Art Madsen, M.Ed.

Transnational Research Associates

Part I : Background Problem

In recent years, attention has been focused on depletion of biomass caused by overgrazing of cattle, sheep or bison on selected prairies and rangelands. An effort to assess the costs and benefits of either permitting marginally excessive grazing or of restricting grazing to prevent erosion, and subsequent loss of soil, has been made by agronomists and rangeland scientists. Their approaches differ. The primary concern of this analysis, therefore, is to briefly examine the history of overgrazing, its current status, and both sides of the resultant dilemma or issue, as well as to formulate a question which may be realistically expected to stimulate a viable response to the controversy of soil-depletion and overgrazing costs to ranchers and the public-at-large.


In both urban and rural areas of the United States and Canada, awareness of the importance of preserving habitat, grasslands, prairie and rangelands has been at the forefront of public consciousness since at least 1913 (Barro, 59). Tallgrass and rangeland alike have been at risk for a variety of reasons. Large herds of livestock, including sheep, cattle, bison and wildlife have grazed on both private and public lands for over 150 years. Regulations have been only marginally effective in preventing defoliation, depletion of vegetation and erosion in once ecologically stable areas. Tree seedlings, as well as diverse species of grasses, have been at high risk for decades. Ranchers have historically confronted ecologists from the time of the Westward Movement in the mid-19th Century, and this confrontational posture has intensified throughout many Western States and Canadian Provinces in recent years. (Pitt, 417).


The public has shown increasing concern as demonstrated in surveys and statistically validated questionnaires and polls. As awareness increased, and the public became more informed of the costs of permitting overgrazing, pressure mounted, particularly in the 1980s (Obmascik, 1A). In the last two or three years, both ranchers -- who are beginning to shoulder costs of soil restoration -- and the public are seeking a solution to the issue of whether overgrazing should be permitted in the interest of meat production, or whether soil, habitat and future rangeland potential should be carefully preserved. The costs and benefits are being weighed and a concerted attempt to establish an equilibrium between depletion and conservation of biomass, while maintaining adequate herd-size to meet market demand, is being made.


The public is found to be extremely sensitive to preservation of soil, habitat and biomass in the nation's rangelands, as elsewhere (Barro, 63). However, ranchers are also beginning to grasp the importance of maintaining ecological stability and, at the same time, realize that they must continue to produce cattle for revenue.

The issue is not so much the "environmental question." Rather, it is how to arrive at a scientifically precise method of striking a balance suitable to all parties. Argumentation about how to calculate "grazing capacity" on a given tract of land is at the heart of this debate. Costs are also under analysis, by using varying methods. The agro-economic models being discussed in class can be applied in this instance to arrive at a suitable solution, even though many specialists still disagree about the exact methodological strategy to be adopted.


What is the best method of calculating the costs and benefits of controlling grazing on North American rangelands in the interest of preventing erosion and soil-loss?

Part II : Economic Principles

"Benefit-Cost Analysis": A Useful Methodology

Protecting vegetation and top-soil from overgrazing on the nation's rangelands is not a simple matter of guesswork or rudimentary legislation. There are professionally derived agro-economic models which have addressed this natural resource problem in an attempt to establish the costs and benefits of controlling overgrazing on either private or public rangelands. Quantitative analysis, particularly Benefit-Cost Analysis (BCA), is an important tool in guiding legislators at the State and Federal level when they are compelled to make an informed decision concerning grazing fees, subsidies and/or enactment of restrictive legislation.

Unfortunately, most public officials merely scratch the surface of the BCA model, relying on simple determination of whether or not benefits outweigh costs (Ward, 29). They fail to realize that there are frequently both market and non-market factors involved; additionally, they seem to focus on simple ratios and fractional data which can obscure the real benefits or costs of a given course of action.

Our assigned readings and classroom discussion related to Benefit-Cost Analysis have provided deeper insight into how this model can be applied to the question of overgrazing. What are the benefits of restricting grazing and what are the costs?

After defining the "unit" to be evaluated, many variables must be inserted into the 10-step BCA process. Among those variables are (1) the costs of non-production of meat or milk, (2) the amount of rainfall affecting rate of biomass regrowth, (3) the costs of soil restoration over time, (4) the current market value of meat or milk and, of course, (5) agro-economic data relating to the bio-ecological grazing capacity of the land which generally remains constant (Wilson, Macleod, 478). By plugging these variables -- among others -- into the BCA equations, an approximation of the benefits to society, on the one hand, can be made. On the other hand, benefits to ranchers are measurably different. Without government subsidies being granted to ranchers, they have little or no incentive to refrain from abusing federal lands when drought or hardship conditions occur (Obmascik, 1A). If the rancher incurs costs in restricting grazing, such as having to purchase cattle feed, he will strenuously oppose BLM regulation. Indeed, inclusion of all these factors facilitates quantitative analysis of the comparative benefits of a range of possible actions.

