park Service;
Number of parks, refuges, projects, and installations: 31 parks;
Acres[A]: 1,580,000[B];
AUMs approved: 71,000;
AUMs billed: 63,000.
Agency: Reclamation;
Number of parks, refuges, projects, and installations: 36 projects;
Acres[A]: 737,000[C];
AUMs approved: 91,000;
AUMs billed: 77,000.
Agency: U.S. Fish and Wildlife Service;
Number of parks, refuges, projects, and installations: 94 refuges;
Acres[A]: 740,000[B];
AUMs approved: 199,000;
AUMs billed: 199,000.
Subtotal;
Number of parks, refuges, projects, and installations: 161;
Acres[A]: 3,054,000;
AUMs approved: 361,000;
AUMs billed: 339,000.
Agency: DOE;
Number of parks, refuges, projects, and installations: 1 site;
Acres[A]: 291,000;
AUMs approved: 13,000;
AUMs billed: 6,000.
Agency: DOD:
Agency: Air Force;
Number of parks, refuges, projects, and installations: 12
installations;
Acres[A]: 277,000;
AUMs approved: 102,000;
AUMs billed: 89,000.
Agency: Army;
Number of parks, refuges, projects, and installations: 20
installations;
Acres[A]: 201,000;
AUMs approved: 126,000;
AUMs billed: 122,000.
Agency: Corps;
Number of parks, refuges, projects, and installations: 64 projects;
Acres[A]: 169,000;
AUMs approved: 162,000;
AUMs billed: 161,000.
Agency: Navy;
Number of parks, refuges, projects, and installations: 8 installations;
Acres[A]: 16,000;
AUMs approved: 30,000;
AUMs billed: 28,000.
Subtotal;
Number of parks, refuges, projects, and installations: 104;
Acres[A]: 663,000;
AUMs approved: 420,000;
AUMs billed: 399,000.
Total;
Number of parks, refuges, projects, and installations: 266;
Acres[A]: 4,008,000;
AUMs approved: 794,000;
AUMs billed: 744,000.
Source: Agencies (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] The rate of AUMs per acre can vary, depending on the productivity
of the land and does not necessarily show overuse or underuse of land.
[B] This total does not include about 2.7 million acres of National
Park Service land in Alaska that has about 17,000 AUMs approved for
grazing or almost 795,000 acres of U.S. Fish and Wildlife Service land
in Alaska that has about 12,000 AUMs approved for grazing. These lands
are approved for grazing of reindeer, and no fees are charged.
[C] This total includes almost 499,000 acres of Reclamation land with
about 47,000 AUMs approved and 41,000 billed AUMs that are managed by
other agencies. Of the 499,000 acres, BLM managed almost 172,000 acres
and the U.S. Fish and Wildlife Service managed almost 66,000 acres.
[End of table]
As table 2 shows, the extent of grazing on the eight agencies' lands
varied considerably in fiscal year 2004, with the National Park Service
managing grazing on about 1,580,000 acres, while the Navy managed
almost 16,000 acres. In terms of approved AUMs, the U.S. Fish and
Wildlife Service managed the most--more than 199,000 AUMs--while DOE
allowed about 13,000 AUMs.
The eight agencies presented in table 2 manage or allow grazing for
different purposes, as the following discussion details:
National Park Service. The agency is authorized to allow grazing within
any national park, monument, or reservation as long as such use is not
detrimental to the primary purpose for creating the park, monument, or
reservation. Agency regulations prohibit grazing except as (1)
specifically authorized by statute, (2) required under a reservation of
use rights arising from the acquisition of a tract of land, (3)
required in order to maintain a historic scene, or (4) conducted as an
integral part of a recreational activity. For example, in Virginia and
North Carolina, the agency allows grazing at Blue Ridge National
Parkway--about 5,000 AUMs of cattle on more than 2,000 acres--to
maintain a historic scene. In contrast, at the Appomattox Court House
National Historical Park, the agency allowed grazing on almost 200
acres to maintain a desirable grass level. Grazing is managed as a
special park use, requiring a permit, lease, concession, contract, or
commercial use authorization. Each park superintendent approves or
disapproves requests for special park uses, such as grazing, and can
impose conditions to protect park resources and values and visitors and
the visitors' experience. In fiscal year 2004, the National Park
Service reported that grazing was permitted to occur at 31 of its
parks, with Glen Canyon National Recreation Area, in Utah and Arizona,
accounting for the most acres--almost 666,000--and Point Reyes National
Seashore, in California, accounting for the most AUMs--about 18,500
AUMs on about 24,000 acres.
U.S. Fish and Wildlife Service. The National Wildlife Refuge System
Administration Act of 1966 authorizes various uses of U.S. Fish and
Wildlife Service lands, including grazing, as long as the agency
determines that such use is compatible with the major purposes for
which the refuge was established. The agency uses grazing as a tool to
manage habitat. For example, in the Anahuac, McFaddin, and Texas Point
National Wildlife Refuges, along the Texas Gulf Coast, the agency
allowed livestock grazing from October to April, the cool season of the
year, to encourage different types of marsh grasses, generate annuals,
and increase vegetative diversity, thereby opening up additional
habitat for foraging waterfowl. In fiscal year 2004, the U.S. Fish and
Wildlife Service reported that livestock grazing occurred on 94 of its
refuges and wetland management districts, ranging from 25 AUMs on 60
acres at Detroit Lakes Wetland Management District in Minnesota to
about 21,500 AUMs on 450,000 acres at the Charles M. Russell National
Wildlife Refuge in Montana.
Reclamation. Reclamation allows its lands to be used for incidental
purposes, such as recreation and grazing, as long as such uses do not
interfere with the operation of the dams or irrigation works associated
with these projects. In general, Reclamation allows grazing on its
project lands when asked to do so by users, such as ranchers who have
had historical access to the lands or wildlife managers wanting to
improve habitat. For example, the Albuquerque Area Office allows
grazing on more than 19,000 acres in the Brantley and Avalon Reservoirs
project area, thereby allowing ranchers access to lands that they
historically grazed. In fiscal year 2004, Reclamation reported that it
permitted and leased lands for grazing at 36 of its facilities in 16
area offices, with the agency managing some of the permits and leases
and other agencies, such as BLM, the U.S. Fish and Wildlife Service, or
local and state agencies managing additional permits and leases under
joint management agreements. For example, in central Washington state,
BLM manages grazing on more than 8,000 acres of Reclamation land that
is adjacent to BLM land in the Columbia Basin Project. In the same
area, the Washington Department of Fish and Wildlife manages grazing on
almost 18,000 acres of Reclamation land to improve vegetation and
thereby enhance bird habitat. In total, in fiscal year 2004,
Reclamation issued permits and leases for about 91,000 AUMs of grazing
on almost 737,000 acres--almost 44,000 AUMs and about 238,000 acres
under Reclamation's management and about 47,000 AUMs and about 499,000
acres managed by agreement with other agencies.
DOE. The department allows grazing on only one site, the Idaho National
Laboratory. Under the Taylor Grazing Act, the Secretary of the Interior
is authorized, by order and with the approval of the relevant
department, to establish grazing districts of certain public domain
lands that are not in national forests, parks, or monuments. In Idaho,
Interior, with the agreement of DOE, issued such an order, and
livestock grazing continues on approximately 50 percent of the Idaho
National Laboratory site. BLM manages the land as part of its grazing
program but is to follow the security and land access requirements set
by DOE.
DOD. Under 10 U.S.C. § 2667, the Secretaries of the Army, Air Force,
and Navy are authorized to lease property under their control that is
not excess property, if it will promote national defense or be in the
public interest. The military services use this authority to lease
rangelands on military installations and bases for grazing, among other
uses. For example, the Air Force leases to nearby ranchers land that
forms a buffer around the Melrose Air Force Range at Cannon Air Force
Base in New Mexico. The buffer consists of rangelands surrounding
target areas used in training exercises and protects more developed
areas from stray (unarmed) bombs. According to Air Force staff, leasing
the land to ranchers does not hinder training exercises, but it does
provide access to grazing for neighboring landowners and to maintain
rangeland, by keeping grass low, to control fire. Similarly, Fort Hood
in Texas allows grazing on lands used for armored vehicle training
maneuvers. The Army determined that grazing cattle could be compatible
with training exercises, although uncertainty remains about the
intensity of grazing that can be allowed, given the need to let
vegetation recover from training exercises, and hence, reduce soil
erosion into nearby streams and reservoirs. Like the Army, Air Force,
and Navy, the Corps manages grazing on its lands under 10 U.S.C. §
2667. In fiscal year 2004, the DOD military services leased about
494,000 acres for grazing, and the Corps leased about 169,000 acres.
Federal Agencies Spent at Least $144 Million on Grazing Activities,
Although Some Agencies Do Not Track Expenditures for Grazing on Federal
Lands:
Federal agencies spent at least $144.3 million in direct and indirect
expenditures to support grazing activities on federal lands in fiscal
year 2004. The 10 federal agencies spent at least $135.9 million, of
which the Forest Service and BLM spent the majority of funds, about
$132.5 million. The 8 remaining agencies spent at least $3.4 million on
their grazing programs, but not all of the agencies could estimate
their expenditures because they do not conduct grazing as a major
activity and therefore do not specifically track grazing expenditures.
The 10 agencies spent funds on activities that directly supported
grazing, such as managing permits and leases, monitoring resource
conditions on grazing allotments, assuring permit and lease compliance,
and implementing range improvements such as developing water sources
and constructing fences. The agencies also spent funds on activities
that indirectly supported grazing, such as management, budget, and
personnel. In addition to these 10 agencies' expenditures, other
federal agencies that do not have grazing programs spent at least $8.4
million to support grazing on public lands. While some of these
agencies could identify their expenditures related to grazing on public
lands, not all agencies could do so because they do not distinguish
between work done on public and private lands. These agencies spent
funds on activities related to grazing, such as grazing litigation,
threatened and endangered species consultations for grazing plans, and
the removal of predatory or nuisance wildlife from grazing lands.
Because some agencies do not track their grazing expenditures on public
lands specifically, the expenditures presented are a conservative
estimate of federal grazing expenditures; expenditures would most
likely be higher if these agencies could provide estimates.
BLM and the Forest Service Spent About $132.5 Million on Direct,
Indirect, and Range Improvement Activities for Grazing Programs in
Fiscal Year 2004:
BLM and the Forest Service spent about $132.5 million to manage their
grazing programs in fiscal year 2004--BLM spent more than $58.3
million, and the Forest Service spent almost $74.2 million. As shown in
table 3, the agencies spent these funds on both direct, indirect, and
range improvement activities. BLM has implemented a cost-management
system that identifies direct and indirect expenditures and used it to
identify its direct and indirect expenditures in fiscal year 2004.
Unlike BLM, the Forest Service does not have a cost-management system,
but rather reports expenditures for items in its budget, called budget
line items.[Footnote 14] The agency uses its Foundation Financial
Information System to centrally track and formally report expenditures.
For fiscal year 2004, the Forest Service used expenditure reports for
grazing and related line items, in addition to its WorkPlan system that
shows its intended work plans for the fiscal year, to identify the
amount of expenditures.[Footnote 15]
Table 3: Expenditures by BLM and the Forest Service for Direct,
Indirect, and Range Improvement Grazing Activities, Fiscal Year 2004:
Dollars in millions.
BLM:
Direct;
Expenditures: $27.9.
Indirect;
Expenditures: $18.7.
Range improvement funds (both direct and indirect);
Expenditures: $11.7.
Subtotal;
Number of BLM field offices and Forest Service administrative offices
allowing grazing: 107;
Expenditures: $58.3.
Forest Service[A]:
Direct;
Expenditures: $58.0.
Indirect;
Expenditures: $13.3.
Range improvement funds (both direct and indirect);
Expenditures: $2.9.
Subtotal;
Number of BLM field offices and Forest Service administrative offices
allowing grazing: 99;
Expenditures: $74.2.
Total;
Number of BLM field offices and Forest Service administrative offices
allowing grazing: 206;
Expenditures: $132.5.
Source: BLM and Forest Service (data); GAO (analysis).
[A] The Forest Service estimated direct expenditures from the Forest
Service grazing line item, its watershed and vegetation line item, and
its General Management and other cost pools. Because the watershed and
vegetation line item can be spent for other programs in addition to the
grazing program, the Forest Service allocated a portion (11 percent) of
these expenditures using WorkPlan, a tool used to estimate and plan
fiscal year workloads by program. To estimate the expenditures from its
General Management and other cost pools, the agency attributed a
portion of the grazing line item equal to the amount of funds allocated
to the pools and attributed a share of the watershed and vegetation
line item equal to the allocated portion (11 percent) of funds in the
pools.
[End of table]
In fiscal year 2004, the agencies generally included the same
activities in reporting their expenditures. Both BLM and the Forest
Service included managing grazing permits and leases, monitoring
resource conditions on grazing allotments, conducting environmental
assessments for allotments, and managing grazing fees as direct
expenditures. Both agencies included expenditures that specifically
related to grazing management, rather than broader range management
expenditures, because grazing activities are distinct from more general
rangeland management activities. According to agency officials, many
range management activities need to be conducted whether or not grazing
occurs. For example, monitoring rangeland conditions through vegetation
surveys supports work that the agencies conduct to manage noxious
weeds. While some noxious weeds may occur on federal lands as a result
of livestock grazing, some can be transported by other means. Although
both agencies spent funds on land management planning to support their
specific grazing plans and activities, neither agency included land
management planning expenditures. According to BLM and Forest Service
officials, land management planning and environmental impact statements
are important enough to be a separate direct expenditure from grazing
and would continue to occur if the agencies no longer permitted or
leased grazing activities on their lands. Furthermore, according to
agency officials, land management planning encompasses all activities-
-including livestock grazing--conducted by BLM, at the field office
level on public lands, or by the Forest Service, at the national forest
level for all national forest system lands. Even if grazing activities
were not conducted, other range management activities, such as oil and
gas leasing and off-road vehicle use, would still need to be planned
and studied.
For indirect grazing activities in fiscal year 2004, BLM spent almost
$18.7 million, and the Forest Service spent an estimated $13.3 million.
Indirect activities are those that cannot be specifically attributed to
grazing because they also benefit other resource programs. These
include activities such as administrative activities, infrastructure,
or technical support.[Footnote 16] One method of allocating indirect
expenditures is to pool the activities and allocate the related
expenditures across all the programs that use the activities. BLM
allocated its indirect expenditures using its cost-management system.
The system allocated expenditures for such activities as management,
state office expenditures, and BLM office expenditures in fiscal year
2004. Because the Forest Service does not have a cost-accounting
system, it allocates its budget according to potential indirect
expenditures. The Forest Service has six cost pools, into which it
allocates a percent of each of its budget line items for the fiscal
year to be used to cover indirect expenditures during the
year.[Footnote 17]
BLM and the Forest Service also spent $14.6 million on range
improvement activities in fiscal year 2004. These funds are revenues
from grazing fees charged in 2003 and deposited as receipts in the
agencies' range improvement accounts. The agencies use the funds to pay
for direct and indirect activities related to range improvement
projects that include constructing fences, developing water sources
such as tanks or impoundments, and seeding to improve vegetation and
forage amounts. The expenditure of funds on these assets represents an
investment in infrastructure assets that are the property of the United
States.[Footnote 18] Under federal financial management standards, both
BLM and the Forest Service are working to identify the value of these
assets, which is currently unknown.
The Remaining Eight Federal Agencies Spent at Least $3.4 Million on
Grazing Programs in Fiscal Year 2004, but They Do Not Track All
Expenditures:
In fiscal year 2004, the National Park Service, U.S. Fish and Wildlife
Service, Reclamation, DOE, and the DOD services spent at least $3.4
million on their grazing programs, as shown in table 4. Because it
arranges with BLM to manage its grazing program, DOE incurs only
incidental expenditures related to grazing. Because the agencies use
grazing as a tool to support other management goals, they do not
specifically track grazing, and hence do not track direct or indirect
grazing expenditures. For this reason, the expenditures are the best
estimates of individuals who manage the grazing programs.
Table 4: Estimated Expenditures by the National Park Service, U.S. Fish
and Wildlife Service, Reclamation, DOE, and DOD on Grazing Activities,
Fiscal Year 2004:
Agency: Interior:
Agency: National Park Service;
Number of parks, refuges, projects, and installations: 31 parks;
Estimated expenditures[A]: $410,000.
Agency: Reclamation;
Number of parks, refuges, projects, and installations: 36 projects;
Estimated expenditures[A]: $91,000.
Agency: U.S. Fish and Wildlife Service;
Number of parks, refuges, projects, and installations: 94 refuges;
Estimated expenditures[A]: $1,099,000[B].
Subtotal;
Number of parks, refuges, projects, and installations: 161;
Estimated expenditures[A]: $1,600,000.
Agency: DOE;
Number of parks, refuges, projects, and installations: 1 site;
Estimated expenditures[A]: $1,500.
Agency: DOD.
Agency: Air Force;
Number of parks, refuges, projects, and installations: 12
installations;
Estimated expenditures[A]: $377,000.
Agency: Army;
Number of parks, refuges, projects, and installations: 20
installations;
Estimated expenditures[A]: $717,000.
Agency: Corps;
Number of parks, refuges, projects, and installations: 64 projects;
Estimated expenditures[A]: $672,000.
Agency: Navy;
Number of parks, refuges, projects, and installations: 8 installations;
Estimated expenditures[A]: $39,000.
Subtotal;
Number of parks, refuges, projects, and installations: 104;
Estimated expenditures[A]: $1,805,000.
Total;
Number of parks, refuges, projects, and installations: 266;
Estimated expenditures[A]: $3,406,000.
Source: Agencies (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] Not all offices provided an estimate.
[B] This total does not include $9,000 of expenses at Yukon Delta
National Wildlife Refuge in Alaska for operations approved for
nonfederal use for grazing of reindeer; no fees are charged.
[End of table]
The field managers for these eight agencies identified the following
activities associated with grazing on federal lands: fence installation
and repair, cattle troughs, cattle guard installation, fertilizer,
personnel, security, monitoring and inspections, control of invasive
species and noxious weeds, and managing grazing leases. Generally, the
estimates are low because they do not include all expenditures--
including indirect expenditures--and several offices did not provide
estimates.
Other Agencies Have Grazing-Related Activities and Expenditures of at
Least $8.4 Million, but Some Do Not Know Their Expenditures for Grazing
on Federal Lands:
In addition to the 10 federal agencies' expenditures, other federal
agencies estimated that they spent $8.4 million on activities that are
related to grazing on federal lands. Agencies that have grazing-related
activities include the following:
* several USDA agencies that provide research, insurance, resource
management, and other agricultural services to farmers and ranchers on
both federal and private lands;
* Justice, the Interior's Office of the Solicitor, and USDA's Office of
General Counsel, which perform legal services for BLM and the Forest
Service;
* the National Oceanic and Atmospheric Administration's National Marine
Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service, which
consult with agencies on threatened and endangered species;
* the U.S. Geological Survey (USGS), which provides research on
resource conditions on rangelands; and:
* the Environmental Protection Agency, which provides grants to improve
watersheds that may include areas with resources degraded by grazing.
The agencies estimated, when possible, the share of their fiscal year
2004 expenditures for grazing-related activities on federal lands, as
shown in table 5.
Table 5: Expenditures for Grazing-Related Activities by Other Agencies
on Federal Lands, Fiscal Year 2004:
Agricultural services:
Agency: USDA:
Agency: Animal and Plant Health Inspection Service;
Activity: Wildlife Services conducts control projects (hunting and
trapping) for nuisance species and predators. Plant Protection and
Quarantine conducts insect control on western lands in particular and
has a Mormon cricket and grasshopper program that targets treatments in
infested areas to prevent outbreaks;
Expenditures: $5,183,000.
Agency: Cooperative State Research, Education, and Extension Service;
Activity: Conducts education and extension services to help public
agencies like BLM and the Forest Service and private landowners manage
their range resources;
Expenditures: Not available[A].
Agency: Farm Service Agency;
Activity: Provides operating, ownership, and emergency loans to farmers
and ranchers. Also provides disaster assistance to livestock producers
through various programs;
Expenditures: Not available[A].
Agency: National Agricultural Statistics Service;
Activity: Conducts surveys of different farm sectors, prices, and
products, including ranching, livestock, and cattle. Conducts specific
surveys to produce data needed to calculate federal grazing fee;
Expenditures: $105,500[B].
Agency: Natural Resources Conservation Service;
Activity: Works with private landowners to conserve soil, water,
vegetation, and other resources. Manages programs to conserve wetlands,
land (easements), and water;
Expenditures: Not available[A].
Agency: Risk Management Agency;
Activity: Provides insurance products that may apply to federal lands
and tools for making resource decisions. Developing a Web tool to
assist mangers in applying prescribed burns to rangelands;
Expenditures: Not available[A].
Agency: Subtotal agricultural services;
Expenditures: $5,183,000[B].
Legal services:
Agency: USDA Office of General Counsel;
Activity: Provides legal advice and support for the Forest Service in
managing its grazing lands and permits;
Expenditures: $194,000.
Agency: Interior's Office of the Solicitor[C];
Activity: Provides legal advice and support for agencies that manage
grazing programs;
Expenditures: $493,000[D].
Agency: Justice;
Activity: Provides legal services such as litigating grazing-related
cases;
Expenditures: $159,000.
Agency: Subtotal legal services;
Expenditures: $846,000.
Consultations:
Agency: U.S. Fish and Wildlife Service[D];
Activity: Conducts consultations to determine if grazing programs
jeopardize terrestrial or freshwater threatened and endangered species,
or adversely modify or destroy critical habitat;
Expenditures: $549,000.
Agency: NMFS[D];
Activity: Conducts consultations to determine if grazing programs
jeopardize ocean-dwelling and anadromous threatened and endangered
species, or adversely modify or destroy critical habitat;
Expenditures: $132,000.
Agency: Subtotal consultations;
Expenditures: $681,000.
Research:
Agency: USGS[E];
Activity: Conducts research on the effects of grazing on plant
communities, including invasive species; runoff and erosion; select
species or species groups; and ecosystem health, including riparian
areas;
Expenditures: $1,350,000.
Agency: Agricultural Research Service;
Activity: Conducts research on plant resources, forage, livestock, and
grazing management, as well as natural resource problems such as
invasive species;
Expenditures: Not available[A].
Agency: Forest Service Research;
Activity: Conducts integrated studies of grazing on public lands, which
involves effects of livestock grazing on resources;
Expenditures: $368,000.
Agency: Subtotal research;
Expenditures: $1,718,000.
Other:
Agency: Environmental Protection Agency;
Activity: Provides grant money to states under section 319 of the Clean
Water Act to improve watersheds by reducing nonpoint source pollution,
including increased runoff and sedimentation from livestock grazing;
Expenditures: Not available[A].
Agency: Total all activities;
Expenditures: $8,428,000[B].
Source: Agencies (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] These agencies could not distinguish their expenditures on private
and public lands.
[B] The National Agricultural Statistics Service estimated its
expenditures to be $105,500, the full amount of which was reimbursed by
BLM and the Forest Service because the data produced are used to set
grazing fees. Therefore, these expenditures are not included in the
total.
[C] The Solicitor's expenditures include funds reimbursed by BLM for
legal services provided to the agency. According to BLM staff, because
the attorney provides services to BLM in general, the appropriate share
of expenditures that should be applied to grazing is difficult to
estimate. As a result, some of the Solicitor's funds may also be
counted under BLM's expenditures.
[D] The U.S. Fish and Wildlife Service noted that fiscal year 2004 was
the first year that it implemented its cost-accounting system to
capture these costs, and it has not yet determined the level of
accuracy that the system will provide for distinguishing expenditures
for various activities. While NMFS did not use a cost-accounting system
to determine its expenditures, it estimated its expenditures using time
estimates for specific employees that worked on grazing consultations
in 2004. NMFS reported these data for the calendar year, not the fiscal
year.
[E] USGS estimated its fiscal year 2004 expenditures based on its 2005
budget figures; according to an official, funding has been stable.
[End of table]
Agricultural services. As the table shows, in fiscal year 2004, the
largest amount of identified expenditures for grazing-related
activities went to agricultural services provided by USDA. The Animal
and Plant Health Inspection Service spent most of these funds to
control nuisance species and insects, such as Mormon crickets and
grasshoppers, that affect forage on federal lands. Not all the agencies
identified as having programs that might be used by ranchers with
federal permits and leases could separate out the funds they spent on
public lands. For example, the Natural Resources Conservation Service
helps ranchers manage their soil, water, and vegetation to prevent the
resources from becoming degraded; however, because the agency focuses
on ranchers, it cannot distinguish the work that it performs on private
land from work on federal lands.
Legal services. Justice attorneys represent the United States in cases
that go to court or settlement, while Interior's Office of the
Solicitor and USDA's Office of General Counsel provide legal advice to
the agencies. In addition to these expenditures, BLM and Forest Service
staff provide support work for litigation in the form of copying and
preparing administrative files and documents, but these expenditures
are not tracked separately from the agencies' other work. Legal
services would include any payment of attorney fees; however, none were
paid in fiscal year 2004. Attorney fees are usually paid by agencies,
but in some cases would be paid from the Department of Treasury's
Judgment Fund.
Consultations. The federal agencies with grazing programs must consult,
in some cases, with the U.S. Fish and Wildlife Service and NMFS to
determine if their grazing programs pose any problem for threatened and
endangered species. The U.S. Fish and Wildlife Service consults with
the agencies on the potential effects to terrestrial animals and
freshwater species, while NMFS consults with the agencies on the
potential effects to anadromous fish--that is, fish that live in both
fresh and saltwater.
Research. USGS has four centers that conduct research on the effects of
grazing on plant communities, including invasive plants; runoff and
erosion, and other hydrologic and soil conditions; select species or
species groups, including sage grouse, amphibians, grassland birds, and
bats; and ecosystem health, including riparian areas. The agency works
with federal land management agencies on these and related issues to
inform management actions and plans and to design and implement
rangeland monitoring and inventories. The Forest Service's Rocky
Mountain and Pacific Northwest research stations conduct integrated
studies of the effects of livestock grazing on lands and resources and
assist national forests and grasslands by providing them this
information. Finally, USDA's Agricultural Research Service has more
than 100 laboratories in almost every state. The agency conducts
research on ecosystems and sustainable management, plant resources,
forage management, livestock management, and management of pests and
weeds. Because the agency's work benefits both the livestock industry
and public lands, the Agricultural Research Service cannot estimate its
expenditures related to grazing on federally managed lands.
Environmental Protection Agency. The agency provides grants to states
to improve watersheds and water quality that has been impaired by
nonpoint sources of pollution, such as agricultural runoff. States use
the funds to develop projects to remove or decrease sources of
pollution. For example, New Mexico received funds to improve the Chama
River and its tributaries, and the Santa Fe National Forest
participated by conducting different vegetation and livestock
management activities, such as fencing riparian areas, developing
alternative water sources in areas away from the river, and ensuring
the rotation of livestock into different pastures away from the river.
