“BANKING ON CATTLE”

 

June 1996 Article

“America’s public lands are in hock, mortgaged to the hilt by ranchers who use public lands like private property.”

 

Northern California’s Monthly Independent Progressive Newspaper…COMMUNITY ENDEAVOR NEWS

 

            BEHIND the overgrazing of National Forests and the destruction of streams and water supplies, behind the Livestock Grazing Act, attempts to develop wilderness, the ‘Wise Use’ crusade to privatize public lands and threats of violence on the range, lies a single driving force:  banking on cattle.  America’s public lands are in hock, mortgaged to the hilt by ranchers who use public lands like private property.

            Ranchers graze livestock on public lands under a system of grazing permits by which they are granted exclusive grazing privileges to federal ‘grazing allotments’, huge tracts of public land including National Forests and Wilderness areas, which are attached to small, privately owned parcels called ‘base properties’.

            In the Southwest, where cattle graze year round on federal allotments and ranchers’ base properties are often as small as forty acres, many ranching operations are completely dependent on federal land and ranchers have no real collateral. Values of base properties and federal lands have become co-mingled…in fact, almost the entire monetary value of many ranches is based on the public land which, with the help of government, ranchers parlay like private property.

            Although grazing permits are revocable privileges, which can’t be brought or sold, and grazing allotments convey no property rights, contracts between the U.S. Department of Agriculture and lending institutions ensure that when a base property is sold, it is sold as a package with the federal grazing permit.  The value of the grazing permit is based on below-market federal grazing fees and the number of livestock authorized usually based on historic use and far more than the land can support.  Banks, including quasi-federal agencies such as FmHA and Farm Credit Banks, routinely make loans based on this ‘permit value’ and the U.S. Forest Service actually sets up the deals, holding grazing permits in escrow as collateral for the lender.

        If livestock numbers are lowered, the loan’s collateral is reduced and, with fewer cattle, ranchers are unable to make their hefty payments.  When this occurs, banks complain, Congressman step in, livestock numbers stay high and America’s public lands suffer.  As ecological conditions deteriorate,

 

agencies attempt to mitigate damage with taxpayer subsidized ‘range improvements’…up to one half billion dollars annually.

            To secure their investments, banks need to either lock in high numbers of cattle, as the Livestock Grazing Act would do, or to actually privatize public lands.  The Farm Credit Bank of Texas, one of the nation’s biggest lenders on federal grazing permits, has joined forces with radical Right Wing Wise Use Property Rights’ groups across the west in an attempt to establish private property rights on public lands.  Last year, the Bank formed its own PAC, as well as a Property Rights Foundation which move towards privatization as being made by members of the ‘New Right’ who, bemoaning the, “tragedy of the commons”, seek to deliver public lands to the alter of the free market.  These “Free Marketeers”, led by Karl Hess of the CATO Institute, advocate opening federal grazing permits to bidding, luring conservation groups with the promise of an opportunity to lease and then ‘un-graze’ allotments.  The problem is conservation groups simply don’t have enough money to bid on even a fraction of the multibillion dollars loans currently riding on public lands.  Open bidding would also drive permit values up, increasing the collateral value of loans and benefiting only the banking industry. Small ranchers and conservation bidders alike would be squeezed out, with large corporations controlling the market.  The same corporations that now exploit private lands would control hundreds of millions of acres of forest and wilderness.  Increased permit values and higher debts, coupled with declining ecological conditions, would result in increased political pressure to open America’s public lands to other types of exploitation.

            The bottom line is that the American public shouldn’t have to ‘buy back’ its public lands every ten years to protect them from overgrazing.  The only real solution is a buy-down of loans by the federal government and permanent retirement of grazing allotments, which are no longer economically viable.

            For more information, contact Gila Watch, P.O. Box 309, Silver City, NM 88602.