Mitigating the “Moral Hazard” of Government Intervention via Wolf/Livestock “Control” & Compensation Programs
Earlier, I wrote about the special treatment ranchers get via private and public compensation programs, and how these government interventions into private property management issues creates what economists call a “moral hazard”, obscuring free-market incentives that would otherwise encourage behaviors that prevent wolf depredations from occuring in the first place.
State Pins Hopes for Wolves on Compensation :
Question: Why would a livestock producer go to the extra effort of pursuing predator-friendly grazing techniques when it’s cheaper to forgo the bother ? That’s what compensation does, it makes it cheaper to forgo the bother.
Compensation is a wonderful response to the livestock industry’s only rational, interest-based qualm. It eliminates financial loss. But is it about time to start asking how well this good-faith response is being received in Idaho ? Wyoming ? New Mexico ?
How does it motivate the behaviors that are necessary to practically co-exist with wolves ?
It doesn’t. In fact, just the opposite. The same would be true for any pest control program. If I was a rose-farmer and a government agency promised to intervene … say, pay for and spray my entire property for aphids should a problem arise, I might be apt to sacrifice a rose-bush or two on the periphery rather than employ any prophylactic myself. It is no different for publicly financed wolf extermination programs executed by Wildlife Services. Many ranchers are more than happy to let go an initial lame calf or two if it means an end to the local wolf pack.
Previously, Ralph gave his take on Brodie Farquhar’s essay which explored the very real difference in attitude toward wolves in the mid-west versus the west.
That difference plays out in very tangible ways with respect to policy. For example, in Minnesota regulatory conditions compliment government interventions into livestock/wolf management that are crafted to compel reponsible behavior, rather than dispel it.
Farmers are required to implement non-lethal and animal husbandry practices to prevent future attacks before any wolves are killed or farmers are eligible for compensation for wolf depredation.
Preventative Depredation Measures
Owners of livestock, livestock guard animals and dogs and/or their permitted agents may take action to destroy wolves that pose an “immediate threat” to human life, livestock, guard animals, or dogs. This action is permitted only on the livestock owner’s property. In the case of dogs, this action is permitted only for dogs under the controlled supervision of the owner. “Immediate threat” is defined as follows: the wolf is observed in the act of pursuing or attacking. The mere presence of a wolf or a wolf feeding on an already dead animal does not constitute an immediate threat.
At any time, a farmer or dog owner may first “harass” any wolf within 500 yards of people, buildings, dogs, livestock or other domestic animals in a non-injurious, opportunistic manner. Wolves may not be purposely attracted, tracked, searched- out or chased and then harassed. Wolves showing abnormal behavior will be reported to an authorized agent for action.
The following conditions apply when taking action to destroy a wolf:
a. A farmer or dog owner will report the action to an authorized agent within 24 hours and protect all evidence.
b. The agent will investigate all reported taking of wolves and will:
- keep written and photographic documentation of the kill site and any instances of poor husbandry that contributed to the attack occurring;
- with farmers but not dog owners, evaluate what, if any, best management practices and non-lethal controls are needed to prevent future attacks and develop a reasonable written and signed plan with the farmer for implementation;
- confiscate the wolf carcass(es).
c. State agents will report any evidence of abuse of this rule.
d. Failure to comply with the elements of this program, including failure to implement in a reasonable length of time the best management practices and non-lethal control plan developed with the authorized agent, or abuse of the program will result in loss of a farmer or dog owner’s eligibility for future wolf damage compensation for a period of one year or until they implement the best management practices/non-lethal control plan.
e. Pelts will remain in the control of the state or tribal authorities and may be disposed of only by donation or sale for educational purposes.
f. This program will be reviewed at the annual gathering of roundtable participants who will make recommendations regarding the continuation, modification or termination of this program.
g. Monthly reports of this program will be made available to the public.
[Emphasis Added]
Including thoughtful conditions which account for and mitigate the “moral hazard” associated with government intervention on behalf of private pursuits only makes sense from a free-market perspective, and it ensures that any public dollars spent such an intervention are spent in good-faith. It’s a matter of fiduciary responsibility.
Why are Westerners not required to take the same common-sense preventative measures before tax-payer dollars are spent to respond to natural threats to their personal property ? Why should public land ranchers not be required, as a condition of permit, to take the same measures in wolf-country before enjoying the publicly bestowed benefit of use of our land ?
There is no reason why western ranchers shouldn’t–at a minimum–have similar requirements.
UPDATE 10/22/10 :
“The majority of Idaho’s cattle producers agree that the free market is best for the beef industry and government involvement only limits opportunities for cattle business.”
~ Wyatt Prescott, executive director of the Idaho Cattle Association
via: Idaho Cattle Association says new antitrust rules would raise beef prices, cost jobs
HA !
Comments
How much public land grazing do they have back there compared to here(say Idaho)? I’ve never been over there and was just curious.
Craig, there is very little grazing that occurs on public land in the upper midwest. The few allotments that there are tend to be fenced in pasture usually adjacent to the farm that has the allotment. They have been on the decline. All of the ones that I am aware of only allow cattle.