However, because many grazing areas include both federal and nonfederal
lands and because states are not required to track what type of land is
involved in a project, Environmental Protection Agency officials stated
that they cannot identify the funds that are spent on federal lands
that have been grazed.
Federal Agencies Collected About $21 Million in Grazing Receipts in
Fiscal Year 2004--Less Than One-Sixth of the Expenditures Needed to
Manage Grazing:
The 10 federal agencies collected a total of about $21 million from
fees charged for their grazing permits and leases in fiscal year 2004-
-less than one-sixth of the expenditures needed to manage grazing; the
largest amount of funds, $17.5 million, was collected by BLM and the
Forest Service. From the total amount, the agencies distributed almost
$5.7 million to states and counties, deposited almost $3.8 million in
the Treasury as miscellaneous receipts, and deposited at least $11.7
million to separate Treasury accounts to be further appropriated or
used by the agencies for their various programs. In addition, the DOD
services received payment in-kind valued at almost $1.4 million to
offset grazing fees, and Reclamation and the U.S. Fish and Wildlife
Service also received in-kind services. Reclamation received services
valued at about $1,100, and the U.S. Fish and Wildlife Service received
services of unknown value. The distribution of funds depends on the
agencies' different authorities.
BLM and the Forest Service Collected About $17.5 Million in Grazing
Receipts in Fiscal Year 2004, Distributed About $4.8 Million to States
and Counties, and Deposited About $3.7 Million to the General Fund of
the Treasury and Almost $8.8 Million to Range Improvement Funds:
BLM and the Forest Service collected about $17.5 million, or 83
percent, of all grazing receipts federal agencies collected in fiscal
year 2004. As shown in table 6, depending on the authorities under
which the receipts were raised, the funds were distributed to the
states, deposited into the general fund of the Treasury, and deposited
into special accounts in the Treasury for further appropriation and
agency use, including use for range improvement.
Table 6: BLM and Forest Service Grazing Receipts, Fiscal Year 2004:
Dollars in millions.
BLM;
Receipts: $11.8;
Disposition of receipts: Receipts distributed to states and counties:
$2.2;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $3.7;
Disposition of receipts: Receipts deposited in Treasury range
improvement funds: $5.9[A].
Forest Service;
Receipts: $5.7;
Disposition of receipts: Receipts distributed to states and counties:
$2.6;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $Unknown;
Disposition of receipts: Receipts deposited in Treasury range
improvement funds: $2.9.
Total;
Receipts: $17.5;
Disposition of receipts: Receipts distributed to states and counties:
$4.8;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $3.7;
Disposition of receipts: Receipts deposited in Treasury range
improvement funds: $8.8.
Source: Agencies (data); GAO (analysis).
[A] In fiscal year 2004, BLM also deposited $1.2 million in certain
mineral receipts as funds for range improvements. The total funds
deposited were therefore $7.1 million.
[End of table]
Under FLPMA, 50 percent or $10 million, whichever is greater, of fees
collected in a year for grazing on BLM lands managed under the Taylor
Grazing Act and the Act of August 28, 1937, and on Forest Service land
in the 16 western states, are to be credited to a special fund receipt
account in the Treasury for range rehabilitation, protection, and
improvements, called the range improvement fund. Half of this account
is authorized to be appropriated for use in the district, region, or
national forest from which it was generated, and the remaining half is
to be used for range rehabilitation, protection, and improvement as the
Secretary directs. According to agency officials, the agencies
distribute 50 percent of the actual grazing receipts from their
individual grazing accounts to their respective range improvement
funds. As table 6 shows, in fiscal year 2004, BLM distributed about
$5.9 million to its range improvement fund, and the Forest Service
distributed about $2.9 million to its range improvement fund, for a
total of about $8.8 million. BLM distributes grazing fees from four
accounts, according to where the funds were collected--within or
outside a grazing district or from grasslands. It also deposits certain
mineral receipts into its range improvement fund; in fiscal year 2004,
it deposited $1.2 million in mineral receipts. The Forest Service
deposits receipts and distributes funds from its National Forest Fund
that also contains receipts for other activities on forest lands such
as timber harvest.
In addition to the receipts distributed to range improvement--under the
Taylor Grazing Act, the Act of August 28, 1937, and the Bankhead-Jones
Farm Tenant Act--BLM also distributes receipts from the four accounts
to states and the Treasury, according to whether the fees were
collected within or outside a grazing district or from
grasslands.[Footnote 19] For lands within grazing districts--those
lands on which grazing is permitted--BLM distributes 12.5 percent of
receipts to the states in which the grazing districts are situated and
deposits the remaining receipts in the Treasury as miscellaneous
receipts. For lands outside of grazing districts--those lands that are
leased--BLM distributes 50 percent of the receipts to the states and
does not return any funds to the Treasury as miscellaneous receipts.
For grasslands, BLM distributes 50 percent of receipts to the range
improvement fund, 25 percent to states, and 25 percent to the Treasury
as miscellaneous receipts. The states are to distribute the funds to
the counties in which the lands are permitted or leased for school or
road purposes. In 2004, the agency distributed more than $2.2 million
to the states and counties and deposited more than $3.7 million in the
Treasury.
Under the Act of May 23, 1983, the Forest Service distributes 25
percent of all of its receipts--timber, recreation, grazing, and
others--to states for schools and roads. Alternatively, the states can
receive funds under the Secure Rural Schools and Community Self-
Determination Act of 2000. This act sought to stabilize payments to
states in which shared revenues from the federal lands, such as from
timber, were dwindling. The act allows some counties and states to
choose a payment equal to the average of the three highest payments for
Forest Service receipts during a particular eligibility period. As a
result, the Forest Service makes a mix of payments, depending on what
each county has chosen. In 2004, the Forest Service estimated that it
distributed more than $2.6 million in grazing receipts to the states
and counties; because the Forest Service deposits many types of
receipts into the Treasury, it was unable to estimate the amount of
grazing funds deposited in the Treasury as miscellaneous receipts.
National Park Service, U.S. Fish and Wildlife Service, Reclamation,
DOE, and DOD Services Collected More Than $3.7 Million in Grazing
Receipts in Fiscal Year 2004 and Distributed About $855,000 to States
and Counties, Deposited About $65,000 in the General Fund of the
Treasury, and Deposited at Least $2.9 Million in Separate Treasury
Accounts:
Grazing receipts collected by the National Park Service, U.S. Fish and
Wildlife Service, Reclamation, and the DOD services totaled more than
$3.7 million in fiscal year 2004, with the U.S. Fish and Wildlife
Service generating the largest amount, more than $1.0 million. In
addition, the agency received services in-kind of an unknown value.
Under the interagency agreement between DOE and BLM, BLM retains
grazing fees collected at DOE's Idaho National Laboratory. The DOD
services--which combined received a total of more than $2.0 million
from fees--also received almost $1.4 million in payments in-kind that
offset grazing fees. The agencies have different authorities for
distributing the receipts collected from use of their lands. Table 7
shows the results of the distribution in fiscal year 2004. Of the $3.7
million in total receipts, more than $855,000 was distributed--by three
of the eight agencies--to the states or counties in which the receipts
were collected in fiscal year 2004. Two agencies deposited about
$65,200 in the general fund of the Treasury as miscellaneous receipts,
and each of the agencies deposited varying portions of the receipts for
their programs.[Footnote 20]
Table 7: National Park Service, U.S. Fish and Wildlife Service,
Reclamation, DOE, and DOD Services Grazing Receipts, Fiscal Year 2004:
Interior.
Agency: National Park Service;
Receipts: $196,000;
Disposition of receipts: Receipts distributed to states and counties:
$800;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $2,500;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $192,000.
Agency: Reclamation;
Receipts: $478,000[A];
Disposition of receipts: Receipts distributed to states and counties:
$0;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $0;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $478,000[B].
Agency: U.S. Fish and Wildlife Service;
Receipts: $1,029,000;
Disposition of receipts: Receipts distributed to states and counties:
$541,000[C];
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $0;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $488,000[C].
Subtotal;
Receipts: $1,702,000;
Disposition of receipts: Receipts distributed to states and counties:
$542,000;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $2,500;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $1,158,000.
DOE;
Receipts: [D].
DOD[E].
Agency: Air Force;
Receipts: $663,000;
Disposition of receipts: Receipts distributed to states and counties:
$0;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $0;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $773,000.
Payment in-kind (offsets);
Receipts: ($300,000).
Agency: Army;
Receipts: $706,000;
Disposition of receipts: Receipts distributed to states and counties:
$0;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $0;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $941,000.
Payment in-kind (offsets);
Receipts: ($211,000).
Agency: Corps;
Receipts: $487,000;
Disposition of receipts: Receipts distributed to states and counties:
$313,000;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $62,700;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $42,000.
Payment in-kind (offsets);
Receipts: ($301,000).
Agency: Navy;
Receipts: $150,000;
Disposition of receipts: Receipts distributed to states and counties:
$0;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $0;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $39,000.
Payment in-kind (offsets);
Receipts: ($562,000).
Subtotal;
Receipts: $2,006,000;
Disposition of receipts: Receipts distributed to states and counties:
$313,000;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $62,700;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $1,794,000.
Subtotal offsets;
Receipts: ($1,375,000).
Total without offsets;
Receipts: $3,708,000;
Disposition of receipts: Receipts distributed to states and counties:
$855,000;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $65,200;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $2,952,000.
Total offsets;
Receipts: ($1,375,000).
Total with offsets;
Receipts: $5,083,000;
Disposition of receipts: Receipts distributed to states and counties:
$855,000;
Disposition of receipts: Receipts deposited in the general fund,
Treasury: $65,200;
Disposition of receipts: Receipts deposited in special Treasury
accounts for agency programs: $2,952,000.
Source: Agencies (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] Of the total, about $476,600 was collected as cash receipts, and
about $1,100 was provided as services in-kind to offset fees. Of the
$476,600, Reclamation collected more than $303,300, and the agencies
that manage grazing permits and leases on Reclamation lands collected
and distributed almost $173,300 to Reclamation. In addition to the
$173,300 that they distributed to Reclamation, the agencies that manage
grazing permits and leases for Reclamation collected and retained
almost $108,500, for a total of almost $282,000.
[B] Of the $476,600 collected by Reclamation in cash receipts, about
$188,000 was deposited into the Reclamation Fund, and about $279,200
was retained by Reclamation to repay projects; agency officials could
not explain where about $9,400 was credited.
[C] The U.S. Fish and Wildlife Service disburses all receipts for
activities such as grazing, forest products, oil and gas, sand and
gravel, and others from its National Wildlife Refuge Fund. Because the
agency cannot separate out the disbursed funds by type, such as
grazing, we used the percent that grazing funds made up of total funds
to show the distribution. Grazing funds were 16 percent of the total
funds.
[D] DOE has an agreement with BLM to manage its grazing and therefore
the grazing receipts gathered are included in BLM's totals.
[E] The military services' programs are reimbursable in that the
services collect funds and then use those funds to reimburse or pay for
program expenditures.
[End of table]
National Park Service. The National Park Service has the authority to
recover its costs of providing services associated with its special-use
expenditures. These reimbursements are to be credited to the current
appropriation. Under National Park Service guidance, each national park
retains funds to reimburse its expenditures for managing grazing and is
responsible for calculating the amount of funding that it can
recover.[Footnote 21] In fiscal year 2004, the parks retained about 98
percent of their grazing receipts and distributed about 1 percent to
the Treasury. Two parks--Blue Ridge National Parkway and Point Reyes
National Seashore--gathered 75 percent, or about $146,000, of the total
receipts. In addition to the amounts retained by the parks, the City of
Rocks National Reserve in Idaho distributed about $800 to the state in
fiscal year 2004 under a cost-sharing arrangement.
U.S. Fish and Wildlife Service. Under the Refuge Revenue Sharing Act of
1935, as amended, the U.S. Fish and Wildlife Service deposits grazing
receipts--as well as receipts it gathers for other uses of its lands--
into a separate Treasury account called the National Wildlife Refuge
Fund. The funds deposited remain available until expended, without
further appropriation, and the Secretary may pay necessary expenditures
incurred by the U.S. Fish and Wildlife Service from the account. The
act also requires the agency to make payments to counties to offset tax
losses for the purchase of fee title lands,[Footnote 22] based on a
formula contained in the law that entitles counties to the greater of
three amounts: (1) $0.75 multiplied by the total acres of fee title
land in the county; (2) three-quarters of 1 percent of the fair market
value of the fee title land in that county; or (3) 25 percent of the
net receipts collected by the agency at that unit. The Secretary is
also required to pay 25 percent of the net receipts collected on lands
reserved from the public domain. In practice, the agency retains a
portion of all receipts from its lands to pay for various
administrative and refuge expenditures and provides the remainder to
the counties. In fiscal year 2004, the agency collected more than $6
million in receipts for all permitted uses on its lands; and about 16
percent of the receipts were grazing receipts. After the agency
retained $3.1 million for its use, it had about $3.5 million to pay to
the counties. Because grazing receipts collected in fiscal year 2004
represented about 16 percent of total receipts, we estimate that the
U.S. Fish and Wildlife Service retained about $488,000 for its refuge
system administration and distributed about $541,000 to counties.
Reclamation. Reclamation credits revenues generated from grazing leases
in a number of different ways. For example, under specific project
authorizations, Reclamation retains receipts to repay projects or
deposits funds to be appropriated for future projects. Under
Reclamation's agreements with the agencies that manage leases on its
land, grazing fees will be deposited into a Treasury account. When
authorized by Reclamation, the fees may remain with the managing agency
to serve as reimbursement. In fiscal year 2004, of the total amount
collected for grazing on Reclamation land, about $303,300 came from
grazing leases that Reclamation manages and about $173,300 came from
leases managed by other agencies; the agency also received about $1,100
in services in-kind to offset fees. Reclamation deposited about
$188,000 in the Reclamation Fund in the Treasury and retained about
$279,200 to repay projects (agency officials could not explain into
which of these accounts the remaining $9,400 was deposited). The other
agencies that manage grazing leases on Reclamation land kept about
$108,500 in grazing receipts.
DOD. The Army, Air Force, and Navy do not return grazing receipts to
the states or the Treasury, while the Corps is required to deposit all
of its receipts--for recreation, grazing, or other leases of lands
surrounding its water projects--in the Treasury; the Secretary of the
Treasury is then required to return 75 percent of these receipts to the
states in which the lands are located. The Army, Corps, Air Force, and
Navy are authorized to retain and spend funds to cover the
administrative expenses of their grazing programs and to cover the
financing of multiple land use management programs at any of their
installations.[Footnote 23] The Corps district offices began retaining
and managing 10 percent of their receipts for administrative expenses
in fiscal year 2004; agencywide, these receipts totaled almost $42,000.
Under their leasing authorities, the Army, Corps, Air Force, and Navy
collected more than $3.7 million in receipts and received payments in-
kind valued at about $1.4 million to offset fees. The DOD services
offset fees by allowing the lessees to work on the grazing lands to pay
for a portion or all of the lease. For example, some of the grazing
programs at DOD installations, projects, and bases allow the lessees to
maintain fences or mow the lands, in addition to grazing, to reduce
vegetation. The value of such services--and therefore the offset value--
is either estimated by the staff in charge of grazing programs based on
prior expenditures, prices from the Natural Resources Conservation
Service, or bids submitted by the ranchers.
Grazing Fees Charged by Federal Agencies, Western States, and Private
Ranchers Varied Widely, Depending on the Purpose of the Fee and the
Approach Taken to Set It:
Fees charged in 2004 by the 10 federal agencies, as well as state land
agencies and private ranchers, varied widely, depending on the purpose
for which the fees were established and the approach to setting the
fee.[Footnote 24] On BLM and Forest Service lands in the 11 western
states, the grazing fee was $1.43 per AUM, while the fees on other
federal lands varied from $0.29 to over $112 per AUM. In part, the BLM
and Forest Service fee, which was initially set by legislation and was
extended by executive order, enables ranchers to stay in production by
keeping fees low to account for conditions in the livestock market.
Most other federal agencies generally charge a fee based on competitive
methods or set to obtain a market price for the forage on their lands,
and some of them also seek to recover expenditures for their grazing
programs. Similarly, state land offices in the 17 western states and
private ranchers seek market value for grazing on their lands; the
state agencies charged from $1.35 to $80 per AUM, while the average
price private ranchers charged ranged from $8 per AUM in Arizona and
Oklahoma to $23 per AUM in Nebraska. If the BLM and the Forest Service
were to charge a fee for the purpose of recovering their expenditures,
they could have charged up to $7.64 per AUM and $12.26 per AUM,
respectively, in 2004. If they were to charge a market-based fee, the
fee could vary but would likely not equal private or state fees. The
prices charged by other federal agencies, states, and private ranchers
may vary because of factors, such as range productivity, services
provided by the landowner, and access to land.
BLM and Forest Service Grazing Fee in Western States Is Lower Than Fees
Charged by Other Agencies, States, and Ranchers Because It Was
Established to Support the Western Livestock Industry:
The grazing fee BLM and the Forest Service charge in western states is
based on a formula that was originally established by PRIA to, among
other things, prevent economic disruption and harm to the western
livestock industry; the formula expired after 7 years but was extended
indefinitely by Executive Order 12548.[Footnote 25] Federal grazing
fees are set using a formula to achieve multiple conflicting
objectives, including achieving fair market value; recovering federal
expenditures for the program; and treating different parties such as
ranchers, the public, and other users of public lands equitably. As a
result, the fee produced by the formula is generally lower than the
fees charged by the other agencies, states, and private ranchers. Table
8 shows the fees charged by each agency, state, and private ranchers,
as well as the approach to setting the fee--either a formula or a
market-based approach. None of the federal or state agencies use an
approach that strictly recovers their agencies' administrative or
management expenditures.
Table 8: Fees Charged by Federal Agencies, State Land Agencies, and
Private Ranchers, 2004:
Interior:
Agency: BLM;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $1.43;
Approach to setting fee: Executive order--formula.
Agency: National Park Service;
Range of fees charged per AUM (or equivalent)[A]: $1.35 to $7.00; 1.50
to 25.00 per acre;
Average fee charged per AUM (or equivalent)[A]: $4.30;
Approach to setting fee: Fixed prices and market value.
Agency: Reclamation;
Range of fees charged per AUM (or equivalent)[A]: 1.27 to 56.46;
Average fee charged per AUM (or equivalent)[A]: $10.93;
Approach to setting fee: Market value and fixed prices.
Agency: U.S. Fish and Wildlife Service;
Range of fees charged per AUM (or equivalent)[A]: 0.29 to 34.44;
Average fee charged per AUM (or equivalent)[A]: $11.24;
Approach to setting fee: Market value and negotiated prices.
USDA:
Agency: Forest Service--16 western states;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $1.43;
Approach to setting fee: Executive order--formula.
Agency: Forest Service--grasslands;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $1.52;
Approach to setting fee: Formula.
Agency: Forest Service--eastern states;
Range of fees charged per AUM (or equivalent)[A]: 2.47 to 5.04;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Formula and market value.
Agency: DOE;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $1.43;
Approach to setting fee: BLM fee--formula.
DOD:
Agency: Air Force;
Range of fees charged per AUM (or equivalent)[A]: 1.35 to 26.67[C];
Average fee charged per AUM (or equivalent)[A]: $15.49;
Approach to setting fee: Market value.
Agency: Army;
Range of fees charged per AUM (or equivalent)[A]: 0.99 to 66.09[C];
Average fee charged per AUM (or equivalent)[A]: $19.10;
Approach to setting fee: Market value.
Agency: Corps;
Range of fees charged per AUM (or equivalent)[A]: 0.82 to 112.50[C];
Average fee charged per AUM (or equivalent)[A]: $6.22;
Approach to setting fee: Market value.
Agency: Navy;
Range of fees charged per AUM (or equivalent)[A]: 10.42 to 97.49[C];
Average fee charged per AUM (or equivalent)[A]: $32.60;
Approach to setting fee: Market value.
States:
Agency: Arizona;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $2.23;
Approach to setting fee: Market-based appraisal with annual adjustment.
Agency: California;
Range of fees charged per AUM (or equivalent)[A]: 1.35 to 12.50;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market based on average rates.
Agency: Colorado;
Range of fees charged per AUM (or equivalent)[A]: 6.65 to 8.91;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market-based formula.
Agency: Idaho;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $5.15;
Approach to setting fee: Formula similar to federal fee.
Agency: Kansas;
Range of fees charged per AUM (or equivalent)[A]: [D];
Average fee charged per AUM (or equivalent)[A]: [D];
Approach to setting fee: [D].
Agency: Montana;
Range of fees charged per AUM (or equivalent)[A]: 5.48 to 80.00;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: Nebraska;
Range of fees charged per AUM (or equivalent)[A]: 16.00 to 28.00;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: New Mexico;
Range of fees charged per AUM (or equivalent)[A]: 0.71 to 10.15 per
acre;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: Nevada;
Range of fees charged per AUM (or equivalent)[A]: [D];
Average fee charged per AUM (or equivalent)[A]: [D];
Approach to setting fee: [D].
Agency: North Dakota;
Range of fees charged per AUM (or equivalent)[A]: 1.73 to 19.69 per
acre;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: Oklahoma;
Range of fees charged per AUM (or equivalent)[A]: 7.00 to 16.00;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: Oregon;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $4.32;
Approach to setting fee: Formula based on production factors.
Agency: South Dakota;
Range of fees charged per AUM (or equivalent)[A]: 3.00 to 56.00 per
acre;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market with minimum bid.
Agency: Texas;
Range of fees charged per AUM (or equivalent)[A]: 4.16 to 12.50;
Average fee charged per AUM (or equivalent)[A]: [B];
Approach to setting fee: Market-based appraisal.
Agency: Utah;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $1.43 or 2.35;
Approach to setting fee: Formula similar to federal fee.
Agency: Washington;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $5.41 or 7.76;
Approach to setting fee: Market-based formula or formula based on
production factors.
Agency: Wyoming;
Range of fees charged per AUM (or equivalent)[A]: [B];
Average fee charged per AUM (or equivalent)[A]: $4.13;
Approach to setting fee: Market-based formula.
Agency: Private ranchers--17 states[E];
Range of fees charged per AUM (or equivalent)[A]: 8.00 to 23.00;
Average fee charged per AUM (or equivalent)[A]: $13.40;
Approach to setting fee: Market value.
Sources: GAO's analysis of data provided by 10 federal agencies, 17
state agencies, and USDA's National Agricultural Statistics Service.
Note: The 11 western states used to calculate the BLM and Forest
Service fee are Arizona, California, Colorado, Idaho, Montana, Nevada,
New Mexico, Oregon, Utah, Washington, and Wyoming. The 9 western and
Great Plains states used to calculate the Forest Service grassland fee
are Colorado, Kansas, Nebraska, New Mexico, North Dakota, Oklahoma,
South Dakota, Texas, and Wyoming.
[A] For permits and leases that are competitively bid, a total amount
is often bid. In such cases, we divided that total by the amount of
AUMs in the permit or lease to determine an equivalent fee per AUM.
[B] Data are not applicable or available.
[C] The ranges reported for the Army, Corps, Air Force, and Navy have
been converted by dividing the total receipts plus offsets by the
number of AUMs reported. The ranges are based on average lease prices
for the installations, bases, and projects.
[D] Kansas and Nevada do not manage grazing on state trust lands and
therefore did not provide fee information.
[E] The private rancher fees in the 17 states are calculated using AUM
and per head data, adjusted. The formula is (AUM + per head)/2.
[End of table]
As shown in table 8, the fee BLM and the Forest Service charged for the
western states in 2004 was $1.43 per AUM. The fee, which is set for
each upcoming grazing year (March to February), is produced by a
formula that consists of a $1.23 base value, multiplied by the sum of
three indexes that are calculated each year by USDA's National
Agricultural Statistics Service.[Footnote 26] These indexes are based
on data collected in the agency's livestock, prices, and cattle
surveys. In effect, the fee is adjusted to reflect ranchers' ability to
pay. The $1.23 base value represents the difference between the costs
of conducting ranching business on private and public lands,[Footnote
27] as computed in a 1966 study of 10,000 ranching individuals in the
western states. The three indexes are the following:
* Forage Value Index (FVI). This index is based on the weighted average
estimate of the annual rental charge for cattle on private rangelands
in 11 western states.
* Beef Cattle Price Index (BCPI). This index is based on the weighted
average selling price for beef cattle in the 11 western states.
* Prices Paid Index (PPI). This index includes select adjusted
components from USDA's Index of Prices Paid by Farmers for Goods and
Services. The components include items such as fuel, tractors and
machinery, interest, and farm wage rates.
Under both PRIA and the executive order, increases and decreases in the
fee are limited to 25 percent per year, and under the executive order,
the fee cannot drop below $1.35 per AUM.
The Forest Service's fees for grazing on national grasslands and
eastern forests differ from the fee charged in its forests in the 16
western states. The fee charged for grasslands uses a formula similar
to the western grazing fee, but with a different base value that
recognizes the different costs for managing national forests versus
national grasslands. The fee charged for grazing in the eastern forests
is based on a formula with a noncompetitively established base value
adjusted by the current period's hay price index, less the value of any
range improvements required by the agency. The 2004 fee for grasslands
was $1.52 per AUM, and the fee for eastern forests ranged from $2.47
per AUM in Florida to $5.04 per AUM in the northeastern states for
noncompetitive permits. In addition, the Forest Service puts some
permits up for competitive bidding in the eastern states.
Appendix IV discusses the BLM and Forest Service fee and formula first
established under PRIA in more detail, the history of the federal
grazing fee, and the results of studies conducted over the years to
recommend alternative approaches to charging fees.