When reviewing results obtained, a benefit-cost ratio of 1:1, for example, is obviously not heavily weighted in either direction and no entirely valid decision can be made under these circumstances. However, uneven ratios can be revealing, assuming that cautious review of data inserted into the equations is undertaken.

In the case of overgrazing, the BCA method is often used in conjunction with variable and fixed cost models, such as those referred to in Wilson and Macleod (479). While the BCA takes into account average costs and benefits over time, more accurate and meaningful conclusions or ratios can be generated with a combination of analytical approaches.

With respect to the overgrazing issue, assuming that ranchers are compensated through an incentive program of subsidization, the BCA methodology can be "brought into line" and considered valid, all else being equal. Because of the non-market value of much rangeland biomass (grass, scrub brush, wild undergrowth), all of which is subject to depletion, it is important to conserve this resource through a balanced program of grazing, supported by carefully calculated incentive subsidies, to avoid land abuse on the part of the profit-conscious rancher (Obmascik, 1A).

In light of these considerations, benefit-cost analysis is a valuable tool for protecting rangelands and for achieving a balance between product production and conservation of biomass and soil. This equilibrium is subject to fluctuating market forces and political concerns; but it can be stabilized, as discussed in class, by carefully optimizing and re-assessing such factors as timing, priority-ranking and prevailing economic conditions on a periodic basis.

Part III : Previous Work

A number of variables mentioned as proving useful, indeed indispensable, when performing a Benefit Cost Analysis (BCA) have been previously discussed in the existing professional literature related to the overgrazing-soil erosion paradox. In the Journal of Rangeland Management (44:5, Sept. 1991, 475-482), Wilson and Macleod analyze several critical cost-price variables, with particular emphasis on the fluctuations which occur due to market conditions affecting meat production. Input (costs) and output (prices) are found to be crucial elements in determining "grazing rate" or "stocking rate" of cattle on a given tract of land.

Wilson and his colleague have advanced the notion that if a low cost-price differential exists, there will be a tendency to reduce the number of cattle per unit of rangeland. Conversely, if the price of meat rises, ranchers will overstock and overgraze their cattle in an attempt to maximize profit. In this case, the cost-price ratio would be high, i.e. low costs and high prices. Soil erosion, in the absence of biomass and vegetation restoration, would occur under this scenario. Wilson and Macleod further analyze this all-important ratio, which can be incorporated into the BCA model, by clearly examining the components of the cost side of the ratio. They point out that fixed costs and varying costs affect the overall picture. In fact, they conclude that if fixed costs constitute a majority of costs incurred (in the case of ranchers: perhaps land rent, fencing materials, fertilizer or feed), then the optimum stocking rate will rise. Overgrazing occurs, it can be seen, if ranchers enjoy primarily fixed costs. In the Western USA, Wilson notes, there is a distinct difference in grazing patterns depending on whether the land is leased or privately owned; this difference is related to the proportion of the fixed and variable costs incurred under both types of "ownership." Under lease agreements, there needs to be a per-animal fee imposed, not a flat fee, to avoid serious damage to bio-mass and soil.

The implications of Wilson's and Macleod's research for use with the BCA method of selecting the most desirable options are clear. By using data generated in their study, which encompassed Israel, Australia and the USA, and by plugging these reliable data into the appropriate steps of the BCA model, accuracy and validity can be improved.

At this juncture, let us examine two additional articles which shed further light on how to determine the best method for calculating the benefits and costs associated with stabilizing overgrazing and soil loss. Barro and Bright (Restoration and Management Notes, 16:1 Summer 1998, 59-65) refer to data generated by survey and questionnaire methods in the American Midwest.

They provide insight into determining the non-market value of biomass on the nation's rangelands and in national parks. Such a discussion is significant since the public has placed an undefined value on the importance to them of grasslands and habitat which are at risk of destruction by overgrazing if all factors are not properly weighted in BCA equations. It is relatively easy to determine costs and prices of market-sensitive items or commodities, but less easy to quantify the innate value of unspoiled rangelands or meadows. Barro and Bright demonstrate that non-market value is a critical factor in the minds of the public. While they speak of the urban population's impressions of the need to conserve biomass, their data also reflects suburban populations' opinions. Restoration of already depleted resources is also addressed in this article with a view toward establishing a quantifiable factor for insertion in to the BCA analytical model. It is concluded in Barro's discussion that high priority exists in the mind of the public for restricting destruction of habitat and biomass.

A third journal article provides a validated statistical perspective with respect to preferred methodologies of predicting damage to rangelands . This useful analysis by Pitt and colleagues appears in the Journal of Rangeland Management (51:4 July 1998, 417-422). Although grazing in his article is defined narrowly as affecting only tree seedlings, the implications for other types of pasture and rangeland are apparent. Pitt develops a technique which deals with the statistical concept of predictive validity. He devises a model for forecasting identifiable levels of damage as a function of the numbers and types of livestock grazing. Insofar as required BCA data is concerned, his approach is potentially of value. It clearly quantifies damage anticipated to seedlings under carefully circumscribed circumstances. His model can be replicated and could be arguably extrapolated to include other types of bio-mass on rangelands. While Pitt does not suggest that the BCA model is the ideal approach for weighing costs and benefits, his predictive validity studies could be applied to this model with acceptable results.