Brian,
I don’t disagree with your analysis generally, but one of your premises is flawed in your example. Aphids were not reintroduced as a part of a governmental sponsored program paid for with money generated from sporting goods revenues. The issue is one of the rancher/farmer incurring an additional operating and capital costs which are related to the reintroduction. That seems to be constant inconsistency which some wolf advocates conveniently ignore when they talk about this issue. Another point, is that NRM livestock ranchers (and a few in the Great Lakes) DO NOT incur the costs of predation or prevention of predation because they have no government reintroduced wolves, say in the lower mid-west. How is this a free market when the government, as a part of a federal gives wolves to some and not to others in their “historic range”? Seems to me it is a bit contrived, and yes I understand the complexity of the habitat requirement that may prevent reintroduction to some areas. We have talked about that alot here.
And, yet, another point, MN wolves were not reintroduced, they were allowed to repopulate (perception issue here) and their progeny are now in WI and MI. Some of these issues continue to crop up, about compensation for stock animals killed or injured by wolves. MN wolves are confined to the NE half of the state; MI wolves mostly to the Upper Peninula, and WI wolves are still few but have lots of deer to munch on. MT, WY and ID wolves seem to be allowed to go wherever they want to migrate. I still believe (and so does Bob Jackson) MN ranchers thump wolves that cross over the interstate and the state just doesn’t want to know about it.
But what about the weight loss to the animals that results from increased vigilance, that some of these ranchers talk about, not just cattle and sheep, but turkeys and poultry? These losses are not compensable because the animals didn’t die, but nonetheless are an economic loss to the rancher when he takes the stock to sale. We know this fear of being eaten happens, and the animals spend more time looking than grazing than before wolves, because it also happens to elk and has been studied and is scientifically documented (see Creel studies from MSU).
WM,
I don’t doubt that livestock bunch up in fear of being chased and bitten, and sometimes it is wolves they are afraid of. We also know that there are many predators of livestock in addition to wolves. This is true even in wolf country.
Coyotes make most livestock plenty nervous. There are a lot of them. If your sheep are nervous, it is important to notice that. It is also important to consider all the possible sources of the problem. People jump to conclusions too fast.
I agree people do jump to conclusions too fast.
My point is that wolves are ADDED risk/costs for the operator, not there for seventy or more years. Coyotes certainly do get their share of sheep, but one or more smaller protective herd dogs can usually do pretty well against one or two coyotes, and the occasional but rare pack of up to 4 or 5.
Change that scenario a bit with a pack (up to a half dozen or more) of much larger wolves and even one or two of those big guard dogs specifically bred to protect against wolves have a challenge that sometimes ends with the guard dog dead or injured (who covers those costs?).
Of course, the operator can shoot the coyotes without having to consult someone or wait for some third party to come to their aid (sometimes too late). The extent of this also depends on whether wolves are listed or not.
I gather in the case of MN and WI, they are anxious to give more flexibility to operators to do a little self-help and be wolf managers, which would be possible with wolves delisted and is not now. Let’s see, is it now FIVE times MN has sought delisting only to have HSUS or some other advocacy group sue FWS on some obscure legal theory, the latest being the DPS issue (although a different aspect)which is also at the heart of the current NRM decision?
It’s also important to notice if your livestock are sick. There are a lot of sickness deaths at some places. Then scavengers come to eat the carcasses. It is easy to blame an innocent scavenger as the cause of death.
“The issue is one of the rancher/farmer incurring an additional operating and capital costs which are related to the reintroduction.”
I understand that livestock producers frame wolf depredation as an additional cost, but do recall that it was the government that removed wolves in the first place–paid for, in part, by taxpayers from all across the country.
“How is this a free market when the government…gives wolves to some and not to others in their “historic range”?”
Raising livestock has different risks and benefits depending upon where one lives. The risks to cattle in North Dakota (e.g. cold) are different than in New Mexico (e.g. drought); likewise, turning livestock loose in a wild, semi-arid, mountainous Idaho is inherently more risky than raising them on a feedlot in Kentucky. Seems you’re suggesting that the government should be responsible for evening the playing field (i.e., controlling risks) such that the risks everywhere are roughly equivalent? Seems to me that such an approach works against the free market?
My mother-in-law frequently reminds her grandchildren that “there ain’t no fair fairy.”
JB,
As I have said before everybody should get their own wolves…..before they pass judgment on those who have theirs and are not particularly happy with the numbers or where they are.
There is considerable insight coming from the wildlife agency managers in both the Midwest and the West, who have taken the policy position that Great Lakes wolves should be delisted. I think I mentioned the resolution that MAFWA passed a couple of months back, in which 14 state agencies and 3 Canadian provinces weighed in and said they are recovered. WAFWA cannot be far behind with a similar resolution..
If the ESA is to be strictly interpreted as you have suggested in the past, including the “significant portion of their range” language then everybody should get some. Don’t you agree? Wolves were removed from the East, South and Southwest, with government help as well. So, lets just be equitable – no fair fairy required (LOL). This would go some distance in leveling the playing field as a secondary effect. It would have no link to land ownership, federal or otherwise, just geographic coverage. Heck wolves are already on state and private land in the West, as well as the federal lands. Why shouldn’t Kentucky get their own wolves in large numbers today rather than years down the road (they would get some red rather than gray, if the conservation biologists are to be satisfied)?
WM:
Now you’re talking about a completely different issue. Originally you asked if this could be considered a free market if the government “gives” wolves to some and not others. I suppose Brian’s point (below) about the level of subsidies already provided to livestock producers in the West is a better rebuttal than my (more subtle) argument about “fairness”. Any way you slice it, the market is neither free nor fair.