U.S. Fish and Wildlife Service, Reclamation, and DOD Services Generally
Set Fees at, or Close to, Market Value:
In contrast to the fee charged by BLM and the Forest Service for
grazing on western lands, the National Park Service, U.S. Fish and
Wildlife Service, Reclamation, and DOD services are required or
directed to set fees that reflect, or come close to, market value. The
agencies do not have one uniform approach to setting a grazing fee:
some of the agencies, such as the Air Force and National Park Service,
charge per acre; and others, such as the Corps, receive a total bid
price for a pasture. To achieve a fair market value, in some instances,
the agencies use a competitive bidding process that involves notifying
the public of the opportunity to permit or lease a grazing pasture, the
acceptance of sealed bids, and the selection of the highest bid. In
other instances, the agencies conduct a market appraisal of a grazing
property, or use an average prevailing rate for the local area, and set
a fee based on those values. Consequently, as the following discussion
shows, the prices that the agencies charge vary widely, from as low as
$0.29 per AUM to more than $112.50 per AUM.[Footnote 28]
National Park Service. The fees charged for grazing in fiscal year 2004
ranged from $1.35 to $7 per AUM and $1.50 to $25 per acre. National
Park Service guidance directs parks to charge fair market value for
special uses such as grazing, unless otherwise directed by law. The
fees charged in fiscal year 2004, which were set by individual parks or
park units, included some fees set at market prices and others that
were negotiated or fixed. The lowest fee per AUM, $1.35, was charged by
several parks, including Black Canyon of the Gunnison National Park in
Colorado and Capitol Reef National Park in Utah. The highest fee per
AUM, $7, was charged by Point Reyes National Seashore, in northern
California. That park used an independent appraisal of its lands to
establish the grazing fees. The lowest per acre fee in fiscal year
2004, $1.50 per acre, was negotiated at the Buffalo National River in
Arkansas. The highest per acre fee, $25, was charged at several parks,
including Minuteman Missile National Historic Site in South Dakota,
which set its fee based on average local rates, and Eisenhower National
Historic Site and Gettysburg National Military Park in Pennsylvania,
which fixed their grazing fees, also based on average local rates.
Similarly, Blue Ridge National Parkway, in Virginia and North Carolina,
which accounted for just over 50 percent of total Park Service
livestock grazing permits in fiscal year 2004, charged a rate of $10
per acre for each of its 212 permits. The fee was established using
values in a 2002 survey that the park's staff conducted of other
National Park Service field offices that administer agricultural
programs, as well as market-rate information for grazing in the
vicinity of the parkway that the park staff gathered from county
extension and other agricultural offices.
U.S. Fish and Wildlife Service. The grazing fees charged in fiscal year
2004 were, for the most part, established using market-value prices,
including prices set by USDA's National Agricultural Statistics
Service. Prices ranged from $0.29 per AUM to $34.44 per AUM; both fees
were based on competitive bids for grazing permits at the Sand Lake
Wetland Management District in South Dakota, where access to small
sites and forage conditions can vary greatly. Under U.S. Fish and
Wildlife Service regulations, refuges are to charge a fee for the grant
of privileges or products taken from refuges that is commensurate with
fees charged for similar privately granted privileges or products, or
with local market prices. To establish the fees charged in fiscal year
2004, most refuges--particularly those in western states--issued
permits at the market rate, including the USDA rate. For example, the
fee charged at the refuge with the largest amount of grazing, the
Charles M. Russell National Wildlife Refuge in Montana, averaged $14.76
per AUM. A few refuges did not use a market value fee but instead
negotiated the grazing fee with the permittee. For example, managers at
the Hutton Lake National Wildlife Refuge in Wyoming negotiated a fee of
$8.80 per AUM, based on the USDA rate, less services for fencing and
irrigation.
Reclamation. In fiscal year 2004, the fees charged ranged from $1.27
per AUM to $56.46 per AUM. Reclamation guidance directs the agency to
enter into permits and leases using competitive means when there is
likely to be demand from more than one party, but permits and leases
may be negotiated when it is in the best interest of the United States
or if no competition is present. In fiscal year 2004, while the
majority of Reclamation's area offices set grazing fees using
competitive approaches, or other approaches that establish a market
price, some of the offices used fixed fees or negotiated with local
ranchers to agree on a fee. For example, the Wyoming Area Office, which
manages several projects in and around the state of Wyoming, used
competitive bidding that opened with a minimum bid. The area office
staff set the minimum bid using the average private lease rates in the
state, as provided by USDA. One area office also used a discounted
lease method, in which the office used an average private lease rate
for the area and discounted it for factors such as multiple uses of the
lands.[Footnote 29] When area offices charged fixed fees, they
generally set them at historic levels. For example, the Lahontan Basin
Area Office, which manages Reclamation activities in the Lahontan Basin
Area in northern Nevada and eastern California, manages 56 grazing
permits and leases that were inherited from local irrigation districts
and charged the same fee in fiscal year 2004 as the irrigation offices
charged in the past.
DOE. In its agreement with DOE to manage on Idaho National Laboratory
land, BLM charges its current fee for grazing on DOE lands.
DOD. In fiscal year 2004, the Army, Corps, Air Force, and Navy, offered
the majority of their leases as competitive bids. The bids ranged from
an average of $0.82 to $112.50 per AUM. Under the laws and regulations
for grazing on lands managed by the services, their lands may be leased
for up to 5 years and payment for a lease is generally to be fair
market value, although the payment can be made through services in-
kind. The DOD services may accept less than fair market value under
certain circumstances when it is determined that a public interest will
be served. For example, Army officials recently negotiated a new 5-year
lease for grazing at Fort Hood (in Texas) with a group of cattlemen
that included some previous landowners. The Army determined that,
although it had no legal obligation to continue leasing only to this
group, its relationship with the neighboring ranchers helped to sustain
its mission, meet its environmental stewardship responsibilities, and
maintain its good relations with the community. In April 2005, the Army
negotiated a grazing price that was 40 percent lower than the appraised
value, pending a new appraisal that explicitly considered the unique
military circumstances of grazing on the installation. The new
appraisal, completed in August 2005, valued the lease at a price per
animal unit that is 30 percent less than the fair market value assessed
for other, similar grazing parcels to account for such unique military
circumstances.
See appendix V for details of federal grazing fees charged by these
agencies.
Private Ranchers and State Land Agencies Generally Set Fees at Market
Values to Generate Revenues:
Fees charged by private ranchers and state land agencies are higher
than the BLM and Forest Service fees because, generally, ranchers and
state agencies seek to generate grazing revenues by charging a price
that represents market value for that land and/or the services
provided. The average fee private ranchers charged in 2004 in the 11
western states was $13.30 per AUM and $13.80 per head of
livestock,[Footnote 30] which represents market value, or the price
that ranchers are willing to pay and receive for privately owned
grazing lands in western states. This fee is determined annually
through USDA surveys of private ranchers in 17 western states and is
the average price ranchers (producers) reported as being paid in their
area for privately owned nonirrigated grazing land. The National
Agricultural Statistics Service calculates the average for each state,
as well as for the 9 Great Plains states and different combinations of
western states--11 western states, 16 western states, and 17 western
states.[Footnote 31] As shown in table 9, the average private grazing
fee for the states ranged from $8.00 per AUM in Arizona and Oklahoma to
$23.00 per AUM in Nebraska.
Table 9: Fees Charged by Private Ranchers and State Land Agencies in
2004:
State: Arizona;
State land agency (per AUM unless noted): $2.23;
Average private fee (per AUM)[A]: $8.00;
Average private fee (per head)[A]: $9.00.
State: California;
State land agency (per AUM unless noted): $1.35 to 12.50;
Average private fee (per AUM)[A]: $14.50;
Average private fee (per head)[A]: $15.50.
State: Colorado;
State land agency (per AUM unless noted): $6.65 to 8.91;
Average private fee (per AUM)[A]: $13.50;
Average private fee (per head)[A]: $14.00.
State: Idaho;
State land agency (per AUM unless noted): $5.15;
Average private fee (per AUM)[A]: $12.20;
Average private fee (per head)[A]: $12.60.
State: Kansas;
State land agency (per AUM unless noted): [B];
Average private fee (per AUM)[A]: $13.00;
Average private fee (per head)[A]: $13.50.
State: Montana;
State land agency (per AUM unless noted): $5.48 to 80.00;
Average private fee (per AUM)[A]: $15.90;
Average private fee (per head)[A]: $16.20.
State: Nebraska;
State land agency (per AUM unless noted): $16.00 to 28.00;
Average private fee (per AUM)[A]: $23.00;
Average private fee (per head)[A]: $25.20.
State: Nevada;
State land agency (per AUM unless noted): [B];
Average private fee (per AUM)[A]: $10.60;
Average private fee (per head)[A]: $12.00.
State: New Mexico;
State land agency (per AUM unless noted): $0.71 to 10.15 per acre;
Average private fee (per AUM)[A]: $9.70;
Average private fee (per head)[A]: $11.00.
State: North Dakota;
State land agency (per AUM unless noted): $1.73 to 19.69 per acre;
Average private fee (per AUM)[A]: $13.00;
Average private fee (per head)[A]: $13.50.
State: Oklahoma;
State land agency (per AUM unless noted): $7.00 to 16.00;
Average private fee (per AUM)[A]: $8.00;
Average private fee (per head)[A]: $8.50.
State: Oregon;
State land agency (per AUM unless noted): $4.32;
Average private fee (per AUM)[A]: $13.00;
Average private fee (per head)[A]: $12.50.
State: South Dakota;
State land agency (per AUM unless noted): $3.00 to 56.00 per acre;
Average private fee (per AUM)[A]: $17.60;
Average private fee (per head)[A]: $19.20.
State: Texas;
State land agency (per AUM unless noted): $4.16 to 12.50;
Average private fee (per AUM)[A]: $10.00;
Average private fee (per head)[A]: $9.80.
State: Utah;
State land agency (per AUM unless noted): $1.43 or 2.35;
Average private fee (per AUM)[A]: $11.80;
Average private fee (per head)[A]: $13.10.
State: Washington;
State land agency (per AUM unless noted): $5.41 or 7.76;
Average private fee (per AUM)[A]: $10.80;
Average private fee (per head)[A]: $10.80.
State: Wyoming;
State land agency (per AUM unless noted): $4.13;
Average private fee (per AUM)[A]: $13.90;
Average private fee (per head)[A]: $14.30.
Source: State agencies and National Agricultural Statistics Service
(data); GAO (analysis).
Note: The 11 western states used to calculate the BLM and Forest
Service fee are Arizona, California, Colorado, Idaho, Montana, Nevada,
New Mexico, Oregon, Utah, Washington, and Wyoming. The 9 Great Plains
states used to calculate the Forest Service grassland fee are Colorado,
Kansas, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota,
Texas, and Wyoming.
[A] The National Agricultural Statistics Service gathers data on fees
per AUM and per head. The per head fee is used in the PRIA fee and,
because of the way that BLM and the Forest Service measure AUMs for
billing purposes, corresponds to the fee per AUM charged by BLM and the
Forest Service.
[B] Kansas and Nevada do not have grazing on state trust lands and
therefore did not provide fee information.
[End of table]
In fiscal year 2004, state land agencies in 15 western states charged
grazing fees that ranged from $1.35 per AUM in California to $80 per
AUM in Montana and $0.71 per acre in New Mexico to $56 per acre in
South Dakota; 2 states did not charge fees because they do not have
grazing on state trust lands. As table 9 shows, most states charged
more than one fee: while 4 states charged a single fee for all of their
state lands, 2 states charged two fees and 9 states charged a range of
fees, depending on market rates or based on counties or areas with
variable vegetation. The agencies manage state trust lands to help pay
for schools; the lands were set aside for this purpose when each state
was created. Like the federal government, the western state agencies
lease their lands for grazing, among other uses. According to Interior
officials, unlike the federal government, the western state agencies
have a fiduciary responsibility to obtain revenues from grazing fees on
state trust lands to support schools and education systems.
Of the 15 state agencies charging fees, 6 agencies used competitive
methods to determine the fair market value of their lands in fiscal
year 2004; 6 used appraised prices or formulas to estimate the fair
market value of their lands; and 3 used only formulas that do not start
with a market price. Generally, the formulas adjusted the value of
private grazing lands for different factors, such as the lack of
fencing or water on state lands, or the price of beef. For example,
Wyoming based its grazing fee on the average of private lease rates, as
estimated by the Wyoming Agricultural Statistics Service, for the
previous 5 years. The rate was then adjusted to account for changing
resource conditions, market demand, and industry viability, and reduced
by 20 percent to reflect contributions made by the lessee. (See app. VI
for a discussion of the state fees.)
The Purpose of the BLM and the Forest Service Fee in Western States Is
Not to Recover Expenditures or to Charge Market Value; Different
Purposes Would Result in Different Fees:
As we noted in our 1991 report on the BLM and Forest Service grazing
fee, fees can vary depending on the purposes for which they are
charged.[Footnote 32] The BLM and Forest Service fee is set in
accordance with the policy of preventing economic disruption and harm
to the western livestock industry. The primary purpose of the BLM and
Forest Service fee is not to recover the agencies' administrative
expenses. Consequently, in fiscal year 2004, the agencies spent $132.5
million to manage their grazing programs and collected $17.5 million in
receipts, leaving a gap of about $115 million. If the purpose of the
fee were to recover expenditures and if each agency were to charge a
fee that recovered its expenditures, BLM would have had to charge up to
$7.64 per AUM, and the Forest Service would have had to charge up to
$12.26 per AUM in 2004, according to our analysis of the agencies'
estimated expenditures and the number of AUMs billed (7.6 million AUMs
for BLM and 6.1 million AUMs for the Forest Service). While many argue
that fees for grazing on federal lands should recover the agencies'
expenditures, some grazing advocates argue that agencies' expenses are
high and reflect inefficiencies and that the fee should not encourage
the agencies' inefficient practices.
The primary purpose of the BLM and Forest Service fee formula is also
not to achieve fair market value prices. Instead, the fee was designed
to reflect fees charged by private ranchers by including the forage
value index, while also adjusting the value to reflect the net costs of
conducting ranching business. It reflects net costs by including the
beef cattle price and producer prices indexes (a measure of the change
in income and production expenses). While initially, the base price
used in the formula represented what Congress and economists considered
fair market value, the adjustments included in the formula have
resulted in a fee that has not tracked private fees.[Footnote 33]
Consequently, while the fee charged by BLM and the Forest Service
fluctuated up and down, it decreased overall by about 40 percent from
$2.36 per AUM in 1980 for BLM and $2.41 per AUM for Forest Service to
$1.43 per AUM for both agencies in 2004. Private ranching fees
increased by 78 percent over the same period, from $7.53 per AUM to
$13.40 per AUM.[Footnote 34] The federal fee increased to $1.79 per AUM
in 2005. (See fig. 2.)
Figure 2: Grazing Fee BLM and the Forest Service Charged, 1980 to 2005:
[See PDF for image]
Notes: The fee formula is Fee = $1.23 x (FVI + BCPI - PPI)/100.
[End of figure]
In 1980, BLM and the Forest Service charged $2.36 per AUM and $2.41 per
AUM, respectively, or on average, $2.38 per AUM. Prior to 1981, the
agencies charged different fees for grazing--in 1979, they charged
$1.89 per AUM and $1.93 per AUM, respectively. In 1980, the agencies
used the PRIA formula to calculate their fees, but the formula produced
a fee of $2.77, and PRIA limited the annual increase in the fee to 25
percent. The different fees charged in 1980 were a result of the
agencies applying the 25 percent increase to their 1979 fees.
If the primary purpose of the formula were to produce a fee equal to
market value, the fee would likely not be the same as that charged on
private or state lands for two key reasons. First, because BLM and
Forest Service permits and leases are not bid competitively, the fees
associated with those permits and leases are not set in the market. In
lieu of a market for BLM and Forest Service grazing, the agencies could
estimate the value of their lands based on comparable properties.
However, it is generally recognized that private lands, which are
leased at market prices, are not often comparable to public lands
because the private lands have better forage and sources of water. The
quality of forage and availability of water on state lands are
considered more comparable to that on federal lands because the federal
government granted some of its lands to various states when they
entered the Union.[Footnote 35] In addition to differences in the
quality of soil, forage, and water resources, private grazing fees
differ from fees for public lands because private landowners often
provide services that are not provided on BLM and Forest Service lands.
For example, private landowners may provide daily livestock care--
watering, fencing, feeding, and veterinary care--as well as maintaining
fences, corrals, and water tanks. In addition, lessees of private land
can themselves lease the land to other users, such as hunters, and
generate revenue. Moreover, public access to private lands is limited,
whereas access to federal land is generally not limited. State agencies
also limit access to their lands, a factor that makes their lands less
comparable to BLM and Forest Service lands for purposes of setting
fees.
Second, market values are difficult to use for BLM and Forest Service
permits and leases because the prices ranchers have paid for their
private ranches often include the capitalized value of any associated
federal grazing permits and leases--called "permit value"--and
advocates state that ranchers have paid full market value for the
grazing permits and leases, albeit not in the form of a payment to the
government.[Footnote 36] Although Interior and USDA do not recognize
grazing permits and leases issued by BLM and the Forest Service as a
legal property right, the real estate market realizes the value of
holding these permits and leases. As a result, it is generally
recognized that while the federal government does not receive a market
price for its permits and leases, ranchers have paid a market price for
their federal permits or leases--by paying (1) grazing fees; (2) nonfee
grazing costs, including the costs of operating on federal lands, such
as protecting threatened and endangered species (i.e., limiting grazing
area or time); and (3) the capitalized permit value. Should the BLM and
Forest Service charge a grazing fee that reflects market values, the
ranchers' investments could be reduced accordingly, which complicates
the use of the market value of the permits and leases.
Because of these difficulties in estimating and using market value,
some grazing experts have suggested establishing a competitive bidding
process for federal permits and leases, as has been done for the
McGregor Range, an Air Force bombing range. BLM manages grazing on this
range using competitive bidding to set prices. In 2004, BLM received
fees ranging from $5.00 to $14.50 per AUM for several leases that it
offered at auction. (See app. V for more details.) Experts acknowledge,
however, that significant changes to the current grazing system would
be needed to allow competition, with uncertain results. In particular,
range experts and agency officials point out a potential increase in
administrative activities and expenditures for items such as changing
operators, start-up time, and law enforcement that could occur with
greater BLM and Forest Service involvement in competitive bidding. In
addition, some change in the preference system on BLM and Forest
Service lands might need to occur to allow competitive bidding.
However, some states have implemented a form of competitive bidding
while retaining preference. For example, New Mexico allows ranchers
with preference to meet the best offer that results from competing the
lease. Finally, range experts and agency officials point out that the
effect of competitive bidding on grazing receipts collected could, in
fact, reduce receipts because some allotments could be less competitive
than others, given their location and quality of resources. Others
stated that increased competition could reduce the economic
opportunities for some smaller permittees and lessees.
Concluding Observations:
It is difficult to identify the full cost of grazing on federal lands.
Many federal agencies have their own grazing programs, but other
agencies support grazing in carrying out their responsibilities.
Nevertheless, an analysis of federal expenditures and receipts provided
by the agencies demonstrates that BLM and the Forest Service are
spending much more on grazing than they are generating in receipts.
Moreover, the existence of permit value indicates that while ranchers
may have paid full value for grazing privileges, the agencies have not
captured these payments in their grazing fee. These shortfalls reflect
legislative and executive branch policies to support local economies
and ranching communities by keeping grazing fees low. BLM and the
Forest Service are charging a fee that supports this purpose.
The current fee for livestock grazing has not been changed
significantly since it was first established a quarter century ago,
largely because of controversy over the purpose of the fee and the role
of grazing in contributing to ranching economies and communities and in
degrading rangeland ecosystems. Although a budgetary analysis such as
the one we conducted does not consider economic, environmental, or
societal costs and benefits, it does demonstrate the need to
periodically reexamine programs to assess their relevance and relative
priority for a changing society, including how much of the program's
financing should be paid for by those who benefit most directly. Taking
a hard look at existing programs and carefully considering their goals
and their financing is a challenging task. However, faced with a
growing and unsustainable fiscal imbalance, the government cannot
accept all of its existing programs, policies, and activities as
"givens." Now, as in the 1990s, tightened federal budgets and a
persistent federal deficit create the need to examine federal programs
that spend more funds than they generate in receipts and to determine
whether the purposes of these programs warrant increasing user fees.
Although other federal agencies' grazing programs are much smaller than
BLM's and the Forest Service's, they demonstrate the application of
competitive and market-based approaches to charging user fees for
grazing programs and recovering some program expenditures. Depending on
the approach taken to set and implement a grazing fee for lands managed
by BLM and the Forest Service, the federal government could close the
gap that exists between those programs' grazing expenditures and
receipts. But any change in the current fee may necessitate that
Congress reconsider the purpose of the fee and policy trade-offs of
different fees. In addition, an evaluation of the difficulties of
implementing the chosen fee would need to be conducted in order to
understand the consequences for the agencies' programs and expenditures
and to deal fairly with such issues as preference and permit value.
Agency Comments:
We provided USDA, Commerce, DOD, DOE, Interior, and Justice with a
draft of this report for review and comment. Interior and the Forest
Service provided written comments (see apps. VII and VIII). DOD did not
provide official written comments, but the Air Force and Army provided
technical comments, which we incorporated as appropriate. DOE also did
not provide official written comments but provided technical comments,
which we incorporated as appropriate. Commerce and Justice did not have
comments on the draft report.
In its comments, Interior did not agree nor disagree with the findings
in the report. In general, the department stated that the report
accurately recognizes that differences in resource conditions and legal
requirements can cause variations in livestock grazing fees and pointed
out the difficulty in capturing the costs of grazing programs. However,
Interior stated that the report did not sufficiently discuss
significant indirect benefits from grazing to other BLM programs that
are difficult to quantify. We do not agree with this point. We believe
that the report presents the facts about BLM's grazing program as
described in many different documents BLM provided to us and as
discussed in multiple meetings. Interior also provided several specific
comments clarifying the text of the report. These comments and our
response can be found in appendix VII. In addition to its comments on
BLM's grazing program, the department enclosed technical comments on
the U.S. Fish and Wildlife Service and Reclamation programs, which we
incorporated as appropriate.
The Forest Service provided coordinated comments for USDA. The Forest
Service neither agreed nor disagreed with the findings in the report.
The agency stated that the report accurately recognizes that the Forest
Service fee is set in accordance with an executive order that maintains
the fee formula established in FLPMA, as amended by PRIA. Further, it
stated that the report accurately recognizes that the fee is not
related to the cost of Forest Service administration of the grazing
program. In addition to these comments, the Farm Services Agency and
the National Agricultural Statistics Service within USDA provided
technical comments, which we included as appropriate.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of this report
until 30 days from the date of this letter. At that time, we will send
copies of this report to interested congressional committees; the
Secretaries of Agriculture, Commerce, Defense, Energy, and the
Interior; the Attorney General of the United States; the Administrator
of the Environmental Protection Agency; the Director of the Office of
Management and Budget;
the directors of the 17 state land agencies; and other interested
parties. We will also make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site
at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions, please contact me at (202) 512-
3841 or nazzaror@gao.gov. Contact points for our Offices of Public
Affairs and Congressional Relations may be found on the last page of
this report. GAO staff who made major contributions to this report are
listed in appendix IX.
Signed by:
Robin M. Nazzaro:
Director, Natural Resources and Environment:
List of Requesters:
The Honorable Nick Rahall:
Ranking Minority Member:
Committee on Resources:
House of Representatives:
The Honorable Earl Blumenauer:
House of Representatives:
The Honorable Raúl Grijalva:
House of Representatives:
The Honorable Rush Holt:
House of Representatives:
The Honorable Jim McDermott:
House of Representatives:
The Honorable Christopher Shays:
House of Representatives:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
We provided information on the (1) extent of livestock grazing on, and
program purposes for, land managed by 10 federal agencies; (2) amount
spent in fiscal year 2004 by these agencies and other federal agencies
that have grazing-related activities, to manage livestock grazing on
public lands; (3) total receipts collected for grazing privileges by
the 10 federal agencies with grazing programs and the amounts disbursed
to counties, states, or the federal government; and (4) grazing fees
charged by the 10 federal agencies, western states, and private
ranchers, and the reasons for any differences among the fees.
We performed the majority of our work at the 10 federal agencies that
have programs to allow private ranchers to graze livestock on portions
of the land they manage. These agencies were the Department of the
Interior's (Interior) Bureau of Land Management (BLM), National Park
Service, U.S. Fish and Wildlife Service, and Bureau of Reclamation
(Reclamation); the U.S. Department of Agriculture's (USDA) Forest
Service; the Department of Defense's (DOD) Army, Army Corps of
Engineers (Corps), Air Force and Navy; and the Department of Energy
(DOE). We also performed work at other federal agencies that have
grazing-related activities. These agencies are Interior's U.S.
Geological Survey (USGS) and Solicitor's Office; USDA's Agricultural
Research Service;
Animal and Plant Health Inspection Service, Cooperative State Research,
Education and Extension Service, Farm Service Agency, National
Agricultural Statistics Service, Risk Management Agency, Natural
Resources Conservation Service, and Office of General Counsel; the
Environmental Protection Agency; the Department of Commerce's National
Marine Fisheries Service; and the Department of Justice.
To determine the purposes of livestock grazing programs managed by the
10 federal agencies, we reviewed authorizing legislation and agency
policies and regulations, and we interviewed agency headquarters and
field office officials. Through our review of legislation, policies,
and regulations, we determined that we would not include Alaska in our
analysis because it is treated differently under grazing law. We
identified field offices to visit with the goal of visiting as many
agencies as possible in an efficient manner. We visited at least one
field office for every agency except for the Corps, Navy, and DOE. We
visited BLM field offices in Medford, Oregon, and Las Cruces, New
Mexico; a Forest Service office in Santa Fe, New Mexico; the National
Park Service's Dinosaur National Monument in Colorado and Utah; U.S.
Fish and Wildlife Service's Klamath Basin Wildlife Refuge Complex in
northern California and southern Oregon; Reclamation's Albuquerque Area
Office in New Mexico; Cannon Air Force Base in Clovis, New Mexico; and
Fort Hood Army Installation in Killeen, Texas.
To determine the extent of grazing on land managed by the agencies, we
obtained agency data for 2004 on acres and animal unit months (AUM).
BLM maintains a centralized Rangeland Administration System that
formally tracks and reports acres and AUMs on its lands as well as on
other agencies' lands (e.g., DOE's Idaho National Laboratory and
various Reclamation locations) where it manages grazing activity on
behalf of these agencies. The Forest Service uses an information
system, called INFRA, to centrally track and formally report acres,
head months, and AUMs. To determine if the AUM and acreage data
produced by BLM's Rangeland Administration System and Forest Service's
INFRA system were sufficiently reliable for use in this report, we
interviewed system managers about the processes used to manage the data
in the systems and conducted a "walk-through" of the system with these
managers. In addition, we tested the completeness and accuracy of a
selection of AUM and acreage data using fiscal year 2004 system reports
at the BLM field and Forest Service offices. We asked field office
officials to provide us their 2004 report that specifically showed, by
permit or lease, the number of AUMs authorized and billed and the fee
charged. We reviewed all the files at agencies with smaller grazing
programs--those with up to 25 permits or leases at an office--and
selected 10 percent of files at the two agencies that had large grazing
programs--250 and 500 allotment files per office. We then verified that
the data in the systems were the same as data in the files by tracing
the data through actual permit and lease documents, bills, and receipts
showing that payment had been submitted. We determined--based on these
reviews and, if necessary, follow-up interviews with local managers--
that the data reported were reliable for purposes of this report.