The three journal articles discussed furnish vital information for purposes of implementing the BCA methods discussed in class readings and lectures. I am convinced that inclusion of these theoretical approaches, based on empirical studies, would result in enhanced acceptability of the BCA as a tool in establishing a suitable balance between overgrazing and strict conservation.

Part IV: Policy Analysis

On the basis of the foregoing observations and principles, the question initially posed can be tentatively answered and useful recommendations for a more complete approach to the response can be validly made. The question under analysis is: "What is the best method of calculating the costs and benefits of controlling grazing on North American rangelands in the interest of preventing erosion and soil-loss?"

Work in the field of benefit-cost analysis has been fairly extensive. Many of the researchers consulted have referred, in their articles, to this methodology as providing a sound foundation on which to proceed in the areas of both productivity and resource conservation. As has been seen, Wilson and MacLeod (1991), Pitt (1998) and Bork (1998) all allude to the applicability of the BCA model to proper calculation of risks, options and suitable solutions in regard to the rangeland grazing issue. Bork (1998) and Coppedge (1998), both writing in the Journal of Rangeland Management, speak of narrower applications of this type of methodology, with specific reference to sheep-grazing and bison consumption patterns in two distinct types of prairie land; whereas, Ward (1998), who explains the BCA model in depth, and Scarnecchia (1998), who focuses on range "carrying capacity", seem to apply the principles of the BCA paradigm in a much broader sense.

There are a number of simplified points which are made in these articles, however, and such information, expressed in basic terms, can be of particular use to politicians and policy-makers throughout the American West. By applying the advantages of fixed and variable cost models to the basically well accepted, if sometimes misunderstood, BCA method of assessing financial and ecological risk, ranchers, politicians and the public can enjoy the results of a combined approach, casting more light on the options available to them. There is always the problem of inaccurate data being plugged into these equations, of course, but by carefully monitoring the source of statistical information and the methods of calculation, enhanced reliability and validity can be achieved. This combined approach, i.e. BCA plus fixed and variable cost models, is probably the "best method" of ensuring that costs and benefits are accurately assessed in the interest of protecting both the financial priorities of the ranchers and the ecological interests of the concerned public.

The implications for crucial decisions which must be made by our politicians and planners are vast. Depletion of soil and vegetation resources throughout the American West must be avoided, but not necessarily at the cost of reduced dairy or meat production. Policy-makers are in an excellent position to arrive at a fair decision on the basis of the easily interpreted conclusions of a "summary document", predicated on the BCA / Fixed & Variable Cost methodologies, which should be given to them by independent, and hopefully impartial, government agencies such as the Bureau of Land Management or the U.S. Department of Agriculture. When they enact legislation or regulations, these politicians and planners will feel secure, to the extent that the summary document reflects accurately the findings of the studies made, in knowing that the interests of all parties have been served.

There is no easy answer to the rivalry that has historically characterized the relationship between cattlemen and conservationists. Yet, by applying the modern analytical techniques available to contemporary agronomists and economists, it may be possible to reduce tensions and proceed toward proper management of our nation's rangelands. While the formulas for avoiding land abuse which are applied to each type of land (private, leased or public), may differ slightly, the BCA model, coupled with the fixed and variable cost strategy, are sophisticated enough to deal with the full range of options and issues involved in striking a balance between conservation and production.


Barro, S. and Bright, A. "Public Views on Ecological Restoration: Research Report", Restoration and Management Notes, 16:1 Summer 1998, 59-65.

Bork, E. West, N. and Walker, J. "Cover components on long-term seasonal sheep grazing treatments in three-tip sagebrush steppe", Journal of Range Management, 51:3, May 1998, 293-300.

Coppedge, B. and Shaw, J. "Bison grazing patterns on seasonally burned tallgrass prairie", Journal of Rangeland Management, 51:3 May 1998.

Obmascik, M. et al. "Grazing Fees on Public Land may be Hiked", The Denver Post, March 10, 1992, 1A.

Pitt, M. et al. "Using a grazing pressure index to predict cattle damage to regenerating tree seedlings", Journal of Rangeland Management, 51:4 July 1998, 417-422.

Scarnecchia, D. "Viewpoint on objectives, boundaries, and rangeland carrying capacity", Journal of Rangeland Management, 51:4 July 1998, 475-476.

Ward, F., "Chapter 3: Conservation Planning through Benefit-Cost Analysis", Natural Resource Economics, Syllabus, Packet I, Econ 337G, New Mexico State University, Las Cruces, Fall 1998.

Wilson, A. and MacLeod, D., "Overgrazing: Present or Absent?", Journal of Rangeland Management, 44:5, September 1991, 475-482.