With respect to the second issue–where wolves should be–my answer is more complicated. From a legal perspective, wolves should be restored to all but an insignificant portion of their historic range. In reality, I think everyone realizes that the suitability of that range will play a substantial role in where we attempt to recover wolves and allow them to exist. I think one of the next legal battles with respect to wolves will be over what habitat is considered “suitable”, which will determine any subsequent reintroduction/recovery attempts.
I’m not sure why you’re hung up on the Great Lakes population of wolves? My perception is that most people that post here (myself included) agree that they are recovered and should be delisted. In fact, my conversations with folks at Defenders suggests they will publicly support delisting this population. The hold up is an animal rights groups, not wildlife advocates.
JB,
“Now you’re talking about a completely different issue. ”
Actually I am talking about the same issue, although it is a little broader: What are the external costs (and benefits) of wolves on the landscape, including where they are, in what numbers, and who are beneficiaries or cost-bearers of the impacts of their presence. If one thinks about the overall costs to subsidize the impacts of wolves to ranchers, it would be incredibly small. Brian, on the other hand, is using the argument to reinforce his larger issue – which really is a different issue and that is whether welfare ranching with grazing subsidies should be continued at all. Wolves are a convenient tack on to leverage the argument.
______
Jay,
You really need to see how much money is spent on state Department of Health and Social Services programs where you live or even a mid size state, how much is spent to build a dam, a highway, an airport, or a new federal office building. $400 million is about the cost of two lightly used Boeing 747’s, or four 6-15’s.
To you and me it is alot. To your Congress person, it is not enough to raise an eyebrow.
You don’t see the difference between tax payer dollars that benefit the taxpayers (airports, roads, and dams–infrastructure that everyone gains from) rather than one single special interest group?
“Actually I am talking about the same issue, although it is a little broader: What are the external costs (and benefits) of wolves on the landscape, including where they are, in what numbers, and who are beneficiaries or cost-bearers of the impacts of their presence.”
That’s an interesting question. Let me ask you, would you want wildlife management agencies (or more broadly speaking, government) to ask the same question with respect to every species? And if a species cost (in 2010 dollars) was found to outweigh its benefits, should it be eliminated from the landscape? Or should we attempt to minimize its impacts?
WM,
I think that you’re right about the fact that many western ranchers feel entitled to government hand-outs and subsidized operating costs (i.e. pest control, etc. etc. etc.).
Perhaps it is because wolves were re-introduced, ranchers are probably apt to suggest as much, but maybe not. I would argue not.
Livestock enjoys government policy that socializes the cost of livestock production for all sorts of things that aren’t re-introduced like water, land, taxes, liability, feed, fuel, etc. etc. Western livestock production is an endeavor that, by its very nature, relies on government intervention.
A few examples include Wildlife Service’s control of coyotes (not re-introduced), the effectually subsidized Open Range laws, so-many-more-examples, let’s count along etc. that any rationale for why western ranchers ought enjoy these subsidies on account of re-introduction is probably more a post-hoc rationalization than anything else. The “control” of coyotes and other government interventions fosters the same “moral hazards”, obfuscating market incentives as do wolves. Livestock’s sense of entitlement, its externalization of operating costs, and its perpetual insistence/addiction to being victimized by the natural world (so Big Brother, you gotta help us!) extends far beyond wolves.
Additionally, wolves were eradicated to facilitate livestock production across the west in the first place. If we are to beckon back to the injustice of wolves being foisted upon hapless ranchers (2 decades), then I’d ask that we consider wolves’ extirpation, its origination, and the millennia that they persisted on the landscape prior to that point as well.
So, what do you suppose is the healthy approach to take moving forward, from a market perspective ? Continue post-hoc rationalizations for the socialization of costs and the privatization of contrived profits ? OR to begin finding ways of pursuing pragmatic solutions that recognize, incorporate, and mitigate market forces that may encourage or undermine the policy objectives that we seek in implementing particular policy ?
Brian, in reference to your comment about externalization of livestock production–I don’t have the numbers in front of me, but I suspect you may have the information at hand…you should provide the budgetary information of the Fed. Govt (BLM and USFS) that deals with the livestock livestock grazing allotment program. Like I said, I can’t remember where I found it, but it costs us (US citizens) something on the order of 3-400 million dollars to administer the grazing programs that bring in something like 6-7 million from grazing fees. If a good chunk of these Republican ranchers (which I suspect most are) are against “socialism” and government handouts, then no doubt they are ready to pull their cattle off public ground.
If one goes back far enough in our history of the settlement of the West, it becomes clear the subsidies were for exactly that purpose – get more people to the uninhabited portions of the country and provide the infrastructure, for even more to come. You will get no argument from me about the continuing sense of entitlement built up over the years, or the extensive subsidies necessary to continue that policy of settlement of the West. However, subsidies of all types, and very often to agriculture, have been a part of the way we collect and spend federal tax dollars, and it does not just affect the West. Think, milk, tobacco, land and water conservation programs of the ASCS/SCS (now known under other agency and program names in every state. Peculiar to the West, but still a part of this gravy train were the massive water develpment projects like th Central Arizona project, BPA for hydro-power generation and development of the Upper Colorado river basin by BOR. Then we have these nuclear reservations in ID and WA. Big business benefits from this as well. They will tell you they create jobs in these states, and without the long history of subsidies there would not be companies like Thiokol (space shuttle), Micron, HP (computer maker with plants all over the West), and so many more I can’t think of right now.