Unlike BLM and the Forest Service, the National Park Service, U.S. Fish
and Wildlife Service, Reclamation, and DOD do not have similar
management information systems that formally track and centrally report
acres and AUM data on specific livestock grazing activities. For these
agencies, we collaborated with agency headquarters and field office
officials to design and test a data collection instrument tailored for
each agency, which we sent to field offices. To design and test the
data collection instruments, we visited several agencies' field offices
and followed the same process we used at BLM and the Forest Service to
sample files, review relevant documents, track AUM data, and interview
local officials to verify the completeness and accuracy of data that
they could submit to us. We performed this work at the Dinosaur
National Monument, Klamath Basin Wildlife Refuge Complex, Reclamation's
Albuquerque Area Office, Cannon Air Force Base, and Fort Hood Army
Installation. To help ensure the reliability of the data we received
from the agencies, we reviewed the data to determine whether they were
complete and accurate. When we found data that were missing or appeared
to be inaccurate, we called appropriate agency officials to discuss,
and if necessary, correct the data. Based on these reviews and
appropriate follow-up interviews, we determined that the data reported
were sufficiently reliable for purposes of this report.
To determine the expenditures the 10 federal agencies incurred in
fiscal year 2004 to manage specific livestock grazing on federal lands
they manage, total receipts collected for grazing privileges by these
agencies, and the amounts disbursed to counties, states, or the federal
government, we obtained agency expenditure, receipt, and disbursement
data for fiscal year 2004. BLM maintains an Activity Based Costing
System that centrally tracks and formally reports expenditures on
livestock grazing activities, the receipts that grazing generates, and
amounts disbursed. BLM officials used this system to identify the
amount of direct and indirect expenditures the agency incurred for
livestock grazing activities. The Forest Service does not have a cost-
accounting system, but rather reports expenditures for items in its
budget, called budget line items. The agency used expenditure reports
for these line items, in addition to its WorkPlan system (which shows
the forests' intended work plans at the beginning of a fiscal year) to
estimate the amount of expenditures on grazing activities in fiscal
year 2004. The Forest Service direct expenditures include expenditures
from the Forest Service grazing line item, expenditures from its
watershed and vegetation line item, and estimated expenditures from its
General Management and other cost pools. Because the watershed and
vegetation line item can be spent for all programs and not just the
grazing program, the Forest Service allocated a portion of these
expenditures--11 percent--using WorkPlan, which is a tool for planning
and budgeting program work at the forest level. The Forest Service uses
six cost pools to allocate indirect activities and expenditures:
General Management, Public Communications, Ongoing Business Services,
Common Services, Office of Worker's Compensation, and Unemployment
Compensation Insurance. The General Management pool and some of the
activities in the Common Services pool are considered direct or support
costs, rather than indirect costs. These are included as direct
expenditures. To estimate expenditures from its General Management and
other cost pools, the agency attributed a share of the expenditures
related to the amount of grazing and related watershed and vegetation
funds that were put into the fund for the fiscal year. We did not
validate the data provided by the agencies' or test their financial
management and accounting systems. We did contact USDA's and Interior's
Office of Inspector General and representatives of KPMG, a private
contractor that annually audits the agencies' financial statements, to
determine if there was any reason we could not use expenditure data in
this report. There were none. In addition, we reviewed the agencies'
internal controls over grazing receipts through our testing of the
agencies' grazing files and AUM data.
Unlike BLM and the Forest Service, the National Park Service, U.S. Fish
and Wildlife Service, Reclamation, and DOD services do not all formally
track and centrally report specific livestock grazing expenditures,
receipts, and disbursements. Using the same data collection instrument
described above to obtain acres and AUM data from these agencies' field
units, we also requested their estimates of expenditures and receipts.
In addition, we asked headquarters officials to query their financial
management and accounting systems in an effort to extract specific
receipt and disbursement data related to livestock grazing activities.
When necessary, we conducted follow-up interviews with agency
headquarters and field office officials to ensure that the data were
reliable enough for use in this report. We did not validate these
financial management and accounting systems.
To identify livestock grazing expenditures that other federal agencies
may incur to support livestock grazing, we first developed a list of
agencies and activities that are conducted that are related to grazing
on public lands. To develop this list, we reviewed reports about
livestock grazing on public lands, interviewed BLM and Forest Service
officials, and interviewed experts at the Society for Range
Management,[Footnote 37] as well as the author of a recent study on the
costs of the federal grazing program.[Footnote 38] We then contacted
the agencies to confirm that the activities they conduct are related to
grazing and are conducted on public lands; if the agencies conducted
activities that support grazing on public lands, we then requested
estimated expenditures for fiscal year 2004. To that end, we contacted
officials at USGS; USDA's Agricultural Research Service, Animal and
Plant Health Inspection Service, Cooperative State Research, Education,
and Extension Service, Farm Service Agency, National Agricultural
Statistics Service, Natural Resources Conservation Service, and Risk
Management Agency; and the Environmental Protection Agency. We asked
these officials to estimate, if possible, the expenditures they incur
in support of livestock grazing activities. To determine agency
expenditures on consultations for threatened and endangered species, we
requested the data from the two agencies involved, the U.S. Fish and
Wildlife Service and the National Marine Fisheries Service. To
determine agency expenditures for litigation related to livestock
grazing we contacted the Department of Justice, Interior's Office of
the Solicitor, and USDA's Office of General Counsel. Their
representatives estimated the cost of their time devoted to livestock
grazing cases in fiscal year 2004 and identified that no payments were
made for attorney fees in the same period. The National Park Service,
U.S. Fish and Wildlife Service, Reclamation, and DOD services reported
that they were not involved in any litigation related to livestock
grazing in fiscal year 2004.
To determine the fees charged in 2004 by the 10 federal agencies,
western states, and private ranchers and the reasons for any
differences among the fees, we relied on several different sources. For
the fees charged by BLM and the Forest Service, we contacted BLM and
Forest Service officials, who provided us with 2004 fee and an
explanation of the formula used to calculate the fee. We also discussed
the formula and its components with the staff of the National
Agricultural Statistics Service. We also reviewed historical studies of
the formula and fees resulting from the formula. We gathered National
Park Service, U.S. Fish and Wildlife Service, Reclamation, and DOD
service fees using the data collection instrument described above and
also gathered information on the methods used to establish the fees.
For agencies that provided fee data as a per-acre price, we converted
the fees to a per-AUM price by totaling the receipts and any offsets to
receipts and dividing the total by the number of AUMs approved for use
on that land. We reviewed agencies' discussion of their user fees in
their Chief Financial Officers' Annual Reports, but we did not review
the agencies' compliance with the Independent Offices Appropriation Act
or OMB Circular A-25, which lay out conditions under which user fees
can be charged.
To determine the fees that the 17 western states charged ranchers in
2004 to graze on their state lands, and the basis for their fees, we
conducted telephone interviews of program officials in the 17 states
using a semistructured interview format. To determine the fees private
ranchers charged in 2004 to graze on their private lands, we used the
results reported by USDA's National Agricultural Statistics Service,
which conducts a survey of, among other things, fees charged by private
ranchers for livestock grazing on their private lands in the 17 western
states. The agency's staff calculates average fees for each state and
the average fees charged in different groups of Great Plains and
western states: 9 Great Plains states, 11 western states, 16 western
states, and 17 western states. We also interviewed the National
Agricultural Statistics Service officials about the agency's survey
methodology for gathering data on private grazing leases and the
calculation of the BLM and Forest Service fee components.
To identify additional factors that should be considered in evaluating
federal grazing expenditures and fees, we conducted an extensive search
of studies that go beyond a limited federal budgetary analysis of
livestock grazing activities and attempted to identify social,
environmental, and other economic costs and benefits that both
advocates and opponents of grazing use to make their respective
arguments. We also interviewed experts at New Mexico State University,
Oregon State University, Colorado State University, and University of
Montana who have conducted relevant research to obtain their views of
these various livestock grazing issues, as well as issues related to
fees.
We conducted our work between August 2004 and July 2005 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Additional Factors in Evaluating Federal Grazing
Expenditures and Revenues:
To place the budgetary evaluation presented in this report in a larger
context, this appendix briefly discusses conflicting views on key
effects of federal lands grazing: local economic development, rural
community and quality of life values, and rangeland ecosystems and
management. The purpose of the appendix is to present the conflicting
views on grazing-related issues and as such we did not verify the
accuracy of the positions and statements presented by advocates and
opponents of grazing. A comprehensive analysis of the effects should
quantify and capture not only the budgetary expenditures and receipts
discussed in this report but also the impact on regional and local
economic development and the economic costs and benefits--which are
often unquantified--to society. However, a comprehensive evaluation is
not yet possible because, despite years of extensive research and
evaluation, the exact nature of many of these effects is still unknown,
unresolved, or unquantifiable. For example, opponents of grazing
believe that grazing diminishes ecosystem values by reducing
biodiversity and disrupting wildlife habitats, the lost value of which
is borne by the nation and future generations and which the federal
budget and agencies' budgets cannot entirely capture.[Footnote 39] On
the other hand, advocates of grazing believe that the government and
the public benefit from livestock grazing because it reduces the
federal government's cost for land management and contributes to
preserving open space, both values that the federal budget does not
capture.
Implications of Grazing for Local Economic Development:
According to grazing advocates, ranching on federal land is critical to
local economies, particularly in the western states, and many small
towns across the West that depend on local ranchers' business would not
survive without federal grazing. In these localities, many ranchers who
rely on public lands could be driven out of ranching because, without
access to public lands, their ranches would not be economically viable.
In addition, studies have shown that grazing is beneficial to rural
economies because it provides them with a more diverse economic base in
conjunction with other compatible land uses, such as recreational
activities.[Footnote 40] Advocates also note that while some economic
studies indicate that grazing on federal land is of minimal economic
importance, these studies only consider grazing's dependence on public
forage on an average annual basis and not on a seasonal basis. They
point out that ranchers rely on forage from federal lands during
certain parts of the year, particularly during the summer and fall
grazing season, and that ranchers' dependence on federal lands becomes
quite important when only the grazing season is taken into account.
In contrast, opponents point to studies showing that, for many of the
western states, federal lands provide only a small percentage of the
total forage needed to support ranchers' herds and do not contribute
significantly to local economic production and income. For example, one
study that examined the reliance of ranchers on federal land in 11
western states showed that only $1 of every $2,500 of income (0.04
percent) earned in those states is directly associated with grazing on
federal lands.[Footnote 41] This minimal contribution also holds steady
in more grazing-dependent counties, according to this study. Out of 102
such counties analyzed, only 11 were found to have more than 1 percent
of total income associated with grazing on public lands.
Implications of Grazing on Quality of Rural Communities and Rancher's
Life:
The budgetary evaluation of grazing on public lands does not reflect
the contribution of grazing to the quality of life in rural communities
as well as the contribution to individual ranchers' quality of life.
Advocates point to the value of preserving the tradition and culture of
rural ranching communities as an important contribution of grazing.
These advocates believe that because federal land grazing at current
rates provides the support ranchers need to stay in business, grazing
prevents a growing trend toward urbanization and sprawl in rural areas.
The development of ranch lands reduces the availability of open space
for scenic pleasure and recreational opportunities, reduces wildlife
habitat, and increases the infrastructure and tax burden on nearby
communities. Further, federal managers point out that their support of
ranchers and rural communities maintains a buffer around federal lands-
-for example, military lands--preventing development along these
boundaries.
Similarly, grazing advocates point out the importance of grazing to the
quality of life for individual ranchers, which is another factor not
captured by a budgetary analysis. Studies have documented the
importance of quality of life (consumptive value) in ranchers'
decisions to purchase or remain in business despite economic pressures.
These studies have compared the future earning potential of the land
from ranching with the market values for ranches in many rural
communities and found that ranchers have been willing to accept rates
of return on their investment that are below market value, which
indicates that the desire to own a ranch is not motivated entirely by
profit, but also by the less tangible benefit on the quality of life
that the rural lifestyle offers.[Footnote 42]
While the contribution of ranching to the quality of life and well
being of a segment of society is widely recognized, grazing opponents
question the role of the government in protecting ranchers' social or
economic way of life at a cost to all taxpayers. In the opponents'
view, preserving the heritage of "western cowboys" by allowing them the
use of public lands is a subsidy to the livestock industry. The
opponents question the use of continuing subsidies, rather than a
functioning free market, and question the choice of subsidizing one
lifestyle or chosen profession over another--for example, teachers.
Opponents also disagree with the argument that grazing subsidies are
essential to preserving open spaces and stopping development. They
point out that many factors, such as an individual rancher's wealth and
commitment to ranching as a way of life, will ultimately influence the
decision to continue ranching. Population growth and demand for housing
will widen the disparity in land values between grazing and development
and put some ranchers--especially those facing financial pressures--in
a position to sell. However, opponents note that the replacement of
cows with condominiums is not a foregone result of changes in grazing
policy. Subdividing and developing ranch land is primarily driven by
market conditions--demand--for the land, and market conditions for
subdividing the ranch lands is far from uniform across the West. For
example, it would not be economically feasible to develop lands in some
remote areas of the West. However, acknowledging the reality of
development of the ranch lands in some geographic areas, opponents
believe that subsidized grazing on public lands is neither an efficient
nor an effective means of preserving open spaces. They recommend other
tools, such as zoning regulations or land purchases through
conservation trusts, to more effectively protect the land from urban
sprawl and development.
Implications of Grazing for Rangeland Ecosystems and Management:
According to grazing advocates, ranchers are the principal managers of
federal land, and if they cease operation, federal agencies would have
to pay others to manage these lands, thereby raising budgetary costs to
the government. By grazing the land, ranchers help to maintain
rangeland ecosystems--particularly those east of the Rocky Mountains--
that developed historically and naturally with herbivory by wild
animals such as buffalo, antelope, deer, and elk. According to
advocates, grazing also helps to manage weeds, including invasive plant
species, and control fires by preventing excessive biomass buildup or
by reducing the intensity of fires that do start--expenses that would
otherwise shift to federal agencies. For example, advocates maintain
that sheep grazing reduces the need to use herbicides on the range
because the sheep eat noxious plants that other animals avoid.[Footnote
43] Advocates also contend that ranchers provide a valuable service to
federal agencies by reporting problems on public lands, such as fires
and illegal activities, and assisting in search-and-rescue operations.
Furthermore, grazing advocates assert that modern rangeland management
facilitates the maintenance and health of the land because ranchers
understand the science behind ranching and make decisions that preserve
and improve the health of the rangeland, including wildlife
habitat.[Footnote 44] In general, they point to the increased number of
wildlife and game animals in recent years on the lands with ranch and
water developments. For example, one study has shown that biodiversity
for vegetation and animals is higher on rangelands managed for grazing
than on small ranches.[Footnote 45] They say that water improvements
made by ranchers are the reason behind enhanced wildlife habitat and
numbers and contribute to lower maintenance costs by the
agencies.[Footnote 46]
To the contrary, grazing opponents argue that grazing has contributed
to, and increased the amount of, the federal government's land
management costs. For example, they note, by eliminating grass and low-
lying vegetation in ponderosa pine forests, grazing has contributed to
increased density of conifer trees and shrubs and made these forests
more prone to large, intense fires that are costly to fight. Grazing
opponents also note that grazing contributes to the spread of invasive
species, thereby increasing agencies' costs for managing their
rangelands. For example, opponents state that livestock transport
seeds; weaken and remove native plants, such as grasses; disturb the
soil; and help invasive species to take hold and grow.
Grazing opponents also note that grazing in general and overgrazing in
particular, have harmed plants and wildlife on federal lands by
exposing soils to erosion, disrupting normal wildlife behavior, and
reducing biodiversity. For example, an environmental group states that
grazing has contributed to the listing of 22 percent of federal
threatened and endangered species.[Footnote 47] Furthermore, livestock
can be detrimental to native wildlife because they can transmit
diseases, compete for food, disrupt normal behavior patterns, or damage
habitat.[Footnote 48] For example, because some invasive plants can
better tolerate intensive grazing than most native plants, they can
prosper and drive out other native plants. The U.S. Fish and Wildlife
Service has argued that grazing can cause habitat degradation and
disrupt normal behavior patterns of wildlife such as breeding, feeding,
or sheltering.[Footnote 49] For example, livestock management
practices, such as fencing rangelands, can create obstacles for many
native wildlife species, limiting their movement in search of food and
shelter. Similarly, livestock protection has played a large role in
eliminating native predators, which are often killed by private
ranchers or federal agencies to protect the livestock. Finally, the
opponents note that livestock grazing is also a threat to water quality
when, for example, the livestock trample stream banks, causing them to
erode and increase sedimentation or spread infectious water-borne
diseases to water supplies.[Footnote 50]
[End of section]
Appendix III: Detailed Grazing Data for Bureau of Land Management and
the Forest Service:
This appendix provides detailed information on grazing permits and
leases on lands managed by BLM and the Forest Service. The first
section of this appendix provides information on acres available for
grazing on lands the agencies manage, the AUMs approved for grazing,
and the AUMs billed in fiscal year 2004 for BLM and grazing year 2004
for the Forest Service. The second section categorizes BLM and Forest
Service permits and leases by size.
Acres and AUMs of Grazing:
This section provides a snapshot of the grazing that occurred on BLM
and Forest Service lands in 2004. The acres of BLM and Forest Service
land available for grazing each year can change, depending on the
results of environmental assessments conducted on grazing allotments;
and the amount of grazing that is allowed each year can change,
depending on annual assessments of forage and range conditions. Both
agencies measure the number of acres of their lands available for
grazing by allotment each year, but the two agencies use different
terms to measure the amount of grazing. BLM calls this amount "active"
or "authorized," and the Forest Service calls this amount "permitted."
Similarly, BLM refers to the amount of grazing that it bills for
annually--which can vary from the amount it authorizes because of range
or climate conditions--as "billed," and the Forest Service refers to
this amount of grazing as "authorized." We use the term "AUMs Approved"
to refer to the amounts of grazing authorized by BLM and permitted by
the Forest Service and "AUMs Billed" to refer to the amount of grazing
for which BLM billed ranchers and the amount of grazing authorized each
year on Forest Service lands. Table 10 shows the acres, AUMs approved,
and AUMs grazed for BLM's field offices in fiscal year 2004.
Table 10: BLM Data on Acres and AUMs, by Field Office for Fiscal Year
2004:
State: Arizona:
Arizona Strip;
Acres: 2,250,219;
AUMs approved: 179,463;
AUMs billed: 76,785.
Kingman;
Acres: 1,959,713;
AUMs approved: 141,983;
AUMs billed: 78,091.
Phoenix North;
Acres: 1,958,357;
AUMs approved: 117,487;
AUMs billed: 73,945.
Safford;
Acres: 1,114,283;
AUMs approved: 133,786;
AUMs billed: 86,636.
Tucson;
Acres: 481,936;
AUMs approved: 57,272;
AUMs billed: 35,754.
Yuma;
Acres: 190,348;
AUMs approved: 29,924;
AUMs billed: 2,751.
Subtotal;
Acres: 7,954,856;
AUMs approved: 659,915;
AUMs billed: 353,962.
State: California:
Alturas;
Acres: 361,107;
AUMs approved: 52,517;
AUMs billed: 26,943.
Arcata;
Acres: 27,904;
AUMs approved: 3,389;
AUMs billed: 2,137.
Bakersfield;
Acres: 243,757;
AUMs approved: 95,407;
AUMs billed: 23,981.
Barstow;
Acres: 612,013;
AUMs approved: 9,154;
AUMs billed: 5,873.
Bishop;
Acres: 307,036;
AUMs approved: 36,466;
AUMs billed: 9,416.
Eagle Lake;
Acres: 971,096;
AUMs approved: 51,937;
AUMs billed: 28,968.
El Centro;
Acres: 30,949;
AUMs approved: 2,047;
AUMs billed: 1,033.
Folsom;
Acres: 36,073;
AUMs approved: 5,184;
AUMs billed: 3,995.
Hollister;
Acres: 108,893;
AUMs approved: 27,958;
AUMs billed: 12,410.
Needles;
Acres: 631,222;
AUMs approved: 18,451;
AUMs billed: 3,695.
Palm Springs - South Coast;
Acres: 74,887;
AUMs approved: 3,790;
AUMs billed: 1,652.
Redding;
Acres: 27,716;
AUMs approved: 5,902;
AUMs billed: 5,811.
Ridgecrest;
Acres: 829,818;
AUMs approved: 15,680;
AUMs billed: 12,682.
Surprise;
Acres: 1,399,562;
AUMs approved: 92,335;
AUMs billed: 56,975.
Ukiah;
Acres: 10,290;
AUMs approved: 788;
AUMs billed: 650.
Subtotal;
Acres: 5,672,323;
AUMs approved: 421,005;
AUMs billed: 196,221.
State: Colorado:
Canyon Ancients National Monument;
Acres: 139,120;
AUMs approved: 9,241;
AUMs billed: 2,963.
Columbine;
Acres: 23,559;
AUMs approved: 2,598;
AUMs billed: 1,956.
Dolores;
Acres: 335,872;
AUMs approved: 23,052;
AUMs billed: 9,832.
Glenwood Springs;
Acres: 446,724;
AUMs approved: 45,806;
AUMs billed: 27,933.
Grand Junction;
Acres: 982,731;
AUMs approved: 112,829;
AUMs billed: 28,564.
Gunnison;
Acres: 349,141;
AUMs approved: 36,262;
AUMs billed: 14,198.
Kremmling;
Acres: 276,603;
AUMs approved: 35,317;
AUMs billed: 24,762.
La Jara;
Acres: 139,890;
AUMs approved: 13,386;
AUMs billed: 2,836.
Little Snake;
Acres: 1,231,411;
AUMs approved: 144,685;
AUMs billed: 70,339.
Pagosa Springs;
Acres: 2,841;
AUMs approved: 457;
AUMs billed: 276.
Royal Gorge;
Acres: 392,456;
AUMs approved: 33,674;
AUMs billed: 15,547.
Saguache;
Acres: 174,665;
AUMs approved: 17,149;
AUMs billed: 6,266.
Uncompahgre;
Acres: 668,685;
AUMs approved: 52,349;
AUMs billed: 19,049.
White River;
Acres: 1,428,982;
AUMs approved: 128,145;
AUMs billed: 86,548.
Subtotal;
Acres: 6,592,680;
AUMs approved: 654,950;
AUMs billed: 311,069.
State: Idaho:
Bruneau;
Acres: 1,392,635;
AUMs approved: 128,355;
AUMs billed: 94,329.
Burley;
Acres: 826,791;
AUMs approved: 140,823;
AUMs billed: 88,984.
Challis;
Acres: 660,597;
AUMs approved: 52,357;
AUMs billed: 28,568.
Cottonwood;
Acres: 88,852;
AUMs approved: 6,210;
AUMs billed: 5,237.
Four Rivers;
Acres: 1,063,834;
AUMs approved: 144,925;
AUMs billed: 95,414.
Jarbridge;
Acres: 1,480,906;
AUMs approved: 190,256;
AUMs billed: 140,764.
Owyhee;
Acres: 1,197,199;
AUMs approved: 123,071;
AUMs billed: 95,608.
Pocatello;
Acres: 532,269;
AUMs approved: 85,774;
AUMs billed: 66,790.
Salmon;
Acres: 427,273;
AUMs approved: 65,605;
AUMs billed: 44,035.
Shoshone;
Acres: 1,491,667;
AUMs approved: 208,121;
AUMs billed: 108,784.
Upper Snake River;
Acres: 1,593,666;
AUMs approved: 206,686;
AUMs billed: 130,030.
Subtotal;
Acres: 10,755,689;
AUMs approved: 1,352,183;
AUMs billed: 898,543.
State: Montana:
Billings;
Acres: 312,738;
AUMs approved: 55,044;
AUMs billed: 45,023.
Butte;
Acres: 228,267;
AUMs approved: 23,809;
AUMs billed: 17,313.
Dillon;
Acres: 793,268;
AUMs approved: 109,913;
AUMs billed: 63,888.
Glasgow;
Acres: 990,870;
AUMs approved: 144,782;
AUMs billed: 135,472.
Havre;
Acres: 564,309;
AUMs approved: 90,819;
AUMs billed: 69,894.
Lewistown;
Acres: 791,289;
AUMs approved: 125,777;
AUMs billed: 119,232.
Malta;
Acres: 1,040,872;
AUMs approved: 176,069;
AUMs billed: 155,459.
Miles City;
Acres: 2,712,286;
AUMs approved: 550,211;
AUMs billed: 490,444.
Missoula;
Acres: 80,703;
AUMs approved: 5,273;
AUMs billed: 5,190.
North Dakota;
Acres: 51,537;
AUMs approved: 9,216;
AUMs billed: 9,610.
South Dakota;
Acres: 272,392;
AUMs approved: 75,154;
AUMs billed: 66,658.
Subtotal;
Acres: 7,838,531;
AUMs approved: 1,366,067;
AUMs billed: 1,178,183.
State: New Mexico:
Carlsbad;
Acres: 1,891,062;
AUMs approved: 380,988;
AUMs billed: 229,359.
Farmington;
Acres: 1,171,014;
AUMs approved: 121,231;
AUMs billed: 75,075.
Las Cruces;
Acres: 4,299,298;
AUMs approved: 632,369;
AUMs billed: 355,623.
Rio Puerco;
Acres: 864,392;
AUMs approved: 132,469;
AUMs billed: 76,336.
Roswell;
Acres: 1,487,960;
AUMs approved: 328,005;
AUMs billed: 204,781.
Socorro;
Acres: 1,476,144;
AUMs approved: 229,544;
AUMs billed: 172,444.
Taos;
Acres: 343,225;
AUMs approved: 44,776;
AUMs billed: 20,760.
Subtotal;
Acres: 11,533,095;
AUMs approved: 1,869,382;
AUMs billed: 1,134,378.
State: Nevada:
Battle Mountain;
Acres: 6,174,963;
AUMs approved: 260,745;
AUMs billed: 168,679.
Carson City;
Acres: 3,340,103;
AUMs approved: 171,291;
AUMs billed: 69,430.
Elko;
Acres: 6,751,609;
AUMs approved: 708,016;
AUMs billed: 383,798.
Ely;
Acres: 10,412,518;
AUMs approved: 523,504;
AUMs billed: 177,090.
Las Vegas;
Acres: 166,391;
AUMs approved: 0[A];
AUMs billed: 2,311.
Tonopah;
Acres: 4,621,982;
AUMs approved: 130,435;
AUMs billed: 57,207.
Winnemucca;
Acres: 7,863,246;
AUMs approved: 335,494;
AUMs billed: 216,972.
Subtotal;
Acres: 39,330,812;
AUMs approved: 2,129,485;
AUMs billed: 1,075,487.
State: Oregon:
Andrews;
Acres: 1,635,153;
AUMs approved: 96,337;
AUMs billed: 71,972.
