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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. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robin Nazzaro at (202) 
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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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