And, Jay, if you go to the APHIS/WS website and drill deep enough you will find lots and lots of states outside the West that recieve resources and services to eradicate and protect against threats to plants and livestock. The costs are huge. The threats are of various types, but the costs to deal with them come from the federal coffers. Alot of Republicans, but Dems, too.
Grazing fees and policy, as we all know, under the Taylor Grazing Act, FLPMA etc., are indeed disgusting beyond belief, long ago in need of change.
The politics of how and where your tax dollar goes and does not is not fair (oops there’s that word again), and never will be. The power brokers continue bring home the bacon, so to speak, for their respective states. It is how the game is played, and there often is no real justification for who gets what.
But, Jay, don’t just single out agriculture in the West as the sole beneficiary of programs where costs to maintain a program vastly outweigh the cost of administration. A sum like $400 million is barely pocket change in the federal budget. Dig deep enough and you will find dozens, maybe hundreds of examples of waste worse than that. One example that lingers on is marginal military bases in different states that continue on year after year with clear justificaion to close bases and consolidate them to save on costs. Not in my state, is always the reply from powerful legislators who protect their own! Why should grazing in the West be much different? However, compared to other countries, I will at least venture that we are not among the worst.
We aren’t talking about other programs, we are talking about wolf control as it relates to livestock production. And I beg to differ: a net loss of 1/3 of a billion dollars is not trivial or common, unless you want to get into the military industrial complex…or NASA.
Jay,
See last half of comment to JB, above.
Jay,
For an assessment of the estimate of full costs associated with the federal grazing program compiled and analyzed by economists Moskowitz & Romaniello check out : Assessing the Full Cost of the Federal Grazing Program (pdf)
For a summary of just the shortfall on grazing receipts on BLM & FS lands click:US GAO: Livestock Grazing: Federal Expenditures and Receipts Vary, Depending on the Agency and the Purpose of the Fee Charged …
WM,
minimizing the cost of the federal grazing program by suggesting it’s insignificant compared to other expenditures is irrelevant. If that’s the kind of logic you believe we should wade into, I’d suggest we evaluate the economic contribution of public land ranching as compared to GDP in any western state — or how about the nation as a whole (or even just the national livestock industry). the economic contribution is so minuscule as compared to any other industry (saying nothing of its own livestock production industry itself), as to render the activity (and its continued subsidization) absurd. If economic development were the goal. those same dollars would be better spent hiring agency staff (or even private contractors) to wander public lands with hoppers to collect native seed for restoration initiatives and the like … contribute to recreation, fisheries, wildlife production, etc …
The bottom line, from my perspective, is that identifying and decrying the gross abuses of fiduciary responsibilities elsewhere does no absolve the federal grazing program from its significant fiscal and environmental abuses.
the program kills wolves, pollutes water, precludes fish & wildlife, and destroys habitat at massive scales ~ and we the tax-payer are paying to do it ~~~ for what ? economic ends ? hardly … as mentioned above, i purport that more economic stimulus could be accomplished via initiatives that contributed to restoration, rather than degradation …
it’s still around cuz as you yourself acknowledge — it’s always been that way. The inertia of the use lives on.
That’s not good enough reason. It’s not appropriate to the host of values to which it impacts ~~~ including wolves.
Brian
It will not end in your or my life time.
I’m glad those being deprived of equal rights (women, minorities, etc.) didn’t take the attitude you have Elk.
Brian,
Please don’t confuse my expanation of why or how ithe grazing subsidies continue to exist, with any support for it by me. Let’s be clear. I have strong disdain of it.
Where you roll the issues together, I was just trying to dissect the issues, because they have different origins. I believe the wolf issue can be separated, and should be from welfare ranching. You have a myopic view of the West as you and your WWP employer view it. Mine is broader.
For example, NOT every rancher utilizes federal grazing leases. As wolves continue to expand range the number of impacted private lands ranchers will increase, especially as they work their way into OR and WA, and parts of CO. Impacts to private lands ranchers including those turkey farmers has always been the objection in the Great Lakes states, and remains a strong reason the states of MN and WI want to assume their rightful place as managers of those wolves.
If I understand your view, you could give a rat’s ass about whether these private (non federal grazer) ranchers or livestock owners have to pay additive costs associated with wolf reintroduction, or the casual owner of horses or dogs who have to incur costs as a result of wolves.
I think if there is a case of subsidy entitlement to be made, this is clearly it. But, even then, it doesn’t go far to quell the emotional loss when Fluffy or Tonka go missing the night the wolves showed up, or some independent sheep rancher loses 60 sheep in one night, two guard dogs and then has to go through the bureaucratic process of proving up the claim, or on the preventive side taking a couple hours every day to put up a fladry (works only for sheep in a practical sense).
———————————–
JB,
++Let me ask you, would you want wildlife management agencies (or more broadly speaking, government) to ask the same question with respect to every species? And if a species cost (in 2010 dollars) was found to outweigh its benefits, should it be eliminated from the landscape?++
Not every species and surely not to eliminate them. Just to acknowledge social, ecological and dollar costs in a formal framework for decision-making, when determining the numbers and distribution of certain species whose presence on the landscape presents challenges (and opportunities) that others do not. That is, in my opinion, a flaw of the ESA.