Ashland;
Acres: 115,388;
AUMs approved: 9,002;
AUMs billed: 7,233.
Baker;
Acres: 372,139;
AUMs approved: 50,117;
AUMs billed: 40,137.
Border;
Acres: 88,125;
AUMs approved: 12,161;
AUMs billed: 9,906.
Butte Falls;
Acres: 76,186;
AUMs approved: 5,100;
AUMs billed: 2,547.
Central Oregon;
Acres: 425,877;
AUMs approved: 64,348;
AUMs billed: 20,793.
Coos Bay;
Acres: 541;
AUMs approved: 49;
AUMs billed: 14.
Deschutes;
Acres: 543,228;
AUMs approved: 56,417;
AUMs billed: 26,630.
Jordan;
Acres: 2,507,713;
AUMs approved: 186,221;
AUMs billed: 154,751.
Klamath Falls;
Acres: 172,184;
AUMs approved: 13,401;
AUMs billed: 10,252.
Lakeview;
Acres: 2,865,315;
AUMs approved: 164,536;
AUMs billed: 111,535.
Malheur;
Acres: 2,070,694;
AUMs approved: 226,719;
AUMs billed: 158,352.
Roseburg;
Acres: 11,879;
AUMs approved: 743;
AUMs billed: 0.
Three Rivers;
Acres: 1,743,822;
AUMs approved: 153,086;
AUMs billed: 105,797.
Wenatchee;
Acres: 158,093;
AUMs approved: 19,810;
AUMs billed: 20,211.
Subtotal;
Acres: 12,786,337;
AUMs approved: 1,058,047;
AUMs billed: 740,130.
State: Utah:
Cedar City;
Acres: 1,853,636;
AUMs approved: 148,428;
AUMs billed: 66,747.
Fillmore;
Acres: 4,160,071;
AUMs approved: 262,063;
AUMs billed: 138,351.
Grand Staircase-Escalante National Monument;
Acres: 1,301,225;
AUMs approved: 75,544;
AUMs billed: 17,009.
Kanab;
Acres: 234,400;
AUMs approved: 18,416;
AUMs billed: 5,946.
Moab;
Acres: 1,559,695;
AUMs approved: 89,426;
AUMs billed: 28,837.
Monticello;
Acres: 1,991,216;
AUMs approved: 78,649;
AUMs billed: 35,707.
Price;
Acres: 1,921,523;
AUMs approved: 100,267;
AUMs billed: 35,568.
Richfield;
Acres: 2,126,747;
AUMs approved: 103,553;
AUMs billed: 45,484.
Salt Lake;
Acres: 2,215,951;
AUMs approved: 175,066;
AUMs billed: 116,318.
St. George;
Acres: 470,103;
AUMs approved: 28,428;
AUMs billed: 10,853.
Vernal;
Acres: 1,486,240;
AUMs approved: 149,493;
AUMs billed: 52,602.
Subtotal;
Acres: 19,320,807;
AUMs approved: 1,229,333;
AUMs billed: 553,422.
State: Wyoming:
Buffalo;
Acres: 734,825;
AUMs approved: 104,536;
AUMs billed: 99,081.
Casper;
Acres: 1,268,671;
AUMs approved: 183,046;
AUMs billed: 163,232.
Cody;
Acres: 653,735;
AUMs approved: 78,981;
AUMs billed: 30,229.
Kemmerer;
Acres: 1,449,185;
AUMs approved: 152,469;
AUMs billed: 111,661.
Lander;
Acres: 2,243,482;
AUMs approved: 275,961;
AUMs billed: 162,731.
Newcastle;
Acres: 284,741;
AUMs approved: 48,854;
AUMs billed: 47,733.
Pinedale;
Acres: 934,802;
AUMs approved: 106,574;
AUMs billed: 63,265.
Rawlins;
Acres: 3,044,835;
AUMs approved: 457,546;
AUMs billed: 267,651.
Rock Springs;
Acres: 3,553,435;
AUMs approved: 306,755;
AUMs billed: 137,876.
Worland;
Acres: 1,748,793;
AUMs approved: 236,064;
AUMs billed: 109,591.
Subtotal;
Acres: 15,916,504;
AUMs approved: 1,950,786;
AUMs billed: 1,193,050.
Total;
Acres: 137,701,634;
AUMs approved: 12,691,153;
AUMs billed: 7,634,445.
Source: BLM (data); GAO (analysis).
[A] Permits can be issued for ephemeral rangeland, which refers to
areas of the Hot Desert region that do not consistently produce enough
forage to sustain a livestock operation, but from time to time, produce
sufficient forage to accommodate livestock grazing. Such permits do not
have AUMs designated, but grazing is approved and billed.
[End of table]
Table 11 shows the acres of grazing available, approved AUMs, and
billed AUMs in grazing year 2004 for Forest Service administrative
offices and grasslands.[Footnote 51] The data on acres include acres in
active and vacant allotments but not allotments that have been closed
that are not available for grazing. The data on AUMs include data that
the Forest Service calls "head months." Unlike BLM, the Forest Service
uses two methods to tally the amount of grazing that occurs--AUMs and
head months. The agency uses the term AUM to refer to the amount of
forage grazed by livestock, while it uses the term head months to refer
to the number of livestock (head) that are grazed and that are subject
to billing. We used the Forest Service head month data because they are
equivalent to the BLM's data on AUMs, but we used the term AUM to
simplify the comparison with BLM and other agencies' grazing data.
Table 11: Forest Service Data on Acres and AUMs, by Forest and
Grassland, Grazing Year 2004:
Regions: Region 1, Northern Region:
Beaverhead-Deerlodge National Forest;
Acres[A]: 2,446,004;
AUMs approved[B]: 200,149;
AUMs billed[B]: 169,055.
Bitterroot National Forest;
Acres[A]: 227,390;
AUMs approved[B]: 4,546;
AUMs billed[B]: 3,017.
Idaho Panhandle National Forest;
Acres[A]: 78,453;
AUMs approved[B]: 5,208;
AUMs billed[B]: 5,208.
Clearwater National Forest;
Acres[A]: 179,257;
AUMs approved[B]: 9,339;
AUMs billed[B]: 6,167.
Custer National Forest;
Acres[A]: 687,942;
AUMs approved[B]: 164,343;
AUMs billed[B]: 150,927.
Dakota Prairie National Grasslands (includes Cedar River, Grand River,
Little Missouri, and Sheyenne National Grasslands);
Acres[A]: 1,250,080;
AUMs approved[B]: 517,929;
AUMs billed[B]: 56,927.
Flathead National Forest;
Acres[A]: 126,006;
AUMs approved[B]: 2,145;
AUMs billed[B]: 1,872.
Gallatin National Forest;
Acres[A]: 598,711;
AUMs approved[B]: 30,646;
AUMs billed[B]: 23,434.
Helena National Forest;
Acres[A]: 505,681;
AUMs approved[B]: 38,228;
AUMs billed[B]: 29,199.
Kootenai National Forest;
Acres[A]: 362,669;
AUMs approved[B]: 5,946;
AUMs billed[B]: 5,490.
Lewis and Clark National Forest;
Acres[A]: 844,064;
AUMs approved[B]: 75,990;
AUMs billed[B]: 56,502.
Lolo National Forest;
Acres[A]: 296,898;
AUMs approved[B]: 5,251;
AUMs billed[B]: 3,266.
Nez Perce National Forest;
Acres[A]: 665,191;
AUMs approved[B]: 35,753;
AUMs billed[B]: 27,845.
Subtotal;
Acres[A]: 8,268,346;
AUMs approved[B]: 1,095,473;
AUMs billed[B]: 538,909.
Regions: Region 2, Rocky Mountain Region:
Bighorn National Forest;
Acres[A]: 963,772;
AUMs approved[B]: 123,734;
AUMs billed[B]: 94,722.
Black Hills National Forest;
Acres[A]: 1,211,319;
AUMs approved[B]: 87,449;
AUMs billed[B]: 85,925.
Grand Mesa Uncompaghre Gunnison National Forest;
Acres[A]: 2,780,322;
AUMs approved[B]: 276,365;
AUMs billed[B]: 224,602.
Medicine Bow-Routt National Forest;
Acres[A]: 1,797,144;
AUMs approved[B]: 298,774;
AUMs billed[B]: 263,066.
Thunder Basin National Grassland;
Acres[A]: 722,494;
AUMs approved[B]: 138,360;
AUMs billed[B]: 136,250.
Nebraska National Forest (includes Fort Pierre National Grassland);
Acres[A]: 200,793;
AUMs approved[B]: 68,759;
AUMs billed[B]: 65,646.
Oglala and Buffalo Gap National Grasslands;
Acres[A]: 829,380;
AUMs approved[B]: 230,051;
AUMs billed[B]: 184,625.
Rio Grande National Forest;
Acres[A]: 1,560,430;
AUMs approved[B]: 86,516;
AUMs billed[B]: 69,530.
Arapaho-Roosevelt National Forest;
Acres[A]: 514,286;
AUMs approved[B]: 11,555;
AUMs billed[B]: 7,713.
Pawnee National Grassland;
Acres[A]: 198,041;
AUMs approved[B]: 82,445;
AUMs billed[B]: 28,025.
Pike-San Isabel National Forest;
Acres[A]: 1,125,780;
AUMs approved[B]: 27,148;
AUMs billed[B]: 15,740.
Cimarron and Comanche National Grasslands;
Acres[A]: 528,096;
AUMs approved[B]: 116,758;
AUMs billed[B]: 92,781.
San Juan National Forest;
Acres[A]: 2,012,944;
AUMs approved[B]: 141,230;
AUMs billed[B]: 97,290.
Shoshone National Forest;
Acres[A]: 1,227,788;
AUMs approved[B]: 51,836;
AUMs billed[B]: 35,691.
White River National Forest;
Acres[A]: 1,456,895;
AUMs approved[B]: 186,136;
AUMs billed[B]: 162,582.
Subtotal;
Acres[A]: 17,129,484;
AUMs approved[B]: 1,927,116;
AUMs billed[B]: 1,564,188.
Regions: Region 3, Southwestern Region:
Apache-Sitgreaves National Forest;
Acres[A]: 1,877,307;
AUMs approved[B]: 209,723;
AUMs billed[B]: 95,165.
Carson National Forest;
Acres[A]: 1,657,436;
AUMs approved[B]: 113,326;
AUMs billed[B]: 80,901.
Cibola National Forest (includes McClellan Creek National Grassland);
Acres[A]: 1,500,254;
AUMs approved[B]: 111,514;
AUMs billed[B]: 70,445.
Black Kettle, Kiowa, and Rita Blanca National Grasslands;
Acres[A]: 256,297;
AUMs approved[B]: 215,376;
AUMs billed[B]: 84,573.
Coconino National Forest;
Acres[A]: 1,707,982;
AUMs approved[B]: 168,932;
AUMs billed[B]: 115,549.
Coronado National Forest;
Acres[A]: 1,334,461;
AUMs approved[B]: 286,472;
AUMs billed[B]: 145,191.
Gila National Forest;
Acres[A]: 2,966,004;
AUMs approved[B]: 269,696;
AUMs billed[B]: 146,634.
Kaibab National Forest;
Acres[A]: 1,440,927;
AUMs approved[B]: 89,886;
AUMs billed[B]: 47,632.
Lincoln National Forest;
Acres[A]: 917,050;
AUMs approved[B]: 103,918;
AUMs billed[B]: 49,622.
Prescott National Forest;
Acres[A]: 1,215,178;
AUMs approved[B]: 128,531;
AUMs billed[B]: 26,219.
Santa Fe National Forest;
Acres[A]: 1,405,045;
AUMs approved[B]: 74,958;
AUMs billed[B]: 56,322.
Tonto National Forest;
Acres[A]: 2,629,757;
AUMs approved[B]: 279,697;
AUMs billed[B]: 40,804.
Subtotal;
Acres[A]: 18,907,698;
AUMs approved[B]: 2,052,029;
AUMs billed[B]: 959,057.
Regions: Region 4, Intermountain Region:
Ashley National Forest;
Acres[A]: 1,055,123;
AUMs approved[B]: 104,884;
AUMs billed[B]: 61,174.
Boise National Forest;
Acres[A]: 1,449,325;
AUMs approved[B]: 92,149;
AUMs billed[B]: 97,243.
Bridger-Teton National Forest;
Acres[A]: 2,254,437;
AUMs approved[B]: 372,658;
AUMs billed[B]: 191,925.
Dixie National Forest;
Acres[A]: 1,732,152;
AUMs approved[B]: 119,042;
AUMs billed[B]: 91,217.
Fishlake National Forest;
Acres[A]: 1,421,228;
AUMs approved[B]: 125,088;
AUMs billed[B]: 102,126.
Manti-LaSal National Forest;
Acres[A]: 1,311,426;
AUMs approved[B]: 252,396;
AUMs billed[B]: 190,391.
Payette National Forest;
Acres[A]: 1,009,796;
AUMs approved[B]: 167,577;
AUMs billed[B]: 97,117.
Salmon-Challis National Forest;
Acres[A]: 2,488,187;
AUMs approved[B]: 134,697;
AUMs billed[B]: 96,116.
Sawtooth National Forest;
Acres[A]: 1,710,407;
AUMs approved[B]: 294,025;
AUMs billed[B]: 198,056.
Caribou-Targhee National Forest;
Acres[A]: 2,329,740;
AUMs approved[B]: 481,826;
AUMs billed[B]: 423,713.
Curlew National Grassland;
Acres[A]: 47,790;
AUMs approved[B]: 21,501;
AUMs billed[B]: 20,153.
Humboldt-Toiyabe National Forest;
Acres[A]: 5,775,113;
AUMs approved[B]: 460,301;
AUMs billed[B]: 297,485.
Uinta National Forest;
Acres[A]: 648,861;
AUMs approved[B]: 202,044;
AUMs billed[B]: 167,569.
Wasatch-Cache National Forest;
Acres[A]: 873,177;
AUMs approved[B]: 150,696;
AUMs billed[B]: 129,417.
Subtotal;
Acres[A]: 24,106,762;
AUMs approved[B]: 2,978,884;
AUMs billed[B]: 2,163,702.
Regions: Region 5, Pacific Southwest Region:
Angeles National Forest;
Acres[A]: 30,250;
AUMs approved[B]: 14,917;
AUMs billed[B]: 0.
Cleveland National Forest;
Acres[A]: 113,775;
AUMs approved[B]: 4,606;
AUMs billed[B]: 2,135.
Eldorado National Forest;
Acres[A]: 407,562;
AUMs approved[B]: 7,403;
AUMs billed[B]: 7,403.
Inyo National Forest;
Acres[A]: 866,587;
AUMs approved[B]: 63,711;
AUMs billed[B]: 51,611.
Klamath National Forest (includes Butte Valley National Grassland);
Acres[A]: 708,640;
AUMs approved[B]: 19,372;
AUMs billed[B]: 17,521.
Lassen National Forest;
Acres[A]: 902,983;
AUMs approved[B]: 31,781;
AUMs billed[B]: 19,423.
Los Padres National Forest;
Acres[A]: 1,065,067;
AUMs approved[B]: 47,315;
AUMs billed[B]: 32,335.
Mendocino National Forest;
Acres[A]: 640,417;
AUMs approved[B]: 5,989;
AUMs billed[B]: 3,821.
Modoc National Forest;
Acres[A]: 3,832,197;
AUMs approved[B]: 126,206;
AUMs billed[B]: 97,737.
Six Rivers National Forest;
Acres[A]: 255,445;
AUMs approved[B]: 5,916;
AUMs billed[B]: 4,417.
Plumas National Forest;
Acres[A]: 645,888;
AUMs approved[B]: 27,883;
AUMs billed[B]: 19,774.
San Bernardino National Forest;
Acres[A]: 171,996;
AUMs approved[B]: 3,419;
AUMs billed[B]: 1,300.
Sequoia National Forest;
Acres[A]: 889,519;
AUMs approved[B]: 58,584;
AUMs billed[B]: 45,504.
Shasta Trinity National Forest;
Acres[A]: 130,059;
AUMs approved[B]: 9,659;
AUMs billed[B]: 2,637.
Sierra National Forest;
Acres[A]: 532,571;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Stanislaus National Forest;
Acres[A]: 633,764;
AUMs approved[B]: 26,703;
AUMs billed[B]: 42,969.
Tahoe National Forest;
Acres[A]: 495,063;
AUMs approved[B]: 32,617;
AUMs billed[B]: 25,344.
Lake Tahoe Basin Management Unit;
Acres[A]: 31,550;
AUMs approved[B]: 303;
AUMs billed[B]: 158.
Subtotal;
Acres[A]: 12,353,333;
AUMs approved[B]: 486,384;
AUMs billed[B]: 374,089.
Regions: Region 6, Pacific Northwest Region:
Deschutes National Forest;
Acres[A]: 602,687;
AUMs approved[B]: 9,507;
AUMs billed[B]: 4,772.
Fremont National Forest;
Acres[A]: 1,407,837;
AUMs approved[B]: 49,484;
AUMs billed[B]: 43,348.
Gifford Pinchot National Forest;
Acres[A]: 177,297;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Malheur National Forest;
Acres[A]: 1,627,719;
AUMs approved[B]: 118,539;
AUMs billed[B]: 92,810.
Mt Hood National Forest;
Acres[A]: 284,884;
AUMs approved[B]: 1,818;
AUMs billed[B]: 3,527.
Ochoco National Forest;
Acres[A]: 787,644;
AUMs approved[B]: 44,856;
AUMs billed[B]: 37,861.
Crooked River National Grassland;
Acres[A]: 112,357;
AUMs approved[B]: 16,930;
AUMs billed[B]: 7.
Olympic National Forest[C];
Acres[A]: 0;
AUMs approved[B]: 0;
AUMs billed[B]: 0.
Rogue River National Forest;
Acres[A]: 554,485;
AUMs approved[B]: 11,249;
AUMs billed[B]: 7,655.
Siskiyou National Forest;
Acres[A]: 157,422;
AUMs approved[B]: 462;
AUMs billed[B]: 379.
Siuslaw National Forest[C];
Acres[A]: 0;
AUMs approved[B]: 0;
AUMs billed[B]: 0.
Umatilla National Forest;
Acres[A]: 967,985;
AUMs approved[B]: 56,854;
AUMs billed[B]: 39,170.
Umpqua National Forest;
Acres[A]: 121,147;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Wallowa Whitman National Forest;
Acres[A]: 1,645,814;
AUMs approved[B]: 135,598;
AUMs billed[B]: 105,774.
Okanogan-Wenatchee National Forests;
Acres[A]: 1,675,338;
AUMs approved[B]: 87,957;
AUMs billed[B]: 51,473.
Willamette National Forest;
Acres[A]: 45;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Winema National Forest;
Acres[A]: 466,026;
AUMs approved[B]: 17,173;
AUMs billed[B]: 10,804.
Colville National Forest;
Acres[A]: 819,646;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Subtotal;
Acres[A]: 11,408,333;
AUMs approved[B]: 550,427;
AUMs billed[B]: 397,580.
Regions: Region 8, Southern Region:
NFS in Alabama National Forest;
Acres[A]: 1,763;
AUMs approved[B]: 452;
AUMs billed[B]: 169.
Chattahoochee-Oconee National Forest;
Acres[A]: 1,507;
AUMs approved[B]: 3,690;
AUMs billed[B]: 0.
National Forests in Florida;
Acres[A]: 44,866;
AUMs approved[B]: 600;
AUMs billed[B]: 600.
Kisatchie National Forest;
Acres[A]: 73,238;
AUMs approved[B]: 6,238;
AUMs billed[B]: 151.
National Forests in Mississippi;
Acres[A]: 2,724;
AUMs approved[B]: 577;
AUMs billed[B]: 84.
George Washington and Jefferson National Forests;
Acres[A]: 8,400;
AUMs approved[B]: 9,579;
AUMs billed[B]: 7,405.
Ouachita National Forest;
Acres[A]: 453,195;
AUMs approved[B]: 7,326;
AUMs billed[B]: 4,225.
Ozark-St Francis National Forest;
Acres[A]: 49,732;
AUMs approved[B]: 7,092;
AUMs billed[B]: 3,192.
National Forests in North Carolina;
Acres[A]: 291;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
National Forests in Texas (includes Caddo/Lyndon B. Johnson National
Grasslands);
Acres[A]: 39,342;
AUMs approved[B]: 4,404;
AUMs billed[B]: 3,449.
Subtotal;
Acres[A]: 675,058;
AUMs approved[B]: 39,958;
AUMs billed[B]: 19,275.
Regions: Region 9, Eastern Region:
Chippewa National Forest;
Acres[A]: 125;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Huron Manistee National Forest;
Acres[A]: 1,584;
AUMs approved[B]: N/A;
AUMs billed[B]: N/A.
Mark Twain National Forest;
Acres[A]: 42,777;
AUMs approved[B]: 15,341;
AUMs billed[B]: 13,630.
Wayne National Forest;
Acres[A]: 148;
AUMs approved[B]: 606;
AUMs billed[B]: 214.
Midewin National Tallgrass Prairie;
Acres[A]: 19,165;
AUMs approved[B]: 4,910;
AUMs billed[B]: 7,658.
Green Mountain and Finger Lakes National Forests;
Acres[A]: 5,438;
AUMs approved[B]: 8,942;
AUMs billed[B]: 7,042.
Monogahela National Forest;
Acres[A]: 6,203;
AUMs approved[B]: 4,917;
AUMs billed[B]: 5,267.
Subtotal;
Acres[A]: 75,440;
AUMs approved[B]: 34,716;
AUMs billed[B]: 33,811.
Total;
Acres[A]: 92,924,454;
AUMs approved[B]: 9,164,987;
AUMs billed[B]: 6,050,611.
Source: Forest Service (data); GAO (analysis).
Notes: The Forest Service has no Region 7.
N/A = Not available.
[A] Acres values include vacant and active acres for the Forest
Service.
[B] Although we use the term AUMs to simplify the comparison with BLM
data, we used the Forest Service's head month data for this table
because they are equivalent to BLM's AUM data.
[C] According to agency officials, the Forest Service permitted grazing
in Olympic and Siuslaw National Forests in the past, but grazing is no
longer permitted in these forests.
[End of table]
Permits and Leases by Size:
Because the number of AUMs per permit or lease can vary greatly, the
number of AUMs controlled by permittees or lessees also varies greatly.
Tables 12 through 16 show the number of BLM and Forest Service permits
and leases, and AUMs, by permit size. When considering the data, it
must be noted that multiple permits or leases may be contained on a
single allotment, just as one permit or lease may span multiple
allotments. It must also be noted that several operators may share one
permit or lease, just as one operator may possess multiple permits or
leases; therefore, the number of permits and leases does not
necessarily correlate to the total number of operators. Table 12 shows
the size of BLM permits and leases, using approved AUMs in fiscal year
2004. The data do not include permits and leases with less than 2
AUMs.[Footnote 52]
Table 12: Number of BLM Permits by Size, Fiscal Year 2004:
Size of permit or lease, AUMs[A]: 2 to 10;
Number of permits and leases: 1,266;
Total approved AUMs: 8,613.
Size of permit or lease, AUMs[A]: 11 to 100;
Number of permits and leases: 6,073;
Total approved AUMs: 267,368.
Size of permit or lease, AUMs[A]: 101 to 500;
Number of permits and leases: 5,551;
Total approved AUMs: 1,367,336.
Size of permit or lease, AUMs[A]: 501 to 1,000;
Number of permits and leases: 1,910;
Total approved AUMs: 1,354,380.
Size of permit or lease, AUMs[A]: 1,001 to 5,000;
Number of permits and leases: 2,556;
Total approved AUMs: 5,374,337.
Size of permit or lease, AUMs[A]: 5,001 to 10,000;
Number of permits and leases: 285;
Total approved AUMs: 1,929,577.
Size of permit or lease, AUMs[A]: Over 10,000;
Number of permits and leases: 143;
Total approved AUMs: 2,364,322.
Size of permit or lease, AUMs[A]: Total;
Number of permits and leases: 17,784;
Total approved AUMs: 12,665,933.
Source: BLM.
[A] We start with 2 AUMs because we recreated a table from a previous
GAO report. In that report, officials were concerned about the accuracy
of data for permits with 2 AUMs or less and considered all permits and
leases with more than 2 AUMs.
[End of table]
The Forest Service provided data on permit size for cattle and sheep in
regions 1 through 6, those regions with lands in western states. Table
13 shows the data for cattle, which do not include horses or other
livestock and do not include permits with fewer than 2 AUMs of grazing
for cattle.
Table 13: Number of Forest Service Cattle Permits by Size, Grazing Year
2004:
Size of permits, AUMs[A]: 2 to 10;
Number of permits: 26;
Total approved AUMs: 170.
Size of permits, AUMs[A]: 11 to 100;
Number of permits: 757;
Total approved AUMs: 43,071.
Size of permits, AUMs[A]: 101 to 500;
Number of permits: 2,199;
Total approved AUMs: 592,251.
Size of permits, AUMs[A]: 501 to 1,000;
Number of permits: 1,090;
Total approved AUMs: 773,293.
Size of permits, AUMs[A]: 1,001 to 5,000;
Number of permits: 1,170;
Total approved AUMs: 2,337,730.
Size of permits, AUMs[A]: 5,001 to 10,000;
Number of permits: 89;
Total approved AUMs: 604,806.
Size of permits, AUMs[A]: Over 10,000;
Number of permits: 34;
Total approved AUMs: 1,049,515.
Total;
Number of permits: 5,365;
Total approved AUMs: 5,400,836.
Source: Forest Service.
[A] The permit size groups start with 2 AUMs because we recreated a
table from a previous GAO report, and, in the past, officials were
concerned about the accuracy of data for permits with 2 AUMs or less.
[End of table]
Forest Service sheep permits are shown in table 14. For the purposes of
conversion, five sheep equal 1 AUM. In addition to the sheep, an
insignificant number of horses are included in the data because, in
some cases, permittees may keep a horse for herding the sheep.
Table 14: Number of Forest Service Sheep Permits by Size, Grazing Year
2004:
Size of permits, AUMs[A]: 50 to 500[B];
Number of Permits: 17;
Total approved AUMs: 4,680.
Size of permits, AUMs[A]: 501 to 1,500;
Number of Permits: 46;
Total approved AUMs: 46,876.
Size of permits, AUMs[A]: 1,501 to 5,000;
Number of Permits: 125;
Total approved AUMs: 406,865.
Size of permits, AUMs[A]: 5,001 to 15,000;
Number of Permits: 109;
Total approved AUMs: 969,131.
Size of permits, AUMs[A]: 15,001 to 25,000;
Number of Permits: 25;
Total approved AUMs: 471,869.
Size of permits, AUMs[A]: over 25,000;
Number of Permits: 13;
Total approved AUMs: 461,751.
