Bundy Case Is A Requiem For Property Rights In America

Bundy Case Is A Requiem For Property Rights In America

I think many, if not most, cattlemen can’t understand why Cliven Bundy is considered a hero in some people’s eyes. After all, he didn’t pay his grazing fees for 20 years. Of course, like most things, the situation is a little more complicated than it appears at first glance.

This issue goes back over 100 years. After the U.S. government acquired the vast tracts of the West from Mexico, they wanted it settled. But unlike other areas where the government allowed homesteading, the number of acres that the government allowed a settler to stake his claim to simply didn’t constitute a viable economic unit in the West. A parcel of 160 acres in Missouri isn’t equivalent to the productive capacity of 160 acres in most of these areas of the West. The whole concept of public lands evolved out of the fact that the government allowed producers to lease larger tracts of land in order to construct viable production units.

Then along came the multiple-use doctrine. It sanctioned that the land was to be used to benefit the public, and included such things as grazing, energy development and tourism, which are the lifeblood of the economies in the West. The way things developed, grazing permits or leases were tied to privately held acreages, which enabled producers to maintain ranching operations that were theoretically economically viable.

The expense of dealing with the government on these leases is astronomical, which is the reason the actual lease rates are well below national averages. Of course, to all of us outsiders, it looks like a sweetheart deal.

When I was fresh out of grad school, I did a research project on a couple of data sets, trying to look for the secrets of profitability and being a low-cost producer. There were a lot of great tactics that could be learned, but one of the biggest drivers of profitability was the percentage of ground that was leased from the state.

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In the state of Colorado, for instance, essentially every township has a section of grass that is leased out in order to support public education in the state. These are called school sections. The holders of these school sections pay one-third or less of the typical going rate. These long-term leases are structured so that they’re nearly impossible to get from the current holders of the lease. The result is that such producers have a dramatic competitive advantage over others.

It’s a convoluted mess, because relative to federal lands, the value of those leases was built into the ranches that had the land that the leases were tied to. In essence, the first holder of the lease raked in a windfall, essentially being allowed to sell the federal land with the lease; subsequent holders have paid for those leases. Thus, a change now would force them to essentially pay fair value twice.

The above isn’t even one of the two biggest dynamics of running on federal land. The federal government is the most fickle and demanding landlord you can imagine. For the first 100 years or so, federal lands were understood to be a vital part of these states’ economies and were managed as such, but that changed.

Federal lands came under the control of politicians and environmentalists, who wanted those lands managed for their benefit; you can imagine the problems that have ensued. This is why Bundy is a hero to many people in the West, and a criminal to others.

Bundy's Lease

Let’s look at the county where Bundy’s lease is located. Clark County, NV, at one time had 52 lease holders on federal land. Bundy is the only one left, and the only reason the government hasn’t run him off is because he’s simply refused to go.

Bundy probably made his case in a bad way and, ultimately, the federal government will win. There’s no doubt about that; he’s already lost twice in appeals. No one can fight the power of the federal government, with all the resources and options at its disposal.

What Bundy did, however, was point out that the system is broken. It doesn’t matter if the rationale is to save turtles, fish, mice or prairie chickens, the federal government is eliminating not only grazing but the entire multiple-use concept on federal lands.

Folks back East can still drive out to one of the western states, hike around and enjoy the vast country, so they don’t have a lot of concerns. However, the economies and the lifestyle of the affected western communities are being destroyed. It’s as if you made an agreement with someone, subsequent generations continued to invest on the land, and then the deal was changed. 

I suppose the best analogy is to take a landowner in a state like Illinois, whose family has owned and worked a particular parcel of land for 100 years and multiple generations. One day, the government decides your land would better serve society as a state park or if it had a Walmart distribution center on it. Undoubtedly, you’d fight the government; undoubtedly, you would lose.

The reality is that for people in the West, public lands have been seen as private property to a large extent, unlike in the East where virtually all land is considered private property. The sad reality, however, is that private property rights no longer exist. You can hold your land until the government decides to take it. It’s just a much more real experience for people in the West.

If you haven’t lived in a western state, you likely don’t understand the dynamic between state rights and the oppressive power of the federal government. The federal government is not only the biggest landowner in most western states, but the most powerful player, essentially dictating what is to be done. Along with any decree is the ever-present threat of shutting down your economy if you don’t go along. The feds also don’t pay taxes on that land, so that’s a tremendous drain as well. 

As I said, the Bundy family will lose, and the federal government will drive them out of business one way or another, thus removing cattle from land that had been grazed successfully for generations upon generations. Unless you’re a rancher whose livelihood depends on grazing federal lands, dealt with any of the 20 bureaucracies you must deal with in doing so, and been forced to listen to a 20-something bureaucrat threaten your lease unless you change your ways, you can’t fathom the resentment that exists in some quarters toward an overbearing, uncaring and totally unintelligible federal bureaucracy that can dictate virtually everything to you.

Bundy isn’t to be celebrated for breaking the law or for failing to pay his fees, but he is a hero for calling attention to the plight of the West as his final act. Then the Bundy family will be like the thousands of other western ranchers that have been, or are being, removed from their land on a daily basis. Perhaps, however, Bundy’s final act of defiance will bring attention to the problem of a broken system.

The views of Troy Marshall do not necessarily reflect those of beefmagazine.com or the Penton Farm Progress Group.  

Editor's Note: The Nevada Cattlemen's Association provided this position statement on April 18. Click here to read.

 

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