WM says:
WM, I can see why you would want to compartmentalize the issues. We’ll disagree on whether that’s appropriate or not.
As I see it, debating about wolves and wolf management without talking about grazing is an absurd proposition. Livestock interests pull the strings.
However, the fact remains, whether western grazing takes place on public or private ground has very little to do with whether or not subsidizing impacts behavior in a negative way if the policy objective is co-existence and resolution of a perceived problem. I think it’s fair to suggest that it does.
Your wish to parse the issue away from public land grazing indicates to me that you are uncomfortable defending your position with respect to public land ranchers ?
If that’s the case, and you believe that the entitlement ought be bestowed upon private-land ranchers, then say as much, and we can continue to have the conversation about whether private-land ranchers are impacted to the same degree, about whether they ought be entitled to government-funded compensation/eradication efforts, about whether those efforts foster the same “moral hazard” as if their stock were on public ground, about whether that’s a desirable policy outcome, and maybe even about whether private-ground ranchers are actually standing on their own two feet, economically speaking, as it is now (they don’t) etc.
The fact is – in the arid west – livestock ranching (public-ground or private-ground) is not a viable economic activity without significant government-intervention on its behalf. That intervention has significant consequences with respect the public-interest and public values ~ determinative consequences with respect to wolves & wolf management. Those consequences are worth debating and pounding out.
Brian,
When we talk about the “arid West” there is alot more land that is grazed than the federal open range land, butted up against confir forest, that I think you most commonly refer to. Maybe that is our respective difference – a different frame of reference for the “West.” I have lived, recreated and worked most of my life.
For example, I was in Eastern OR about a month ago. High desert, parched land for sure by late summer, especially this year. The John Day River (third longest river in the continential US) snakes its way through the valley bottom of much of this area, then turns north to dump into the Columbia about 25 miles east of Hood River. This meandering, low gradient stream is the life blood of the area. Irrigated alfalfa fields, pastures and crop fields line its banks in many areas. A number of these fields have cattle – lots of them, mostly cow – calf operations, standing right in the middle of the irrigation sprinkers. There is no federal subsidized grazing in most of these areas of high desert, to my knowledge – at least not extensive; these cows (and some sheep) are on privately owned, fenced and irrigated land. There are quite a few deer in this high desert, suitable for the wolf menu, and this would be great wolf habitat because there are few people. But, oh those cattle, especially the calves, will be so much easier to catch.
When wolves come, as they surely will, ranchers will have to contend with an ADDED expense of preventing against loss (better housekeeping and maybe some dogs or donkeys, whatever), as well as incurring the direct (kills by wolves) and indirect (weight loss thru predation risk) costs of wolves on the landscape.
Their ranching, to my understanding, is economically viable today. Will it be tomorrow in the presence of wolves? I don’t know, but if society wants them, I do not think some subsidy for wolf related impacts in this area (and maybe others) is out of line – federal or state. As for those federal grazing types, again, I think the issue of below market costs for grazing fees need to be treated separately from a newly imposed risk in the form of the cost of managing livestock in the presence of wolves. I don’t think you and I are likely to get past that distinction.
This is complex economics that begs for creative solutions, and I think I mentioned before a chapter of Charles Wilkinson’s “Crossing the Next Meridian” (1992) in which he discusses the intricacies of the ownerhip and valuation of the family (or corporately owned) ranch which is tied to the grazing leases. Without the lease, the value of the ranch property goes way down. I bet there are other academics that have written on the topic since, in greater detail.
Yes, work the issue to get grazing leases up to market prices or eliminate them altogether (in a phased responsible way), but don’t confuse the issue by throwing the additional costs of dealing with wolves in the mix. It is a separate matter. The grazing thing will sink or float on its own. Afterall, some wolf advocates keep saying it is a minor, minor expense to ranch operators. If it truly is, then a separate tiny subsidy for all livestock oparators in wolf country should not be that objectionable.
It is intellectually dishonest to try to sell it both ways.
WM,
The issues are inextricably interrelated.
EX: The explanation for the low fee (below market) per AUM associated with public lands ranching was to compensate for extra costs associated with the use of public lands, including predation by wildlife – which one could not deny implicates wolves.
Would you like more examples ???
It is “intellectually dishonest” to ignore these facts, and to ignore that they are interrelated, as a matter of insistence by livestock producers themselves. The fact that welfare ranchers get to ‘double-dip’ with the low fees + compensation/control does nothing to minimize the relevance of the “moral hazard” in this context.
As for the “extra” costs of wolves “imposed” on private-land ranchers:
I’ve – successfully, I believe – argued that this standard could easily apply to every/any industry. There are always “extra” costs associated with doing business that are foreseen, unforeseen, imposed by government/social imperatives/policy-choices that are rarely offset by complimentary subsidies – think OSHA, minimum wage, etc. etc. etc… The rest of us just have to deal with it. Not ranchers ? hmmm… another Livestock exception to the rule …
The fact that private ranchers are unjustly enriched today by yesteryear’s eradication of wolves ought not indemnify them against their obligation to take care of their own property, nor entitle them to compensation, in the context of a social decision to make restitution of the original eradication of wolves.