Total;
Number of Permits: 335;
Total approved AUMs: 2,361,172.
Source: Forest Service.
[A] The permit size groups start with 2 AUMs because we recreated a
table from a previous GAO report. In that report, officials were
concerned about the accuracy of data for permits with 2 AUMs or less.
[B] This does not include permits with less than 50 AUMs.
[End of table]
For comparison purposes, the size of cattle and calf operations in the
United States is shown in table 15.
Table 15: Number of Cattle and Calf Operations and Percent of
Inventory, United States, 2004:
Number of head of cattle and calves: 1 to 49;
Number of operations: 618,750;
Percent of inventory: 11.3%.
Number of head of cattle and calves: 50 to 99;
Number of operations: 163,750;
Percent of inventory: 11.6%.
Number of head of cattle and calves: 100 to 499;
Number of operations: 178,530;
Percent of inventory: 35.4%.
Number of head of cattle and calves: 500 to 999;
Number of operations: 18,445;
Percent of inventory: 12.7%.
Number of head of cattle and calves: 1,000 to 1,999;
Number of operations: 6,300;
Percent of inventory: 7.8%.
Number of head of cattle and calves: 2,000 to 4,999;
Number of operations: 2,700;
Percent of inventory: 7.7%.
Number of head of cattle and calves: 5,000 to 9,999;
Number of operations: 580;
Percent of inventory: 3.9%.
Number of head of cattle and calves: 10,000 to 19,999;
Number of operations: 225;
Percent of inventory: 2.9%.
Number of head of cattle and calves: 20,000 plus;
Number of operations: 180;
Percent of inventory: 6.7%.
Total;
Number of operations: 989,460;
Percent of inventory: 100.0%.
Source: National Agricultural Statistics Service (data); GAO
(analysis).
[End of table]
The size of beef cow operations is shown in table 16.
Table 16: Number of Beef Cow Operations and Percent of Inventory,
United States, 2004:
Number of head of beef cows: 1 to 49;
Number of operations: 601,650;
Percent of inventory: 28.1%.
Number of head of beef cows: 50 to 99;
Number of operations: 95,650;
Percent of inventory: 19.1%.
Number of head of beef cows: 100 to 499;
Number of operations: 72,020;
Percent of inventory: 38.3%.
Number of head of beef cows: 500 to 999;
Number of operations: 4,030;
Percent of inventory: 7.8%.
Number of head of beef cows: 1,000 to 1,999;
Number of operations: 950;
Percent of inventory: 3.4%.
Number of head of beef cows: 2,000 to 4,999;
Number of operations: 280;
Percent of inventory: 2.1%.
Number of head of beef cows: 5,000 plus;
Number of operations: 50;
Percent of inventory: 1.2%.
Number of head of beef cows: Total;
Number of operations: 774,630;
Percent of inventory: 100.0%.
Source: National Agricultural Statistics Service (data); GAO
(analysis).
[End of table]
[End of section]
Appendix IV: Grazing Fee for Lands Managed by BLM and the Forest
Service:
Rangelands in the United States have been used for livestock grazing
since the expansion and settlement of the western frontier. Ranchers
have grazed livestock on lands managed by the Forest Service and its
predecessor since the late 1890s and on lands managed by BLM and its
predecessor since 1934. Historically, BLM and Forest Service fees were
established to achieve different objectives--either to recover
administrative expenses or to reflect livestock prices, respectively--
but the agencies began using the same approach to setting fees in 1969.
Over the years, the agencies, as well as outside entities, have
conducted numerous studies attempting to establish a grazing fee that
meets the objectives of multiple parties. The current fee for BLM and
the Forest Service's 16 western states is based on a formula that
estimates ranchers' ability to pay, and was established in 1978 based
on studies conducted in the 1960s and 1970s.[Footnote 53] This appendix
discusses the current fee, historical fees, and key grazing studies and
their findings.
Current Fee for BLM's and the Forest Service's Western States:
In 2004, the grazing fee for lands managed by BLM and the Forest
Service's 16 western states was $1.43 per AUM--or the amount of forage
needed to sustain a cow and her calf for 30 days.[Footnote 54] This fee
is set annually according to a formula established in the Public
Rangelands Improvement Act of 1978 (PRIA) and extended indefinitely by
Executive Order 12548. The formula is:
Fee = $1.23 x (FVI +BCPI - PPI)/100:
where $1.23 = the base value, or the difference between the costs of
conducting ranching business on private lands, including any grazing
fees charged, and public lands, not including grazing fees. The costs
were computed in a 1966 study that included 10,000 ranching businesses
in the western states.
FVI = Forage Value Index, or the weighted average estimate of the
annual rental charge per head per month for pasturing cattle on private
rangelands in 11 western states (Arizona, California, Colorado, Idaho,
Montana, New Mexico, Nevada, Oregon, Utah, Washington, and Wyoming)
divided by $3.65 per head month (the private grazing land lease rate
for the base period of 1964-68) and multiplied by 100.
BCPI = Beef Cattle Price Index, or the weighted average annual selling
price for beef cattle (excluding calves) in the 11 western states
divided by $22.04 per hundredweight (the beef cattle price per hundred
pounds for the base period of 1964-68) and multiplied by 100.
PPI = Prices Paid Index, for selected components from USDA's National
Agricultural Statistics Service's Index of Prices Paid by Farmers for
Goods and Services, adjusted by different weights (in parentheses) to
reflect livestock production costs in the western states [fuels and
energy (14.5), farm and motor supplies (12.0), autos and trucks (4.5),
tractors and self-propelled machinery (4.5), other machinery (12.0),
building and fencing materials (14.5), interest (6.0), farm wage rates
(14.0), and farm services (cash rent) (18.0)].
PRIA limited the annual increase or decrease in the resulting fee to 25
percent. It also established the fee formula for a 7-year trial period
and required that the effects of the fee be evaluated at the end of
that period. Although the fee formula under PRIA expired in 1986, the
use of the fee formula was extended indefinitely by Executive Order
12548. The executive order requires the Secretaries of the Interior and
Agriculture to establish fees according to the PRIA formula, including
the 25 percent limit on increases or decreases in the fee. In addition,
the order established that the fee should not be lower than $1.35 per
AUM.
As shown in figure 3, the formula results have been limited by the PRIA
and executive order constraints, but neither the formula results nor
the PRIA fee has mirrored fees charged for grazing on private lands.
Figure 3: Unconstrained Formula Results and PRIA Grazing Fee Compared
with Fees Charged on Private Lands:
[See PDF for image]
Note: In 1980, BLM and the Forest Service charged $2.36 per AUM and
$2.41 per AUM, respectively, or on average, $2.38 per AUM. Prior to
1981, the agencies charged different fees for grazing--in 1979, they
charged $1.89 per AUM and $1.93 per AUM, respectively. In 1980, the
agencies used the PRIA formula to calculate their fees, but the formula
produced a fee of $2.77, and PRIA limited the annual increase in the
fee to 25 percent. The different fees charged in 1980 were a result of
the agencies applying the 25 percent increase to their 1979 fees.
[End of figure]
According to different economic studies and our evaluation of the PRIA
fee structure in 1991, the fee is kept low by including the BCPI and
PPI, which are factors that take into account ranchers' "ability to
pay."[Footnote 55] Figure 4 shows the value of each PRIA component from
1979 through 2004.
Figure 4: Value of PRIA Grazing Formula Components, 1979 through 2004:
[See PDF for image]
[End of figure]
Table 17 shows the data used in the previous two figures for easier
reading of the numbers.
Table 17: PRIA Formula Data for 1979 through 2004 and Fee Results for
1980 through 2005:
Data year: 1979;
Private lands grazing fee: 7.53;
FVI: 206;
BCPI: 294;
PPI: 275;
Fee year: 1980;
Formula results: 2.77;
PRIA fee (constrained): [A].
Data year: 1980;
Private lands grazing fee: 7.88;
FVI: 216;
BCPI: 291;
PPI: 319;
Fee year: 1981;
Formula results: 2.31;
PRIA fee (constrained): 2.31.
Data year: 1981;
Private lands grazing fee: 8.83;
FVI: 242;
BCPI: 268;
PPI: 359;
Fee year: 1982;
Formula results: 1.89;
PRIA fee (constrained): 1.86.
Data year: 1982;
Private lands grazing fee: 8.36;
FVI: 229;
BCPI: 262;
PPI: 378;
Fee year: 1983;
Formula results: 1.39;
PRIA fee (constrained): 1.39.
Data year: 1983;
Private lands grazing fee: 8.85;
FVI: 242;
BCPI: 256;
PPI: 387;
Fee year: 1984;
Formula results: 1.37;
PRIA fee (constrained): 1.37.
Data year: 1984;
Private lands grazing fee: 8.86;
FVI: 243;
BCPI: 262;
PPI: 395;
Fee year: 1985;
Formula results: 1.35;
PRIA fee (constrained): 1.35.
Data year: 1985;
Private lands grazing fee: 9.17;
FVI: 251;
BCPI: 243;
PPI: 397;
Fee year: 1986;
Formula results: 0.93;
PRIA fee (constrained): 1.35.
Data year: 1986;
Private lands grazing fee: 8.5;
FVI: 233;
BCPI: 235;
PPI: 388;
Fee year: 1987;
Formula results: 0.98;
PRIA fee (constrained): 1.35.
Data year: 1987;
Private lands grazing fee: 8.54;
FVI: 234;
BCPI: 272;
PPI: 381;
Fee year: 1988;
Formula results: 1.54;
PRIA fee (constrained): 1.54.
Data year: 1988;
Private lands grazing fee: 8.75;
FVI: 240;
BCPI: 297;
PPI: 386;
Fee year: 1989;
Formula results: 1.86;
PRIA fee (constrained): 1.86.
Data year: 1989;
Private lands grazing fee: 8.87;
FVI: 243;
BCPI: 306;
PPI: 402;
Fee year: 1990;
Formula results: 1.81;
PRIA fee (constrained): 1.81.
Data year: 1990;
Private lands grazing fee: 9.22;
FVI: 253;
BCPI: 326;
PPI: 419;
Fee year: 1991;
Formula results: 1.97;
PRIA fee (constrained): 1.97.
Data year: 1991;
Private lands grazing fee: 9.66;
FVI: 265;
BCPI: 327;
PPI: 436;
Fee year: 1992;
Formula results: 1.92;
PRIA fee (constrained): 1.92.
Data year: 1992;
Private lands grazing fee: 10.03;
FVI: 275;
BCPI: 316;
PPI: 440;
Fee year: 1993;
Formula results: 1.86;
PRIA fee (constrained): 1.86.
Data year: 1993;
Private lands grazing fee: 10.2;
FVI: 279;
BCPI: 333;
PPI: 451;
Fee year: 1994;
Formula results: 1.98;
PRIA fee (constrained): 1.98.
Data year: 1994;
Private lands grazing fee: 10.3;
FVI: 282;
BCPI: 304;
PPI: 455;
Fee year: 1995;
Formula results: 1.61;
PRIA fee (constrained): 1.61.
Data year: 1995;
Private lands grazing fee: 11;
FVI: 301;
BCPI: 277;
PPI: 473;
Fee year: 1996;
Formula results: 1.29;
PRIA fee (constrained): 1.35.
Data year: 1996;
Private lands grazing fee: 10.7;
FVI: 293;
BCPI: 252;
PPI: 499;
Fee year: 1997;
Formula results: 0.57;
PRIA fee (constrained): 1.35.
Data year: 1997;
Private lands grazing fee: 11.3;
FVI: 310;
BCPI: 281;
PPI: 512;
Fee year: 1998;
Formula results: 0.97;
PRIA fee (constrained): 1.35.
Data year: 1998;
Private lands grazing fee: 11.8;
FVI: 323;
BCPI: 272;
PPI: 514;
Fee year: 1999;
Formula results: 1;
PRIA fee (constrained): 1.35.
Data year: 1999;
Private lands grazing fee: 11.9;
FVI: 326;
BCPI: 281;
PPI: 516;
Fee year: 2000;
Formula results: 1.12;
PRIA fee (constrained): 1.35.
Data year: 2000;
Private lands grazing fee: 12;
FVI: 329;
BCPI: 313;
PPI: 554;
Fee year: 2001;
Formula results: 1.08;
PRIA fee (constrained): 1.35.
Data year: 2001;
Private lands grazing fee: 12.6;
FVI: 345;
BCPI: 330;
PPI: 559;
Fee year: 2002;
Formula results: 1.43;
PRIA fee (constrained): 1.43.
Data year: 2002;
Private lands grazing fee: 13;
FVI: 356;
BCPI: 303;
PPI: 559;
Fee year: 2003;
Formula results: 1.23;
PRIA fee (constrained): 1.35.
Data year: 2003;
Private lands grazing fee: 13.4;
FVI: 367;
BCPI: 342;
PPI: 593;
Fee year: 2004;
Formula results: 1.43;
PRIA fee (constrained): 1.43.
Data year: 2004;
Private lands grazing fee: 13.8;
FVI: 378;
BCPI: 402;
PPI: 618;
Fee year: 2005;
Formula results: 1.99;
PRIA fee (constrained): 1.79.
Source: National Agricultural Statistics Service.
[A] In 1980, BLM and the Forest Service charged $2.36 per AUM and $2.41
per AUM, respectively, or on average, $2.38 per AUM. Prior to 1981, the
agencies charged different fees for grazing--in 1979, they charged
$1.89 per AUM and $1.93 per AUM, respectively. In 1980, the PRIA
formula produced a fee of $2.77, but PRIA limited the annual increase
in the fee to 25 percent. The different fees charged in 1980 were a
result of the agencies applying the 25 percent increase to their 1979
fees.
[End of table]
History of Western Grazing Fees:
Grazing fees have been charged for lands managed by the Forest Service
since 1906--9 years after grazing was authorized on forest reserves--
and for lands now managed by BLM since 1936, 2 years after the
enactment of the Taylor Grazing Act. Before 1906, livestock could graze
on federally managed lands for free, and livestock operators objected
to being charged. Originally, the fee charged by the Forest Service and
BLM was $0.05 per AUM for cattle, but the fee increased by 1968 to
$0.56 per AUM for Forest Service permits and $0.33 per AUM for BLM
leases and permits.
Until 1969, the approach used by the Forest Service and BLM for
establishing grazing fees differed. The original Forest Service fee was
based on the rental value of local, private grazing tracts, while the
original BLM fee was based on the agency's administrative expenses.
Beginning in the 1920s and continuing through 1968, the Forest Service
based its fee on beef and lamb prices, as determined through studies it
conducted. BLM (and its predecessor) also conducted studies of its fee
approach. In 1946, the year that BLM was created, one of these studies
supported the use of administrative expenses as a basis for the fee.
However, in 1951, BLM began increasing its fees, and in 1958, it
shifted its approach to one that was similar to the Forest Service
approach--that is, based on livestock prices. Throughout the 1960s, BLM
charged fees that factored in livestock prices. For example, the 1958
fee increased from $0.19 per AUM to $0.22 per AUM in 1959 and 1960, and
it decreased to $0.19 per AUM in 1961 and 1962, reflecting decreasing
livestock prices.
Since 1969, the Forest Service and BLM have used a uniform approach to
establish a grazing fee. After a 1960 study conducted for the Bureau of
the Budget--the predecessor of the OMB--by an interdepartmental grazing
committee, the Bureau set a new fee schedule for the agencies to
achieve fair market value for federal grazing permits and leases. An
extensive survey in 1966 of the western livestock industry, called the
Western Livestock Grazing Survey and Analysis, and a 1968 review of
that survey data determined that a fair market value for federal
grazing permits and leases would be $1.23 per AUM. The $1.23 per AUM
value equalizes the costs of conducting business between private ranch
lands and federal lands. It is based on the premise that the costs of
conducting grazing activities on federal lands should be competitive
and comparable to the costs on private land. Because the new fee, if
imposed all at once, would have increased Forest Service fees by $0.72
per AUM and BLM fees by $0.90 per AUM, a 10-year phase period was
scheduled.
Before the new fee could be implemented, drought and continued debate
caused several delays in the phase-in schedule, and in 1976, the
Congress passed the Federal Land Policy and Management Act (FLPMA),
which required the Secretaries of Agriculture and of the Interior to
conduct a study to establish a fee that was equitable both to the
United States and to holders of grazing permits and leases. The 1977
study, Study of Fees for Grazing Livestock on Federal Lands, written by
a task force of Forest Service and BLM officials,[Footnote 56]
evaluated several different formulas for setting a grazing fee. The
goal was to establish a fee that achieved multiple objectives,
including getting fair market value for the forage while also
reflecting the value of grazing to the rancher. The fee was also to
contain regular adjustments to account for changes in fair market value
over time.
On the basis of the 1977 study, Congress enacted PRIA with the task
force's recommended formula for a 7 year trial basis. The agencies
studied the effectiveness of the formula after 7 years, as required in
PRIA, and academic economists sought to establish better ways to set a
fee, but the use of the formula was extended indefinitely by executive
order and has remain unchanged. Two studies by the agencies, one in
1986 and its update in 1992, evaluated the components of the PRIA
formula and its results.[Footnote 57] The reports identified technical
issues with the formula, including the fact that the BCPI does not
include prices for calves--which are produced on western lands--and
does include fat cattle (cattle fattened on grain for slaughter), which
are not produced on western lands. The reports also noted that the PPI
does not include a cost of living component; components of farm origin
(feed, feeder livestock, seed, and fertilizer); or taxes; all of which
increases the weight of factors that are affected by inflation, such as
fuel costs. Finally, the reports identified the need to update the base
value ($1.23 per AUM) to reflect current market values rather than
1960s data.
Critics of the reports stated that the agencies did not evaluate the
effectiveness of the PRIA formula; disagreed with the agencies'
appraisal of private lands and fees; and identified incorrect
statistical indexing, such as using inflation factors instead of a
livestock-relevant factor. They also stated that the agencies failed to
recognize the different costs of operating on federal and private land.
According to the critics, one of these costs is the value of permits
and leases, which is included in the value of privately owned ranches.
The livestock industry believes that this value should be included in
the calculation of the $1.23 base value (subtracted out as a cost of
doing business).
In 1993, in response to a perceived need to increase fees to capture
the economic value of forage, another Forest Service and BLM study
examined the potential for an incentive-based grazing fee. The report
identified the "grazing fee dilemma" as one in which the federal
government is not receiving full market value for its forage, but as
one in which ranchers are paying full market value by paying (1) the
fee; (2) nonfee grazing costs (including costs for operating on federal
lands, i.e., complying with federal requirements like those for
endangered species habitat); and (3) investments in grazing permits and
leases.[Footnote 58] According to this study, the only way to determine
the fair market value of federal grazing permits and leases was through
competitive bidding, which would have its own set of administrative
expenses. In lieu of competitive bidding, according to this study, all
methods of estimating fair market value resulted in fees somewhere
between $3 and $5, and the base value of the formula should be
negotiated at some price in that range. The report also stated that
including BCPI and PPI in the grazing formula did not improve the
ability of the PRIA formula to track market prices, as anticipated in
1977, and that FVI would adequately update the grazing fee. This study
and report were used to inform efforts to reform grazing regulations in
1994.
In the late 1980s, agricultural economists examined livestock prices
and ranch revenue--the gross income from ranching--to assess the rate
of return on investments in cattle and sheep ranches. The economists
found that rates of return are relatively low compared with other
investments, but that land value has increased and kept ranchers
financially solvent. Furthermore, the net return in the ranching
industry--the value of production minus costs--is often negative. This
information was used to support federal legislation to change grazing
fees in 1997. The legislation proposed to change the fee to equal the
12-year average of the total gross value of production for beef,
multiplied by the 12-year average of the Treasury 6-month bill "new
issue" rate, divided by 12.[Footnote 59] The proposal was not enacted.
[End of section]
Appendix V: Examples of Other Federal Agency Grazing Fees:
This appendix illustrates the different grazing fees used by federal
agencies other than BLM and the Forest Service. It describes the
specific fees charged at two Air Force bases--one managed by the Air
Force and the other managed by BLM--an Army base, a national monument,
a national refuge, and a Reclamation project.
Melrose Air Force Range, Cannon Air Force Base, New Mexico:
Melrose Air Force Range, located in eastern New Mexico, is a more than
66,000 acre site used by the Air Force to train pilots. It consists of
an 8,800 acre target area and 57,000 acres of land surrounding the
target area that acts as a buffer. The land is divided into 13 grazing
areas, each of which has fencing and a water supply provided by a
system of pipelines and water tanks. The target area lands were
acquired from local ranchers in the 1950s, and the remaining area was
acquired in the 1980s. Because the lands were acquired from local
ranchers, the Air Force granted a special waiver in March 2002 to allow
noncompetitive leasing to the former owners. Air Force policy allows
waivers of competition under certain conditions, including offers of
first lease of land to former owners.
In fiscal year 2002, when many of the range's leases were renewed, the
fee charged for grazing was $1.60 per acre of land (about $5.30 per
AUM). The waiver of competition contained a condition that the lease
fee was to be based on a market rate determined by real property
specialists. To establish a market-based grazing fee, the Air Force
real estate staff developed comparable lease information for other
grazing land in the vicinity and set an equivalent price. One source
used for pricing information was a local agricultural land appraiser
and the other was a Web site identified by the local BLM office that
contained lease rates for the state. The prices remain the same for the
5-year term of the lease, when they will be reestablished. In mid-2003
and all of 2004, Cannon Air Force Base halted grazing on Melrose Range
because of drought conditions that affected much of New Mexico and the
southwestern United States. The ranchers received credits for the
months that their cattle did not graze.
McGregor Range, New Mexico:
McGregor Range in southern Otero County, New Mexico, is a 694,981 acre
area that contains a bombing range used by the Air Force to train
pilots, who practice bombing targets within the range. The land within
McGregor Range has mixed ownership and management, including 608,385
acres (87 percent) of public land managed by BLM but withdrawn from
public use, 71,083 acres (about 10 percent) owned in fee title by the
Army, and 17,864 acres (3 percent) managed by the Forest Service.
In 1999, the Congress enacted the Military Lands Withdrawal Act,
renewing the withdrawal of public lands comprising the McGregor Range
for military use but requiring BLM to plan and manage use of the lands
in accordance with the principles of multiple use and sustained yield
required by FLPMA. While accommodating the military's continued use of
the range, BLM manages other activities on the range, including
livestock grazing, habitat management, fire prevention and control, and
recreation, such as hunting. BLM's Las Cruces Field Office in New
Mexico administers livestock grazing on 271,000 acres of land. The area
is divided into 14 grazing units available for grazing contract,
primarily for cattle.
In contrast to the fee charged on other BLM and Forest Service lands,
BLM manages livestock grazing permits on McGregor Range using
competitive bidding to establish its grazing fee. BLM sets a minimum
bid and then holds an annual public auction, where all bidders meet and
openly submit their offers. As a result, in September 2004, BLM
received winning bids ranging from $5.00 to $14.50 per AUM to graze
cattle on designated grazing units for the 9-month grazing season
ending in June 2005. BLM expects the McGregor Range grazing program to
be self-sustaining through competitive bidding for grazing units. BLM
staff for McGregor Range consist of one rangeland management
specialist, one range technician, and one maintenance worker. Revenues
from the grazing leases allow BLM employees to monitor the number of
cattle on the range and manage roads, fences, corrals, and water
pipelines. The livestock owners manage and provide care for the cattle,
including salt, minerals, and veterinary services. According to BLM
officials, additional services provided on the range by BLM result in a
higher minimum bid, and BLM is able to attract higher bids compared to
other livestock grazing areas.
Fort Hood Army Installation, Texas:
Fort Hood, located in central Texas, is a 217,000-acre Army
installation, the majority of which is used for military training
activities, including tank and other armored vehicle training
exercises. The Army allows a certain level of grazing on about 197,000
acres of the installation, having determined that grazing would not
interfere with the installation's primary training mission. The
majority of the installation's lands were acquired from private
landowners. Some of the original landowners formed a group, called the
Central Texas Cattlemen's Association, which has continued leasing the
land since 1954. In 2005, upon lease renewal, the Assistant Secretary
of the Army (Installations and Environment) determined to offer the
group a noncompetitive lease, provided that the installation obtain a
fair market value for the lease. The Corps--the Army's leasing agent--
had recommended that the lease be competitively bid, but it also
acknowledged that a transition to competitive leasing may be needed.
The Army determined that while it had no legal obligation to continue
leasing to the group, the relationship with the neighboring ranchers
contributed to the Army's ability to sustain its mission, discharge its
environmental stewardship responsibilities, and maintain its standing
in the community.
In 2005, the Army renegotiated a lease with the Central Texas
Cattlemen's Association, charging a price of $4.67 per AUM ($56 per
animal unit, per year), plus the installation's administrative and
management expenses. The Army agreed to adjust the number of animal
units based on a new forage assessment and an evaluation of training
intensity and the consequent effects on forage. The Army also agreed to
conduct a new appraisal that considers factors that are unique to
managing grazing on a military installation, such as lack of fencing,
presence of endangered species, and restricted access to the
installation. Although a land appraisal was conducted in 2004 and
determined the price of the new lease to be $7.83 per AUM, Army
officials agreed with the Association to discount this value by 40
percent for April 1, 2005, through August 31, 2005, because the
appraisal did not explicitly consider the military unique circumstances
that, according to Army officials, lead to higher grazing costs on Army
lands. The 40-percent figure was based on a figure used in a 1996
appraisal, although the U.S. Army Audit Agency questioned the
adjustment in a 2001 audit report.[Footnote 60] The Army received a new
appraisal on August 12, 2005, that has a price of $5.66 per AUM ($68
per animal unit, per year) when adjusted for military unique
circumstances. It will use this new amount as the basis of the fee for
the remainder of the 5-year lease period. In addition to these
agreements, the Cattlemen's Association agreed to pay $102,000 for
estimated administrative expenditures owed in the new lease and agreed
to reimburse actual expenditures when the Army presents evidence of
actual expenditures at the end of the lease year. Army staff estimated
their 2005 expenditures to be $285,000.
Dinosaur National Monument, Colorado and Utah:
Dinosaur National Monument, located in northwestern Colorado and
northeastern Utah, was created to protect a large deposit of dinosaur
fossils and later expanded to protect the river corridors of the Green
and Yampa rivers. The monument, which occupies 210,000 acres of desert
habitat, permits grazing on monument lands to ranchers that have
historically held grazing rights. Several ranchers with grazing rights
own land within the boundaries of the monument, called inholdings,
while several other ranchers with grazing rights own land adjacent to
the monument. In fiscal year 2004, monument staff authorized 1,794 AUMs
on 67,120 acres using seven special use permits.
In 2004, the monument charged $1.43 per AUM--the price for grazing on
BLM lands. National Park Service regulations specific to the monument
direct that the grazing fees at the monument shall be the same as those
approved for the BLM.[Footnote 61] The National Park Service is
statutorily authorized to recover the costs of administering special
use permits; however, a monument official said that they have never
charged such a fee because of the more specific regulations that
determine the monument's fee.