Again, even as there ought be no obligation to compensate ranchers given the roll-back of Livestock’s unjustly enrichened wolf-free landscape, the “moral hazard” of any crutch (whether it be compensation/government control”) creates a disincentive for ranchers to take preventative measures, clean shop, which ultimately is the most efficient – and ought be the socially preferred – outcome. That obfuscation of any market incentive to take care of one’s own livestock is still wrong, from a free-market perspective – and it’s wrong from a public-interest perspective.
Ultimately, this Livestock exceptionalism to which you suggest ranchers (whether private-land or public-land) ought be entitled is absurd, particularly in the context of an industry that is so bloated with subsidy and extra-market crutches as to render an accounting of its actual viability in any free-market competitiveness context impossible.
feedlots are subsidized, private-pasture is at least indirectly subsidized, the whole industry enjoys massive direct and indirect subsidies etc. etc. etc. Those direct and indirect subsidies are necessary to compel artificial ‘viability’.
When policy-makers decide where public dollars ought be appropriated, they have an obligation to the tax-payer and the public interest — NOT exclusively and solely to livestock producers. That fiduciary responsibility is better ensured by an understanding of a particular policy’s (compensation/control) tendency to foster a “moral hazard”.
Mitigating the moral hazard via enrollment in programs which qualify participating ranchers to public-compensation/control conditioned on their demonstrated commitment to implement BMPs is good policy. Spraying cash at whining ranchers is not good policy.
WM says:
Would it be in the absence of subsidy (see above) ? probably not. Will it be with the increase of fuel costs ? probably not. will it be with an increase in costs of feed ? probably not. will it be in the context of the impending water wars ? probably not. will it be in the context of climate change … etc. etc. etc … probably not.
Does that mean we should insulate them against all of those “threats” to their livelihood ?
no doubt we will continue to hear ranchers whine and moan, and otherwise cling long & hard to their ‘victimized-by-the-natural-world-&-market-forces’ narrative about the ‘unjust’ nature of it all ~ which the rest of us are increasingly subject to ~ but to which – ranchers claim – they ought be insulated against with public dollars…
Brian,
Your advocacy suffers from tunnel vision, and possibly bad research. There are huge subsidies given to agriculture (and other industries) in very matter of fact ways. The dollars are in the billions – corn, cotton, tobacco, rice, etc. – without any justification whatsoever. There are subsidies given to the aerospace industry (which have been the subject of EU opinions recently), some industries/businesses get tax credits or other complicated tax writeoffs that make it through federal tax laws that only the sponsors of the law, and the corporate accountants understand, which add up to nothing more than subsidies. SUBSIDIES, BRIAN, SUBSIDIES – there I said it twice, in hopes it sinks in (LOL).
Where to begin. The fact that grazing leases are below market and are poorly administered is disgusting. Again, you get no argument from me. But, in the total scheme of things relative to our national government it is miniscule, a tiny, tiny, pocket change tradeoff when rural states bargain in Congress as they protect their sacred turf. And, if you think about it, if they are below market, will they be utilized if they are increased substantially? One school of thought is that they would not, and that then raises the question of whether a new price would be representative of the marketplace (And, yes I know about the efforts to retire them by buying them up. It is a great idea). Yes, I will support getting rid of it all over time, but to fold the wolf impacts into it is again intellectually dishonest.
Comparing wolf reintoduction external costs, to costs imposed by federal health rules like OSHA, Superfund (often covered by liability insurance), or other programs is still kind of an apples and oranges comparison. Nobody is going to die or grow an extra testicle because wolves are not on the landscape – and dare I mention EVERYWHERE. I want wolves in Kentucky, Texas, CA, NY and IA. You don’t think agriculture impacted by wolves in those states wouldn’t whine and ask for subsidies for this new and unforeseeable expense once their livestock starts getting killed or losing wieght in the presence of large numbers of wolves? Help me out with this one Brian. How would you approach that problem, when it happens?
WM
Do not waste your time on this, everyone has an opinion. Thankfully most opinions do not become policy.
I am leaving for the Cenntenial Mountains hunting in a few hours. I t will be interesting to see what impact the wolves have had on the elk since the last time I was there.
Elk,
no doubt your anecdotal experience will be the last word on the matter ! 😉
once again — subsidies happen … it’d be interesting to see how those subsidies in other industries obscure market incentives that would otherwise realize social values without government intervention …. i’m less interested in those other industries then those subsidies that appreciably impact wolves … and because of the relative proximity between wolf habitat and public lands, those issues are inextricably intertwined – as robustly reflected in public policy.
there’s a war in the middle east … much more grandiose and conspicuous of an injustice — that doesn’t make the widespread slaughter of wolves in the west ‘OK’ … so too it is with subsidies, though the stacked subsidies with respect to agriculture/livestock-production are remarkably significant.
again ~ i’d argue that it’s much more “intellectually honest” to compare the relative subsidies of livestock production (and/or public land ranching) in a state or region to the respective contribution~cost/benefit that particular industry has to a state or region’s GDP, environment, other social values, etc.. In other words, how much government subsidized value goes in to a particular industry, versus how much value is contributed back, socially. That makes more intellectually honest sense to me in evaluating whether a subsidy is socially justifiable than whether or not bigger subsidies exist elsewhere.
WM:
I would suggest that the model of compensation/control in Minnesota, as demonstrated above in the post, is more appropriate and socially justifiable than the carte blanche government hand-out as administered in the West. that’s probably how i’d approach the problem – that’s sort of the (at least implicit) thesis of my post, don’t you think ?