Klamath Basin National Wildlife Refuge Complex, California and Oregon:
The U.S. Fish and Wildlife Service's Klamath Basin National Wildlife
Refuge Complex is part of the wetland and lake system of the Klamath
Basin of northern California and southern Oregon and provides habitat
for numerous birds along the Pacific flyway during spring and fall
migrations. In 1905, Reclamation began to convert wetlands in the basin
into agricultural lands. The refuge complex is comprised of six refuges
that were established between 1908 and 1978 to conserve wetlands as a
preserve and breeding ground for birds and animals. The refuge is also
managed to allow appropriate agricultural uses of land. Klamath Basin
refuge managers authorize grazing on 17,046 acres of the basin to allow
adjacent ranchers access to forage on refuge lands and to reduce
certain grasses, thereby improving the habitat of the birds that use
the refuges.
In fiscal year 2004, the refuge charged different fixed amounts ranging
from $5.00 to $6.55 per AUM for grazing on three federal refuges in the
Klamath Basin complex-Clear Lake, Lower Klamath, and Upper Klamath.
U.S. Fish and Wildlife Service regulations require that fees charged
for the grant of privileges and for the sale of all products taken from
refuge areas, including forage, be equivalent to the fees charged by
private owners in the vicinity of the refuge. Refuge officials said
that the fees were negotiated in the 1980s and have remained unchanged.
However, they stated that the fees are appropriate because the refuges
receive benefits from grazing for wildlife habitat and forage and
permittees must meet specific limitations on their use of refuge lands.
For example, in one case involving the Clear Lake National Wildlife
Refuge, when water levels decrease significantly and expose Native
American archaeological sites, one rancher incurs significant
expenditures (e.g., temporary fencing, temporary water sources, and a
herder) to keep cattle away.
Fresno Reservoir and Reclamation's Milk River Project, Montana:
Fresno Reservoir, located in north-central Montana, is part of
Reclamation's Milk River Project, which provides irrigation water to
about 121,000 acres of land. Reclamation acquired excess land
surrounding Fresno Reservoir when it built the Fresno Dam; the
reservoir was originally planned to be higher and would have flooded
more land. As a result, Reclamation allows grazing on the strip of land
surrounding the reservoir. The area office conducts grazing on over
24,000 acres of land near Fresno Reservoir, and allows grazing on over
27,000 acres of land managed by two irrigation districts on Reclamation
land within the greater Milk River Project. Revenue from the grazing
receipts goes into either the Reclamation Fund or is credited to
divisions within the Milk River Project.
In fiscal year 2004, the Montana Area Office charged between $8.25 and
$25.10 per AUM for numerous grazing permits and leases within the Milk
River Project. To establish these fees, the area office used three
types of market-based methods, including competitive, limited
competitive, and negotiated. For all permits and leases, the area
office set a minimum bid based on the market value for permits and
leases in the area, and then discounted the rate for factors such as
lack of fencing on Reclamation lands. The area office then offered the
majority of project permits and leases for competitive bid using a
sealed bid process. For parcels with limited access, the area office
limited competition to the adjacent landowners, giving them equal
opportunity to bid on the permits and leases. Much of the land within
the Milk River Project is surrounded by private land, and therefore the
Reclamation land has limited public access. For a few permits and
leases, the area office used what it called a negotiated method to
establish the grazing fee. In these cases, in which only one rancher
has access to a site, the area office offered each permit or lease to
the rancher at the minimum bid, allowing the rancher to accept or
reject the bid.
[End of section]
Appendix VI: Western State Grazing Fees and Formulas:
As this appendix discusses, the 17 western states vary considerably in
the fees charged for state lands and the methods used to set those
fees. These states' land offices manage more than 46 million acres of
trust lands, of which more than 37 million acres were grazed in fiscal
year 2004,[Footnote 62] bringing in grazing revenues of more than $40.7
million.
Upon statehood, most western states, as well as several other states
throughout the nation, received lands from the federal government to be
held in trust to generate revenue for public education. The Land
Ordinance of 1785 initiated a program to reserve certain lands within
each western township to support public schools in that township. In
1848, the federal government doubled the lands granted to western
states, and it did so again by 1910, with the accession of Utah,
Arizona, and New Mexico to statehood.[Footnote 63]
According to many state officials that we interviewed, many state trust
lands are comparable in range condition, productivity, and land value
to federal lands. For example, in some states, such as Wyoming and
Oklahoma, state lands are intermingled with or adjacent to federal
lands; thus the native characteristics of the lands are similar. In
some cases, however, federal and state lands are not comparable. For
example, in Oregon much of the federal land is forested, while much of
the state land is rangeland.
Generally, the states charge a fee per AUM. In fiscal year 2004, the
western states charged grazing fees ranging from a low of $1.35 per AUM
for some lands in California to $80 per AUM in parts of Montana. As
shown in table 18, the majority of the western states use a market or
market-based approach to set grazing fees. Specifically, six states
(Montana, Nebraska, New Mexico, North Dakota, Oklahoma, and South
Dakota) offer their leases to the highest bidder through a competitive
process, and six states (Arizona, California, Colorado, Texas,
Washington, and Wyoming) use market-based approaches that rely on
regional market rates, land appraisals, or formulas that adjust the
market price for grazing by factors that account for differences
between state and private lands and livestock market conditions. Three
states (Idaho, Oregon, and Utah) use formulas that do not start with a
market price for private lands, but instead use either a base fee,
adjusted for livestock market and other factors, or a fixed percentage
of livestock production value. Two states, Nevada and Kansas, allow
some grazing on lands managed by other state agencies, but they do not
allow grazing on state trust lands and are therefore not included in
this appendix.
Table 18: Information on State Lands Used for Grazing, Revenues, and
Fee-Setting Approach in 17 Western States, Fiscal Year 2004A:
State: Arizona;
State lands managed (acres): 9,300,000;
State lands allocated for grazing (acres): 8,300,000;
Total revenue from state lands: $145,600,000;
Total revenue related to grazing: $2,200,000;
Grazing fee: (per AUM unless noted): $2.23;
Approach to setting fee: Market-based appraisal with annual adjustment.
State: California;
State lands managed (acres): 470,000;
State lands allocated for grazing (acres): 13,000;
Total revenue from state lands: $6,200,000;
Total revenue related to grazing: $8,000;
Grazing fee: (per AUM unless noted): $1.35 to 12.50;
Approach to setting fee: Market based on average rates; fee varies by
county.
State: Colorado;
State lands managed (acres): 3,000,000;
State lands allocated for grazing (acres): 2,400,000;
Total revenue from state lands: $36,450,000;
Total revenue related to grazing: $4,730,000;
Grazing fee: (per AUM unless noted): $6.65 to 8.91;
Approach to setting fee: Market-based formula; fee varies by region.
State: Idaho;
State lands managed (acres): 2,400,000;
State lands allocated for grazing (acres): 1,900,000;
Total revenue from state lands: $65,560,000;
Total revenue related to grazing: $1,630,000;
Grazing fee: (per AUM unless noted): $5.15;
Approach to setting fee: Formula similar to federal fee.
State: Kansas[B];
State lands managed (acres): [B];
State lands allocated for grazing (acres): [B];
Total revenue from state lands: [B];
Total revenue related to grazing: [B];
Grazing fee: (per AUM unless noted): [B];
Approach to setting fee: No grazing on state land office lands.
State: Montana;
State lands managed (acres): 5,100,000;
State lands allocated for grazing (acres): 4,250,000;
Total revenue from state lands: $75,700,000;
Total revenue related to grazing: $5,500,000;
Grazing fee: (per AUM unless noted): $5.48 to 80.00;
Approach to setting fee: Market with minimum bid ($5.48 per AUM).
State: Nebraska;
State lands managed (acres): 1,450,000;
State lands allocated for grazing (acres): 1,200,000;
Total revenue from state lands: $20,000,000;
Total revenue related to grazing: $10,000,000;
Grazing fee: (per AUM unless noted): $16.00 to 28.00;
Approach to setting fee: Market with minimum bid (minimum fee varies by
region).
State: Nevada[C];
State lands managed (acres): 3,000;
State lands allocated for grazing (acres): 0;
Total revenue from state lands: [C];
Total revenue related to grazing: [C];
Grazing fee: (per AUM unless noted): [C];
Approach to setting fee: No grazing on state land office lands.
State: New Mexico;
State lands managed (acres): 9,000,000;
State lands allocated for grazing (acres): 8,700,000;
Total revenue from state lands: $278,700,000;
Total revenue related to grazing: $7,630,000;
Grazing fee: (per AUM unless noted): $0.71 to 10.15; (per acre);
Approach to setting fee: Market with minimum bid ($4.22 per AUM).
State: North Dakota;
State lands managed (acres): 710,000;
State lands allocated for grazing (acres): 690,000;
Total revenue from state lands: $4,600,000;
Total revenue related to grazing: $Unknown[D];
Grazing fee: (per AUM unless noted): $1.73 to 19.69; (per acre);
Approach to setting fee: Market with minimum bid (minimum fee varies by
tract).
State: Oklahoma;
State lands managed (acres): 745,000;
State lands allocated for grazing (acres): 500,000;
Total revenue from state lands: $9,800,000;
Total revenue related to grazing: $Unknown[D];
Grazing fee: (per AUM unless noted): $7.00 to 16.00;
Approach to setting fee: Market with minimum bid (minimum fee varies by
region).
State: Oregon;
State lands managed (acres): 1,570,000;
State lands allocated for grazing (acres): 640,000;
Total revenue from state lands: $620,000;
Total revenue related to grazing: $300,000;
Grazing fee: (per AUM unless noted): $4.32;
Approach to setting fee: Formula based on production factors.
State: South Dakota;
State lands managed (acres): 770,000;
State lands allocated for grazing (acres): 750,000;
Total revenue from state lands: $3,000,000;
Total revenue related to grazing: $2,250,000;
Grazing fee: (per AUM unless noted): $3.00 to 56.00; (per acre);
Approach to setting fee: Market with minimum bid ($9.00 per AUM).
State: Texas;
State lands managed (acres): 750,000;
State lands allocated for grazing (acres): 550,000;
Total revenue from state lands: $365,000,000;
Total revenue related to grazing: $1,200,000;
Grazing fee: (per AUM unless noted): $4.16 to 12.50;
Approach to setting fee: Market-based appraisals.
State: Utah;
State lands managed (acres): 3,500,000;
State lands allocated for grazing (acres): 3,000,000;
Total revenue from state lands: $52,500,000;
Total revenue related to grazing: $440,000;
Grazing fee: (per AUM unless noted): $1.43 or 2.35;
Approach to setting fee: Formula that is similar to federal fee
formula.
State: Washington;
State lands managed (acres): 3,000,000;
State lands allocated for grazing (acres): 850,000;
Total revenue from state lands: $210,000,000;
Total revenue related to grazing: $650,000;
Grazing fee: (per AUM unless noted): $5.41 or 7.76;
Approach to setting fee: Market-based formula for leases or based on
production factors for permits.
State: Wyoming;
State lands managed (acres): 3,600,000;
State lands allocated for grazing (acres): 3,500,000;
Total revenue from state lands: $92,900,000;
Total revenue related to grazing: $4,180,000;
Grazing fee: (per AUM unless noted): $4.13;
Approach to setting fee: Market-based formula.
State: State lands managed (acres): 45,400,000;
State lands allocated for grazing (acres): 37,200,000;
Total revenue from state lands: $1,366,600,000;
Total revenue related to grazing: $40,700,000;
Grazing fee: (per AUM unless noted): $1.35 to 80.00.
Source: State agencies (data); GAO (analysis).
Note: Numbers may not total due to rounding.
[A] The western states predominantly maintain grazing data by fiscal
year. However, several states (Colorado, Idaho, North Dakota, Oklahoma,
Oregon, South Dakota, and Washington) maintain some grazing data by
fiscal year and some by calendar year.
[B] Kansas does not manage any grazing on state trust lands.
[C] The Nevada Division of State Lands within the Nevada Department of
Conservation and Natural Resources does not manage any grazing on its
lands. While other state offices in Nevada do manage grazing on state
lands, we did not collect these data.
[D] North Dakota and Oklahoma do not know total grazing revenue because
they do not separate grazing revenue from crop revenue.
[End of table]
The states provided details about their approaches to setting grazing
fees, as well as information on their lands and revenues collected.
Arizona: In Arizona, the annual rental rate for grazing land is
required to be the true value rental rate determined by the Arizona
State Land Commissioner based on the recommendations of the grazing
land valuation commission. In fiscal year 2004, the Arizona State Land
Department charged $2.23 per AUM for grazing on lands that it manages.
In 1996 the department appraised the true value of forage on trust land
using the market and income approaches. According to Arizona officials,
yearly adjustment to the appraised value is made based upon a factor
that is the ratio between the 5 year new and old average prices of
beef, as compiled by USDA's National Agricultural Statistics Service.
Upon renewal, if multiple applications are filed for a lease, the
current lessee can match competing bids. The department manages more
than 9.3 million acres of land, of which more than 8.3 million acres
were allocated for grazing in fiscal year 2004. Total grazing receipts
in fiscal year 2004 were about $2.2 million.
California: Upon receiving an application to lease lands, the
California State Lands Commission is to appraise the lands and fix the
annual rent; the total amount of the rental should not be in excess of
the fair market value of the lands. In fiscal year 2004, the commission
charged a range of fees, from $1.35 to $12.50 per AUM, for grazing on
the lands that it manages. The commission establishes the grazing fees
by calculating an average rate based on the rates charged by county
agriculture commissioners or assessors and agricultural extension
offices. If the total grazing fee for a lease is less than $500, as is
often the case, a minimum rental fee of $500 per year is applied. The
commission manages about 470,000 acres of surface land, of which almost
13,000 acres were allocated for grazing in fiscal year 2004. Total
grazing receipts in fiscal year 2004 were about $8,000.
Colorado: The Colorado State Board of Land Commissioners is to include
lease rates that will promote sound stewardship and land management
practices, long-term agricultural productivity, and community
stability. In 2004, the state board charged between $6.65 and $8.91 per
AUM for grazing on lands that it manages, depending on the region. The
state board sets grazing fees on the basis of a 2004 statewide survey
of private lease rates. The grazing fee is calculated for each region
based on the average rate identified by the survey, then reduced by 35
percent to account for differences, such as fencing or water, between
private and state lands. Each year since 2001, the state board has
determined whether the fee should be adjusted up or down by 3 percent,
depending on the Beef Price Index. The state board manages about 3
million acres of state land, of which about 2.4 million acres were
allocated for grazing in 2004. Total grazing receipts in fiscal year
2004 were about $4.7 million.
Idaho: The Idaho State Board of Land Commissioners may lease any
portion of the state land at a rental amount fixed and determined by
the board. In 2004, the Idaho Department of Lands charged $5.15 per AUM
for grazing on the lands that it manages. The board sets the grazing
fee using a formula based on livestock market factors. The formula
establishes the forage value for a given year based on four factors:
the (1) forage value index for 11 western states; (2) beef cattle price
index for 11 western states; (3) prices paid index for 11 western
states; and (4) Idaho forage value index. The formula is then applied
to a base value of $1.70, which was established in 1993 by the board.
If the department receives more than one application for a lease, then
it auctions the lease. The department manages about 2.4 million acres
of land, of which about 1.9 million were allocated for grazing in
fiscal year 2004. Total grazing receipts in fiscal year 2004 were about
$1.6 million.
Montana: The Trust Land Management Division of the Montana Department
of Natural Resources and Conservation must lease tracts to the highest
bidder unless the Board of Land Commissioners determines that the bid
is not in the state's best interest, and the board may not accept a bid
that is below full market value. The division used competitive bidding
to collect between $5.48 and $80.00 per AUM for grazing on the lands
that it manages in fiscal year 2004. If no bids are received, then the
division issues the lease or permit at the minimum rate, which was
$5.48 per AUM in fiscal year 2004, set by a fee formula. The formula
establishes the minimum fee by multiplying the average price per pound
for beef cattle in Montana by a multiplier of 7.54. The division
manages about 5.1 million acres of land, of which more than 4.2 million
acres were allocated for grazing in fiscal year 2004. Total grazing
receipts in fiscal year 2004 were about $5.5 million.
Nebraska: In Nebraska, all school land is subject to lease at fair
market rental as determined by the Board of Educational Lands and
Funds. In fiscal year 2004, the board used competitive bidding to
collect between $16 and $28 per AUM for grazing on the lands that it
manages. The board sets minimum grazing fees by geographic area. It
uses a formula that multiplies the available AUMs by private sector
rates, and then adjusts the resulting per-acre rents downward to
reflect fence and water improvements, which the lessees must provide.
The board uses three data sources to determine private sector rates:
(1) verified private sector rental contracts collected by its
employees, (2) a questionnaire that the board sends to professional
farm and ranch managers who have mandatory fiduciary responsibility to
the landowners they represent, and (3) an annual study conducted by the
University of Nebraska. The board gives the private contracts the most
weight when determining the grazing fee. If more than one qualified
bidder is interested in the lease, it is sold to the party bidding the
highest cash bonus at auction. The board manages more than 1.4 million
acres, of which about 1.2 million acres were allocated for grazing in
fiscal year 2004. Total grazing receipts in fiscal year 2004 were about
$10 million.
New Mexico: In New Mexico, the Commissioner of Public Lands is to make
rules and regulations for the control, management, disposition, lease,
and sale of state lands. In fiscal year 2004, the New Mexico State Land
Office charged a minimum of $4.22 per AUM for grazing on lands that it
manages, and collected between $0.71 and $10.15 per acre, based on
competitive bidding. Absent a competitive bid, the state land office
sets an annual grazing fee using a formula that multiplies a base value
of $0.0474 by the carrying capacity of the land, the acreage, and the
Economic Variable Index. This index is the ratio of the value of a
state land office adjustment factor for that year to the value of that
same adjustment factor calculated for the base year, 1987. The state
land office manages about 9 million acres, of which about 8.7 million
acres were allocated for grazing in fiscal year 2004. Total grazing
receipts in fiscal year 2004 were about $7.6 million.
North Dakota: In North Dakota, the Board of University and School Lands
is required to set the minimum rental for uncultivated and cultivated
lands, which it sets for the purpose of public auction using a
procedure called "the fair market value method," which it promulgated
in 1989. In fiscal year 2004, the North Dakota State Land Department
collected between $1.73 and $19.69 per acre, based on competitive
bidding at public auction, on grazing lands that it manages. The
department accepts bids over a minimum fee that is set for each tract
based on a county-by-county survey completed annually by USDA's
National Agricultural Statistics Service. The department manages about
710,000 acres, of which about 690,000 acres were allocated for grazing
in fiscal year 2004. The department does not know the total revenue
related to grazing collected in fiscal year 2004 because they do not
separate grazing and cropland revenues.
Oklahoma: In Oklahoma, rentals are required to be determined by public
auction. In 2004, the Oklahoma Commissioners of the Land Office used
competitive bidding to collect between $7 and $16 per AUM for grazing
on lands that it manages. The land office sets a minimum grazing fee
based on appraisals, and the grazing leases are then auctioned and
awarded to the highest bidder. The land office manages about 745,000
acres, of which about 500,000 were allocated for grazing in 2004. The
land office does not know the total revenue related to grazing
collected in fiscal year 2004 because it does not separate grazing and
cropland revenues.
Oregon: The Oregon Department of State Lands may lease common school
grazing lands subject to terms and conditions it sets or are otherwise
legislated. In 2004, the department charged $4.32 per AUM for grazing
on lands that it manages, using a formula that considers livestock
production factors. The formula multiplies the (1) animal gain per
month, fixed at 30 pounds; (2) marketable calf crop, fixed at 80
percent; (3) the state share of the calf crop, fixed at 20 percent; and
(4) average statewide calf sales price for the preceding year, from
USDA's Oregon agricultural price data. This annual rental is determined
by multiplying the AUM rental rate by the average annual base rate
forage capacity in AUMs of each leasehold and should be at least $100.
The department is currently reconsidering Oregon's grazing fee formula
and is comparing the formula with the grazing fee formulas in
surrounding states. The department manages almost 1.6 million acres, of
which about 640,000 acres were allocated for grazing in 2004. Total
grazing receipts in fiscal year 2004 were about $300,000.
South Dakota: In South Dakota, the Commissioner of School and Public
Lands is to establish the minimum annual rental rate per acre, which is
the rate at which bidding starts. In 2004, the South Dakota Office of
School and Public Lands used competitive bidding to collect between $3
and $56 per acre on lands that it manages. The commissioner of the
office sets a minimum grazing fee, $9 per AUM in 2004, using a formula
that multiplies the nonweighted 5-year average price per pound of all
calves sold in South Dakota by 425 pounds, the average calf weight. The
number is then divided by 12 months and multiplied by a percentage set
by the commissioner, 25 percent in 2004. Once the minimum fee per AUM
is established, the office divides the fee by the land's annual
carrying capacity in order to establish a minimum per acre opening bid.
The office manages about 770,000 acres, of which about 750,000 acres
were allocated for grazing in 2004. Total grazing receipts in fiscal
year 2004 were about $2.25 million.
Texas: The Texas General Land Office is to award leases to the highest
responsible bidder. In fiscal year 2004, the land office charged
between $4.16 and $12.50 per AUM for grazing on lands that it manages.
For the most part, grazing fees are based on fair market value within
the region. Staff members within the land office conduct on-site
evaluations of state lands to assess the value of the lands and forage
as a basis for the grazing fee, taking into consideration productivity,
range condition, improvements, and location, among other factors. For
those state lands without public access, the grazing fees may be
negotiated based on the appraised rate with the adjacent landowner. The
land office manages almost 750,000 acres, of which almost 550,000 acres
were allocated for grazing in fiscal year 2004. Total grazing receipts
in fiscal year 2004 were about $1.2 million.
Utah: The Director of the Utah School and Institutional Trust Lands
Administration is required to base the grazing fee on the fair market
value of the permit. In fiscal year 2004, the Utah School and
Institutional Trust Lands Board of Trustees used a formula to charge
$1.43 or $2.35 per AUM for grazing on lands that it manages. The board
initially used the federal fee as the base rate for the state fee, but
it now establishes the state fee by adjusting the previous year's fee
up or down, based on the 7-year trend of local prices for cattle,
sheep, wool, and hay. The fees on state trust lands are typically about
60 to 90 cents more than the federal grazing fee: $2.25 in fiscal year
2004 plus a fee of 10 cents for weed and insect control. When a permit
is up for renewal, ranchers or other interested parties, in addition to
the current lessee, can submit bonus bids on the permit, but the
current lessee has the right to match the bonus bid. On lands gained
through land exchanges with the federal government, the federal grazing
fee applies: $1.43 per AUM in fiscal year 2004. The Utah School and
Institutional Trust Lands Administration is proposing that the Utah
fees be increased over the next 3 to 5 years using a two-fee structure
that will increase the fee to $3.80 per AUM on trust lands that are
intermingled with BLM lands and to $7 per AUM on other trust lands. The
board manages about 3.5 million acres of land, of which about 3 million
acres were allocated for grazing in fiscal year 2004. Total grazing
receipts in fiscal year 2004 were about $440,000.
Washington: The Washington State Department of Natural Resources has
responsibility for issuing rules for the grazing of livestock and is to
charge such fees as it deems adequate and advisable. In 2004, the
Washington State Department of Natural Resources charged $5.41 per
AUM[Footnote 64] for range permits and $7.76 per AUM for grazing leases
on lands that it manages. Range permits provide only the right to
forage over a large area of land for a limited period of time each
year, whereas grazing leases provide full leasehold rights, including
control of the land. The fee for the range permits is set by a formula
that considers several factors, including average livestock weight gain
and livestock prices. The fee for the grazing leases is based on a 5-
year rolling average of private fees, adjusted downward to account for
higher operating costs on state lands, since the state provides no
fences or other on-site services. The department manages about 3
million acres of trust lands, of which almost 850,000 acres were
allocated for grazing in 2004. Total grazing receipts from range
permits and grazing leases in fiscal year 2004 were almost $650,000.
Wyoming: In Wyoming, the rental of any lease awarded is to be based on
an economic analysis and must reflect at least the fair market value
for the same or similar use of the land based upon a formula adopted by
the Board of Land Commissioners. In fiscal year 2004, the Wyoming
Office of State Lands and Investments charged $4.13 per AUM for grazing
on lands that it manages. The grazing fee is established by a formula
that multiplies the average private land lease rate per AUM for the 5
years preceding the current year, as estimated by the Wyoming
Agricultural Statistics Service, by the 5-year weighted average parity
ratio for beef cattle, as established by the National Agricultural
Statistics Service, to adjust for changing resource conditions, market
demand, and industry viability. The rate is then discounted by 20
percent to reflect lessee contributions. If the office receives an
application for a lease at a higher amount, then the present lessee has
the right to match the bid. The office manages about 3.6 million acres,
of which about 3.5 million acres are used for grazing, including hay
land. Total grazing receipts in fiscal year 2004 were almost $4.2
million.
[End of section]
Appendix VII: Comment from Department of the Interior:
United States Department of the Interior:
OFFICE OF THE ASSISTANT SECRETARY:
POLICY, MANAGEMENT AND BUDGET:
Washington, DC 20240:
SEP 6 2005:
Ms. Robin M. Nazzaro:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, N. W.:
WASHINGTON, D.C. 20548-0001:
Dear Ms. Nazzaro:
Thank you for the opportunity to review and comment on the Government
Accountability Office (GAO) draft report, LIVESTOCK GRAZING: Federal
Fees Vary Widely, Depending on the Purpose and Approach for Setting the
Fees (GAO-05-869). The following general and specific comments are
provided.
General Comment:
I am pleased that the GAO recognizes that differences in resource
conditions and legal requirements can cause variances in livestock
grazing fees. The report points out the difficulty in capturing all the
costs of grazing programs; however, the report does not point out
sufficiently the significant indirect benefits to other Bureau of Land
Management (BLM) programs that are difficult to quantify.
Specific Comments:
The BLM is a multiple-use agency and, as such, is directed to provide
for some commercial use of the lands within its jurisdiction, and is
expected to provide resources such as food and fiber for the benefit of
the Nation. The scope and complexity of the BLM's responsibilities for
America's rangeland resources demand sound business practices that meet
the public's expectations of both proper resource management and fiscal
accountability.
The Taylor Grazing Act identified stabilization of the livestock
industry dependent on the public range as one of the purposes of the
Act. As a result, the BLM and the Forest Service have legislative
direction that goes beyond simply obtaining revenue for products that
could be made available from those lands.
The following definition for "water base" should be added (p, l3):
water that is suitable for consumption by livestock and is available
and accessible to the authorized livestock when the public lands are
used for livestock grazing (43 CFR 4100.0-5).
As noted in the draft report (p. 31, n.16), the BLM applies grazing
receipts in accordance with a congressional directive that has appeared
in the BLM's appropriations language since 1980, which, we believe,
supersedes the provisions in Section 401 of the Federal Land Policy and
Management Act, 43 U. S.C. 751(b)(1). The BLM's implementation and
interpretation of the statute have been consistent and supported by
both the Office of Management and Budget and the Department of the
Treasury. On August 4, 2005, attorneys from the Department of the
Interior's Office of the Solicitor (SOL) and GAO met and discussed the
interpretation of this provision of the law. Our understanding from the
meeting is that GAO concurred with the BLM's and SOL's interpretation
of the law.
The BLM would not characterize the purpose of the grazing fee formula
as enabling "ranchers to stay in production by keeping fees low to
account for conditions in the livestock market" (p. 37). Even though
accounting for livestock market conditions affects the fee, many other
factors, including access to public land grazing, enable a rancher to
stay in production.
The report points out that livestock operators identify the seasonal
importance of public lands grazing access to their operations. As
discussed in the draft report (p. 40), the grazing fee formula
components are compiled by the Department of Agriculture's,
Agricultural Statistics Board and furnished to the BLM and the Forest
Service for calculating the grazing fee each year.
Comparisons of alternative fee structures, such as the McGregor Range,
however, are for the most part useless. The western ranch economy could
not operate under a system that had bidding similar to McGregor Range,
nor would it provide the stability called for by law. A suggested
alternative discussion of the McGregor Range in Appendix V (p. 85) is
enclosed. Comments from the U.S. Fish and Wildlife Service and the
Bureau of Reclamation also are enclosed.
If you have any questions, please contact Bud Cribley, Group Manager,
Rangelands and Water Resources Group, on 202-785-6569, or Andrea
Nygren, BLM Audit Liaison Officer, Management Systems Group, on 202-
452-5153.
Sincerely,
Signed by:
P. Lynn Scarlett:
Assistant Secretary Policy, Management and Budget:
Enclosures:
The following are GAO's comments on the Department of the Interior's
letter dated September 6, 2005.
GAO Comments:
1. We disagree. The information in the report accurately and
sufficiently reflects the information provided by BLM in many different
documents and during multiple meetings with rangeland management
officials regarding the benefits from the grazing program to local
economies and ranchers. However, the information provided by BLM in
these many meetings and documents did not refer to any indirect
benefits that accrue to other BLM programs from the grazing program.
While Interior's letter states that such significant indirect benefits
exist, it does not provide any detail on the nature of these benefits;
and therefore, we have not made any modifications to the report.
2. We changed the text to add the definition of a water base.
3. We met with attorneys and staff from BLM and Interior's Office of
the Solicitor on August 4, 2005, and have removed the footnote to which
Interior refers in its comments.
4. In this section, we are not discussing the purpose of the fee and
the grazing fee formula. Rather, we are observing that the fee formula
includes factors that incorporate ranchers' ability to pay (BCPI and
PPI). We agree that other factors, such as access to public lands,
enable ranchers to stay in production and therefore clarified the
language, accordingly.
5. We disagree that a comparison of alternative fee structures is
useless. It is useful to explicitly and periodically examine the
implications of different policy choices as they relate to grazing fees
and to consider alternative fee options. Our discussion of the McGregor
Range is in the context of a broader discussion of competitive bidding
and fees on BLM and Forest Service lands. That discussion clearly and
carefully recognizes the impediments to establishing such a system. In
particular, we recognize that such a system would only be established
if the purpose of the program and fee were different from those which
currently exist. BLM provided text to clarify the mixed ownership of
McGregor Range, which we included in appendix V.
[End of section]
Appendix VIII: Comments from the Forest Service:
United States Department of Agriculture:
Forest Service:
Washington Office:
1400 Independence Avenue, SW:
WASHINGTON, DC 20250
File Code: 1420/2230-1:
Date: SEP 02 2005:
Ms. Robin M. Nazzaro:
Director, Natural Resources and the Environment:
U.S. Government Accountability Office:
441 G Street, N. W.:
WASHINGTON, DC 20548:
Dear Ms. Nazzaro:
Thank you for the opportunity to review and comment on the draft
Government Accountability Office (GAO) Report, GAO-05-869, "Livestock
Grazing: Federal Fees Vary Widely, Depending on the Purpose and
Approach for Setting the Fees." The Secretary of Agriculture has
requested that I provide a coordinated response for all Department of
Agriculture agencies.
The Animal and Plant Health Inspection Service; Cooperative State
Research, Education, and Extension Service; Grain Inspection, Packers
and Stockyards Administration; and National Agriculture Statistics
Service have no further comments regarding this report.
The report accurately recognizes that the Forest Service grazing fee is
set in accordance with an Executive Order that maintains the fee
formula established in the Federal Land Policy and Management Act
(FLPMA) of 1976 as amended by the Public Rangelands Improvement Act
(PRIA) of 1978, and is not related to the cost the Forest Service
incurs in the administration of the program.
If you have any technical questions regarding this audit, please
contact Ralph Giffen, Rangelands Management Staff, at (202) 205-1455.
For general questions regarding the audit, please contact Sandy T.
Coleman, Assistant Director of Management Control and Audit, at (703)
605-4699.
Sincerely,
Signed by:
DALE N. BOSWORTH:
Chief:
[End of section]
Appendix IX: GAO Contact and Staff Acknowledgments:
Key Contact:
Robin Nazzaro, (202) 512-3841:
Staff Acknowledgments:
In addition to the contact named above, Andrea Brown, Susan Iott,
Mehrzad Nadji, Tony Padilla, Lesley Rinner, Carol Herrnstadt Shulman,
Pam Tumler, and Amy Webbink made significant contributions to this
report. In addition, Denise Fantone, Barry Hill, Miguel Lujan, Anne
Rhodes-Kline, and Jack Warner made important contributions to the
methodologies used in this report.
[End of section]
Related Products:
Grazing Reports:
Large Grazing Permits.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-93-190R]
(Suppl.) Washington, D.C.: July 16, 1993.
Large Grazing Permits.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-93-190R]
Washington, D.C.: June 25, 1993.
Rangeland Management: Profile of the Forest Service's Grazing
Allotments and Permittees.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-93-141FS]
Washington, D.C.: April 28, 1993.
Rangeland Management: BLM's Range Improvement Project Data Base Is
Incomplete and Inaccurate.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-93-92]
Washington, D.C.: April 5, 1993.
Rangeland Management: Profile of the Bureau of Land Management's
Grazing Allotments and Permits.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-92-213FS]
Washington, D.C.: June 10, 1992.
Rangeland Management: Results of Recent Work Addressing the Performance
of Land Management Agencies.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-RCED-92-60]
Washington, D.C.: May 12, 1992.
Rangeland Management: Assessment of Nevada Consulting Firm's Critique
of Three GAO Reports.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-92-178R]
Washington, D.C.: May 4, 1992.
Grazing Fees: BLM's Allocation of Revenues to Montana Appears Accurate.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-92-95]
Washington, D.C.: March 11, 1992.
Rangeland Management: Interior's Monitoring Has Fallen Short of Agency
Requirements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-92-51]
Washington, D.C.: February 24, 1992.
Rangeland Management: BLM's Hot Desert Grazing Program Merits
Reconsideration.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-92-12]
Washington, D.C.: November 26, 1991.
Rangeland Management: Comparison of Rangeland Condition Reports.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-91-191]
Washington, D.C.: July 18, 1991.
Rangeland Management: Current Formula Keeps Grazing Fees Low.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-91-185BR]
Washington, D.C.: June 11, 1991.
Rangeland Management: Forest Service Not Performing Needed Monitoring
of Grazing Allotments.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-91-148]
Washington, D.C.: May 16, 1991.
Rangeland Management: BLM Efforts to Prevent Unauthorized Livestock
Grazing Need Strengthening.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-91-17]
Washington, D.C.: December 7, 1990.
Rangeland Management: Improvements Needed in Federal Wild Horse
Program.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-90-110]
Washington, D.C.: August 20, 1990.
Management of the Public Lands by the Bureau of Land Management and the
U.S. Forest Service.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-RCED-90-24]
Washington, D.C.: February 6, 1990.
Change in Approach Needed to Improve the Bureau of Land Management's
Oversight of Public Lands.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-RCED-89-23]
Washington, D.C.: April 11, 1989.
Management of Public Rangelands by the Bureau of Land Management.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-RCED-88-58]
Washington, D.C.: August 2, 1988.
Public Rangelands: Some Riparian Areas Restored but Widespread
Improvement Will Be Slow.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-88-105]
Washington, D.C.: June 30, 1988.
Rangeland Management: More Emphasis Needed on Declining and Overstocked
Grazing Allotments.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-88-80]
Washington, D.C.: June 10, 1988.
Rangeland Management: Profiles of Federal Grazing Program Permittees.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-86-203FS]
Washington, D.C.: August 12, 1986.
Rangeland Management: Grazing Lease Arrangements of Bureau of Land
Management Permittees.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-86-168BR]
Washington, D.C.: May 30, 1986.
Public Rangeland Improvement--A Slow, Costly Process in Need of
Alternate Funding.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-83-23]
Washington, D.C.: October 14, 1982.
User Fee Reports:
User Fees: DOD Fees for Providing Information Not Current and
Consistent.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-34]
Washington, D.C.: October 12, 2001.
Federal User Fees: Some Agencies Do Not Comply with Review
Requirements.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-98-161]
Washington, D.C.: June 30, 1998.
Federal User Fees: Budgetary Treatment, Status, and Emerging Management
Issues.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-98-11]
Washington, D.C.: December 19, 1997.
(360487):
FOOTNOTES
[1] Agencies use different arrangements to allow grazing on their
lands. The Bureau of Land Management (BLM) both permits and leases land
for grazing, depending on the legal designation of the land being
grazed. Similarly, the Bureau of Reclamation also issues permits and
leases for grazing on project lands. The Forest Service, National Park
Service, and Fish and Wildlife Service permit grazing on their lands.
The Department of Defense services lease their lands for grazing. BLM
manages grazing permits on lands withdrawn from the public domain for
use by the Department of Energy.
[2] While the Army Corps of Engineers is an agency within the Army, we
consider it as a separate agency for the purposes of this report. The
Bureau of Indian Affairs helps Native Americans to manage grazing on
tribal lands. While private ranchers can lease these lands for grazing
at a fee, the lands are tribal lands and therefore are not included in
this discussion of grazing on federal lands.
[3] Generally, there are 17 states, including the Great Plains states,
considered to be western: Arizona, California, Colorado, Idaho, Kansas,
Montana, Nebraska, New Mexico, Nevada, North Dakota, Oklahoma, Oregon,
South Dakota, Texas, Utah, Washington, and Wyoming. However, depending
on the situation, western states can be grouped and counted
differently. BLM primarily manages grazing in 11 western states,
including Arizona, California, Colorado, Idaho, Montana, New Mexico,
Nevada, Oregon, Utah, Washington, and Wyoming. The Forest Service
manages grazing for its forests in 16 western states, excluding Texas,
under the range management subchapter of the Federal Lands Policy and
Management Act of 1976 and the Public Rangelands Improvement Act of
1978, and grazing on national grasslands.
[4] Exec. Order No. 12548 (Feb. 14, 1986).
[5] While BLM uses the term AUM as a unit for purposes of charging
fees, the Forest Service uses the term head month. The two units are
calculated the same way. We will use the term AUM in this report to
refer to both AUM and head month. Of the other agencies, some charge by
AUM while others charge a flat fee or by acre.
[6] Data on acres and AUMs are provided for fiscal years, except for
the Forest Service, which reported these data by grazing year. The
grazing year extends from March through February. Data on expenditures
and receipts are reported by fiscal year, while fee data are reported
differently depending on the agency. Specifically, BLM and Forest
Service fees are reported by grazing year, the other federal agencies'
fees are reported by fiscal year, state fees are reported primarily by
fiscal year, and private fees and some state fees are reported by
calendar year.
[7] While the majority of grazing is described according to AUMs and
many agencies can calculate the amount of AUMs in their permits and
leases, some of the agencies' field offices do not use AUMs as a
convention to measure grazing. These offices use other measures to
determine the amount of grazing that is occurring, for example, the
amount of forage that remains. About five national parks, one Air Force
base, and two Corps districts did not provide information on AUMs.
[8] The discussion does not include Alaska, which is treated
differently in grazing law. See 43 U.S.C. § 316.
[9] While the Forest Service has 155 proclaimed national forests and 20
grasslands, it has combined them into 123 administrative offices for
management purposes.
[10] Rangelands are lands on which the indigenous vegetation is
predominantly grasses, grass-like plants, forbs (herbs), or shrubs and
is managed as a natural ecosystem. Rangelands include natural
grasslands, savannas, many deserts, tundras, alpine communities,
marshes, and meadows. They differ from pastureland in that they are not
periodically planted or treated through tilling, fertilization, mowing,
weed control, or irrigation. Not all rangelands are used for grazing
purposes.
[11] In the same year, the industry had about 6 million sheep and
67,160 sheep operations, which raise sheep for both meat and wool.
[12] A base property is property that is capable of serving as a base
of operation for livestock use of public lands within a grazing
district or contiguous land, or, when no applicant owns or controls
contiguous land, noncontiguous land that is capable of being used in
conjunction with a livestock operation that would use public lands
outside a grazing district. A water base is water that is suitable for
consumption by livestock and is available and accessible to the
authorized livestock when the public lands are used for livestock
grazing.
[13] The Forest Service data on the extent of grazing is for the
grazing year March 2004 to February 2005; the remaining agencies
provided grazing data for fiscal year 2004.
[14] According to a Forest Service financial management official, the
agency has not implemented a cost-accounting system because it has been
focused on improving the agency's financial statements, which we
previously identified as having material control weaknesses.
[15] The Forest Service implemented a new work planning system, called
WorkPlan, in fiscal year 2004. The system allows forests and districts
to develop detailed plans, including personnel resources, vehicles, and
other resources, needed for conducting work on individual projects. The
plans are used to allocate budgets and are to be updated during the
year to keep the plans current.
[16] OMB defines those costs that can be considered indirect. We
applied these definitions to the expenditures supplied by the agencies.
OMB, Managerial Cost Accounting Concepts and Standards for the Federal
Government: Statement of Federal Financial Accounting Standards Number
4 (Washington, D.C.: July 31, 1995).
[17] The six cost pools are General Management, Public Communications,
Ongoing Business Services, Common Services, Office of Worker's
Compensation, and Unemployment Compensation Insurance. The General
Management pool and some of the activities in the Common Services pool
are considered direct or support rather than indirect costs. These are
included in the estimate of direct expenditures.
[18] In proposed regulations, BLM would allow cooperators (ranchers and
others), subject to valid existing rights, to share title with the
United States to permanent structural range improvements, such as
fences, wells, and pipelines, where authorization is granted after
February 6, 2004, in proportion to their contributions to the
development and construction costs.
[19] BLM also distributes funds from certain lands in Oregon and
California under the Act of August 28, 1937, 50 Stat. 875.
[20] The amounts distributed and deposited are greater than the amounts
collected because the DOD military services have reimbursable programs
in which they can collect and keep funds and use them to reimburse or
fund their grazing and agricultural programs. The amounts spent do not
have to equal the amount collected in any given year.
[21] In a recent GAO report, we found inconsistencies in the cost
recovery methods used by parks for some of their special use permits,
the same type of permit used for grazing activities. GAO, National Park
Service: Revenues Could Increase by Charging Allowed Fees for Some
Special Use Permits, GAO-05-410 (Washington, D.C.: May 6, 2005).
[22] We use fee title land to refer to land that was acquired by the
United States and is managed by the U.S. Fish and Wildlife Service.
[23] The agencies hold the funds in their suspense accounts until the
funds can be either credited or obligated to the services' respective
grazing programs. A recent GAO report discussed accounting weaknesses
related to the accounts. GAO, DOD Problem Disbursements: Long-standing
Accounting Weaknesses Result in Inaccurate Records and Substantial
Write-offs, GAO-05-521 (Washington, D.C.: June 2, 2005). To improve
accountability, in July 2005, the DOD Deputy Chief Financial Officer
directed that specific suspense subaccounts be used to capture receipts
from grazing leases.
[24] Grazing fees for BLM and the Forest Service are for the grazing
year (March to February). All other federal agencies reported fees for
the fiscal year. States predominantly reported fees for the fiscal
year, although some reported fees for the calendar year. Private
ranchers' fees are reported for the calendar year.
[25] The Taylor Grazing Act directs the Secretaries of Agriculture and
the Interior to charge "reasonable fees." 43 U.S.C. § 315(b). A federal
district court has determined that FLPMA did not alter this objective.
See Natural Resources Defense Council v. Hodel, No. S-86-0548, slip op.
at 3-4 (E.D. Cal. Oct. 13, 1987). The preamble to FLPMA states that it
is the policy of the United States to receive fair market value for the
use of public lands. However, FLPMA specially instructs the Secretaries
of Agriculture and the Interior to determine a fee that is "equitable
to the United States and to the holders of grazing permits and leases,"
which takes into consideration the costs of production along with other
factors that may relate to the reasonableness of the fee. 43 U.S.C. §
1751(a). The IOAA similarly provides that fairness, public policy
interests, and other interests and relevant factors are to be
considered in establishing a fee.
[26] The exact formula is: Fee = $1.23 x (FVI +BCPI - PPI)/100. The
data used to calculate the fee are from the year prior to the year when
the fee is charged. For example, the 2004 fee is based on data from
2003.
[27] The base was calculated with the premise that the cost of
conducting livestock grazing on private and public lands should be
equal. Under this premise, the $1.23 base was calculated by totaling
the costs of conducting livestock grazing on private lands, including
grazing fees, and subtracting the total cost of conducting business on
public lands, excluding grazing fees.
[28] For fees that are competitive, a total amount is bid. In such
cases, we divided that total by the amount of AUMs in the permit or
lease to determine an equivalent fee per AUM.
[29] Reclamation area offices used different market-based approaches to
set fees, including appraisals, a competitive method with a minimum
bid, a limited method, and a discounted method. To establish market
prices in instances in which competition is limited to ranchers that
have access to the parcels involved, Reclamation area offices use a
"limited" market approach to set fees, in which a permit or lease is
competitively bid among the limited number of ranchers who have direct
access to the grazing allotment. In those cases in which only one
rancher has access to Reclamation land, the area offices may offer the
permit or lease to the rancher at the minimum fee.
[30] The National Agricultural Statistics Service gathers data and
calculates fees per AUM and head. The price per head is used in the
calculation of the federal grazing fee and is equivalent to the AUMs
used by BLM and the head months used by the Forest Service. The 2004
data was used to set fees for 2005. Fees charged in 2003 were $12.80
per AUM and $13.40 per head.
[31] Generally, there are 17 states considered to be western. BLM
primarily manages grazing in 11 western states, and the Forest Service
manages grazing for its forests in 16 western states, excluding Texas.
[32] GAO, Rangeland Management: Current Formula Keeps Grazing Fees Low,
GAO/RCED-91-185BR (Washington, D.C.: June 11, 1991).
[33] The definition of fair market value in relation to the fee is the
$1.23 base value established in the 1966 Western Livestock Survey
"added to the nonfee cost of operating on public grazing land so that
the total cost of grazing on public land equals the total cost (nonfee
plus private lease rate) of operating on comparable privately leased
grazing land." Departments of the Interior and Agriculture, Study of
Fees for Grazing Livestock on Federal Lands (Washington, D.C.: October
21, 1977), 4-3.
[34] The fee figures are presented in nominal dollars.
[35] Originally, with the Land Ordinance, the number 16 lot of every
township was reserved for that township. In 1848, the act establishing
Oregon gave states in the Northwest territory sections 16 and 36 in
each township. In 1894, Utah, followed in 1910 by Arizona and New
Mexico, entered the nation with two additional sections reserved in
each township, sections 2 and 32.
[36] Some believe that the existence of permit value indicates that the
fee does not capture the full value of federal forage. However, recent
research has shown that the value of permits may be capturing other
values than the income earning potential of land. That is, despite the
fact that ranchers assert that they are paying equal or higher total
grazing costs on public versus private lands, they have been willing to
pay an additional premium to buy permits to graze on public lands,
indicating nonprofit motives such as quality of life, as reasons for
ranch ownership.
[37] The Society for Range Management is an association of range
management specialists that represents nearly 4,000 members. Its
mission is to promote and enhance the stewardship of rangeland
ecosystems and renewable range resources, with an aim to meet human
needs through scientific research and policy.
[38] Karyn Moskowitz and Chuck Romaniello, Assessing the Full Cost of
the Federal Grazing Program (Tucson, Arizona: October 2002).
[39] To the extent that an agency's budget allocates funds for
monitoring, planning, and protecting the resources, these costs are
reflected in their budgets. However, when the level of funds and
activities are not sufficient to restore the resources, the damages
remain a cost to the society.
[40] David T. Taylor, James G. Thompson, and Tim Darden, "Rural
Communities and the Changing Rangeland Users," in Current Issues in
Rangeland Resources Economics (Salt Lake City, Utah: Utah Agricultural
Experiment Station and Utah State University, 2004).
[41] Thomas M. Power, "Taking Stock of Public Lands Grazing: An
Economic Analysis," in Welfare Ranching: The Subsidized Destruction of
the American West (Washington, D.C.: Island Press, 2002).
[42] Studies have also shown that despite equal or higher total grazing
costs on public versus private lands ranchers have been willing to pay
an additional premium to buy permits to graze on public lands that
supports the quality of life and nonprofit motives for ranch ownership.
[43] See for example "Sheep and the Environment: The Facts on Sheep
Ecology," prepared by American Sheep Industry Association, 2005.
[44] See for example, "Cattle and Beef Handbook: Environment," National
Cattlemen's Beef Association; www.beef.org/ncbenviroment.aspx.
[45] The study is based on a random survey of land outside urban areas
and represents the rural land-use gradient, including preserves,
ranches, and low-density development. Jeremy D. Maestas, Richard L.
Knight, and Wendell C. Gilgert, "Biodiversity Across a Rural Land-Use
Gradient," Conservation Biology, Vol. 17, No. 5 (October 2003).
[46] Interview with Sam Albrecht, Executive Vice President, Society for
Range Management, et al., Lakewood, Colorado, September 2004.
[47] See for example www.sierraclub.org/grazing, based on the work by
D.S. Wilcove, D. Rothstein, J. Dubow, A. Phillips, E. Losos,
"Quantifying Threats to Imperiled Species in the United States,"
BioScience, Vol. 48, No. 8 (August 1998).
[48] In general, an economically efficient mix of uses requires
adjusting the size and mixture of livestock and wildlife relative to
the values these different animals provide. In one article comparing
value of forage on public lands for wildlife and livestock uses, the
authors concluded that the marginal value of forage for deer and elk is
competitive with the forage value for cattle ranching in Challis, Idaho
area. John Loomis, Dennis Donnelly, and Cindy Sorg-Swanson, "Comparing
the Economic Value of Forage on Public Lands for Wildlife and
Livestock," Journal of Range Management, Vol. 42, No. 2 (March 1989).
[49] See, e.g., Arizona Cattle Growers Assn. v. Fish and Wildlife
Service, 273 F. 3d 1229 (2001) (The court found that the record did not
support the FWS claims in this particular case.) But see, e.g., Palila
v. Hawaii Dept of Land and Natural Resources, 852 F.2d 1106, (9th. Cir.
1988) (sheep grazing constituted a "taking" of palila birds under the
Endangered Species Act, since although sheep do not destroy full-grown
mamane trees, they do destroy mamane seedlings, which will grow to full-
grown trees, on which the palila feeds and nests).
[50] Lynn Jacobs, Waste of the West: Public Lands Ranching (Tucson,
Arizona: 1991).
[51] The Forest Service has 123 administrative offices, which manage
155 proclaimed national forests and 20 national grasslands. National
grasslands are listed under the administrative units with which they
are associated.
[52] The agencies recreated tables that we produced in two previous GAO
reports: GAO, Rangeland Management: Profile of the Bureau of Land
Management's Grazing Allotments and Permits, GAO/RCED-92-213FS
(Washington, D.C.: June 10, 1992) and GAO, Rangeland Management:
Profile of the Forest Service's Grazing Allotments and Permittees,
GAO/RCED-93-141FS (Washington, D.C.: Apr. 28, 1993).
[53] The 16 western states include Arizona, California, Colorado,
Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota,
Oklahoma, Oregon, South Dakota, Utah, Washington, and Wyoming.
[54] While BLM uses the term AUM as a unit for purposes of charging
fees, the Forest Service uses the term head month. The two units are
calculated the same way. We use the term AUM in this report to refer to
both AUM and head month.
[55] GAO, Rangeland Management: Current Formula Keeps Grazing Fees Low,
GAO/RCED-91-185BR (Washington, D.C.: June 11, 1991).
[56] Departments of the Interior and Agriculture, Study of Fees for
Grazing Livestock on Federal Lands (Washington, D.C.: October 21,
1977).
[57] Departments of the Interior and Agriculture, Grazing Fee Review
and Evaluation (Washington, D.C.: February, 1986) and Departments of
the Interior and Agriculture, Grazing Fee Review and Evaluation Update
of the 1986 Final Report (Washington, D.C.: April 30, 1992).
[58] Department of Agricultural Economics and Agricultural Business,
The Value of Public Land Forage and the Implications for Grazing Fee
Policy, Bulletin 767 (Las Cruces, New Mexico: New Mexico State
University, 1992).
[59] H.R. 2493, Forage Improvement Act of 1997 (introduced Sept. 18,
1997).
[60] U.S. Army Audit Agency, The Army Installation Conservation
Program--Outleasing: III Corps and Fort Hood, Fort Hood, Texas, AA 02-
099 (Alexandria, Virginia: Dec. 19, 2001).
[61] See 36 C.F.R. 7.63(b)(5).
[62] The western states predominantly maintain grazing data by fiscal
year. However, several states (Colorado, Idaho, North Dakota, Oklahoma,
Oregon, South Dakota, and Washington) maintain some grazing data by
fiscal year and some by calendar year.
[63] Originally, with the Land Ordinance, the number 16 lots of every
township were reserved for that township. In 1848, the act establishing
Oregon gave states in the Northwest territory sections 16 and 36 in
each township. In 1894, Utah, followed in 1910 by Arizona and New
Mexico, entered the nation with two additional sections reserved in
each township, sections 2 and 32. In addition to lands granted for
schools, states could set aside additional trust lands to generate
revenue for broader purposes, such as supporting universities,
hospitals, and other public buildings.
[64] This was the fee per AUM for cattle; for sheep, the grazing fee
for range permits was $1.27 per AUM in 2004.
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