Brian….thanks for the post and your arguments. Makes sense to me! I’m afraid that WM’s reasoning is why the administration is doing little to nothing on ranching subsidies, compensation programs etc. although I would hope it would not make such callous arguments. There are just bigger problems in their view. How to elevate the issue in the public consciousness? I don’t think abandoning the mainstream political process is the answer. Kucinich and others, I don’t think so. Look what backing Ralph Nader did for us. Thanks again for your astute thoughts.
I think Brian’s vision is 20/20.
Nobody’s arguing the fact that all sorts of things are subsidized. We’re arguing the appropriateness of livestock/ag subsidies.
The fact that livestock/ag subsidies are tiny pocket change in the grand scheme of things is a ringing endorsement for their end. The disproportionately large amount of ecological devastation that they wreak could be ended for a small price. It’s a bargain!
The point re: OSHA, minimum wage, etc. is a broader one: TIMES CHANGE. Who we decide to rescue and insulate from change should be fully vetted thru public discourse and decided on the public interest. Not hidden from public view and sneaked in through riders, etc. That broad public discourse is not happening, for the most part, with respect to ag.
~ Wyatt Prescott, executive director of the Idaho Cattle Association
Idaho Cattle Association says new antitrust rules would raise beef prices, cost jobs
“The majority of Idaho’s cattle producers agree that the free market is best for the beef industry and government involvement only limits opportunities for cattle business.”
I agree completely. Let’s turn off the government spigot and let these folks bear the full force of the free market. Personally, I’m happy to not buy beef either way.
I love being able to purchase top sirlion steak for $2.99 in the reduce price bin. Maybe tomorrow the Winchester will speak and elk steaks will be available. The true cost of elk meat is $4 or $5 a pound.
The problem – only alluded to in the article- is that there are fewer and fewer meat packers. These few (oligopoly) remaining consolidated packers are offering lowball prices to the cattle owners and feedlots. They do two things. Force low prices to buy the beef on the hoof AND, they sell it wholesale at inflated prices through their collusion and price-fixing. At least, that is what is alleged.
So, lets just raise beef and slaughter them only in TX and maybe IA (with no local or regional markets). Next time you go to buy a pair of US made dress shoes, hand bag, or a nice steak at outrageous prices, you can thank consolidation and a free market place for the result. While we are at it, no subsidies of any kind to agriculture including corn/livestock feed producers either.
Soyburger, and a pair of grass sandals, anyone?
“So, lets just raise beef and slaughter them only in TX and maybe IA (with no local or regional markets). Next time you go to buy a pair of US made dress shoes, hand bag, or a nice steak at outrageous prices, you can thank consolidation and a free market place for the result. While we are at it, no subsidies of any kind to agriculture including corn/livestock feed producers either.”
Reality check. I haven’t heard anyone advocate “no subsidies of any kind for agriculture.” I happen to agree with you about free market economics–too many perverse incentives sans regulation; fortunately, total deregulation is not going to happen. However, it is ironic that after Enron, the gulf oil spill, and the near bank collapse that sank our economy that “free markets” and “deregulation” continue to be a popular mantras among conservatives.
As to subsidies for agriculture… The purpose of a government subsidy is ultimately to promote the public good (i.e., to benefit society). As it stands, government subsidies have led to a situation where the foods that are least healthy (e.g., fatty foods, products loaded with high-fructose corn syrup) are among the least expensive [have you ever gone into a gas station and bought bottled water–it costs about the same as buying a soda]. I would argue that agricultural subsidies (in general) should be shifted such that they ultimately encourage the consumption of more healthy products (e.g., green vegetables, fruits, whole grains) and discourage overconsumption of meats and other high-fat or high-sugar foods.
JB,
++I haven’t heard anyone advocate “no subsidies of any kind for agriculture.”++
What you have heard (from Brian, Jay and others) is selective removal of subsidies for ranchers in the West. No problem for me personally. I think it should be done, but many sectors of agriculture should also take the hit. The logic for selective removal of subsidies gets a bit fuzzy when subsidies like those for corporate agri-business in the Midwest and tobacco farmers in the south remain. Seems those are much larger dollar subsidies by orders of magnitude over grazing in the West. And, can anyone make an argument for keeping tobacco subsidies. Cotton is a little more difficult.
You will not find me among those advocating deregulation. Business, by its very nature exploits all opportunities, and will do so with little moral conscience. Regulation deployed judiciously and proactively has a strong role in our society.
Agribusiness (think Archer-Daniels-Midland, ConAgra, McDonalds, Nabisco, General Foods to name a few), want you to eat that fatty beef, corn syrup, and chemical additives, and buy tobacco, and they have the political lobbying clout to continue it. I would love to see a national administration go after the food/tobacco Mafia.
Cutting off select subsidies to agriculture would be the place to start, but denying just compensation to ranchers (especially non-federal grazers) for wolf related losses in expanding wolf country does not make sense to me. Couched as a “moral hazard” that encourages sloppy ranching practices, it doesn’t even come up on the radar for anyone but the wolf advocate who wants cattle and sheep off the range period.
Reality Check.
If water policy, construction of infrastructure, and agriculture were left entirely to free market forces, there would be almost no agriculture in southern Idaho. Southern Idaho, remember, is semi-arid to arid and almost nothing would grow without irrigation and Idaho, in general, is cold and has a short growing season. The main reason it is famous for potatoes is because little else will grow.
If the free market had its way and all decision were based on what would be most economical, Idaho’s water would all be channeled to California’s Central Valley where they have a 365-day-per-year growing season and irrigated land is worth 10 times what it is in Upper Snake River Valley. Channeling all the water in southern Idaho to California would be one of the biggest economic boons to the American economy of the 21st century. When can we start?
Further, the falling water that runs down from higher elevations to lower elevation has economic value since it can generate hydropower. The irrigated farmland in Fremont and Teton Counties, for example, are very uneconomical because, due to the very short growing season, even irrigated farmland is marginal and that water would produce more economical value if it were allowed to flow downstream through the many turbines in the many dams on the Snake and Colombia rivers rather than be subjected to evapotranspiration on farmland.
So all you good little patriotic farmer-rancher capitalists out there, BE GOOD AMERICANS AND SELL YOUR F*<KING WATER TO CALIFORNIA!!!
PS: WATER RIGHTS ARE A FORM OF COMMUNISM!!!!!!! LET’S LET THE FREE MARKET DECIDE WHO GETS THE WATER!!!!
🙂 😉
You would be hard pressed to make me give up my water rights after I paid over 25 grand to drill that damn 500 foot hole in the ground!
PS: WATER RIGHTS ARE A FORM OF COMMUNISM!!!!!!! LET’S LET THE FREE MARKET DECIDE WHO GETS THE WATER!!!!
Communism is the common ownership of all land, production, industry, and everything else. Water rights are owned by an individual and have been adjudicated by a government court. To take water rights without just compensation is the start of Communism
Save Bears
The cost to drill a well is $20 to $25 a foot, why was yours $50 a foot. I would think where you live that the water table would be approximately 50 feet, unless you live on the top of a mountain. Where you ripped off ……….
PW,
In most states – yes states and not the federal government [except a narrow developing body of federal reserved rights} the water belongs to the state, subject to the rule of prior appropriation. Each person, with a right protected by time of first withdrawl and recording of that right has the priority opportunity to use that water as his property for personal gain, as long as he does not damage it (returning some to the stream). This is a usufructuary right. He can sell that right, sometimes at substantial profit, to anyone as long as it doesn’t adversely affect the next priority user(s).
Tell us, PW, how is this communism?
Elk,
No, I was not ripped off, we just happen to be in a very narrow area that they had to hard rock drill and they kept going down to get to a stable water source, just my luck, both of my closet neighbors hit water at 73 and 106 respectively, but I never run out, never get hot, never get cold, just a nice cool steady stream of water 365 days a year..
Both of my neighbors have trouble with their water supplies being stable year round, depending on the snowfall the previous winter…
The Hydrologist that came out after the well was drilled, studied the area and took many water samples and surmised we are in a deep rock glacial stream that originated at the end of the last full blown ice age..
It was quite an interesting bit of study they did.
Why did the Senator from Idaho, Larry Craig, proclaim that the water in the upper Snake River in Wyoming belonged to Idaho a couple of years ago?
So if Wyoming owns all the water in the South Fork of the Snake River, except maybe that subject to prior appropriation, can Wyoming build a dam at the Idaho border and pump Snake River water over Hoback Pass into the Green River where it can flow into the Colorado River and be sold to Arizona and Califorina?
Wyoming and Montana have been fighting over water rights for several years now, if I remember right Wyoming lost the last go around…
Elk,
If communism is strictly defined by common ownership of property, industry, and everything else, why do so many conservatives lable welfare, human rights, federal subsidies, and almost anything that is not in a free market as a form of communism?
When the goverment controls who uses water, rather than the free market, isn’t that goverment control contrary to free market principles? We are not talking about owning water, we are talking about goverment controlled and goverment enforced RIGHTS to use water. It is akin to a right to eat from God’s green earth or a right to live on land anywhere in America as did the Native Americans. Why should a goverment protect water RIGHTS and not protect the RIGHTS to use other resources such as natural food or the use of public land or ability to breath clean air. What is so special about water rights in a nation where people do not even have the RIGHT to feed themselves?
Did you know that in ancient Rome, people had the right to eat farmers crops. They could not take crops from the field. They could only take what they could eat. But they had the RIGHT to eat a farmer’s crops. Why have we extiguished rights similar to these while we have strictly enforce water rights? Why do we enforce water rights in such an uneconomical and anti-free-market manner? Aren’t they a redistribution of wealth and an unjustifiable intrusion into free market captialism? Wouldn’t be better if water was auction off to the highest bidder each season in a tuely wonderful free water market?
I am just kidding about all this BTW.
If only those advocating communism understood where their convictions for this form of lifestyle (govt.) comes from….evolutions extended family makeup. The “cause” can be there but the loyality never will be functional outside blood related kinship. Thus the further groups of people become removed from extended families the more dysfunctional the emotions become in application for use of these groups.
There, I solved the worlds problems…or rather just let everyone know what they are going to do forever…. until they figure out why they do what they do. Of course then despondency sets in…a goal never achievable.
Of course on the other side there is the direct need for individuals to start their own clan no different than lone wolf males search out new territory. Thus we have the opposites of “communists who seek out “democracy” which in reality these folks get mixed up emotionally with the desire for “free enterprize” and “capitalism”. Both ends of the spectrum are equally doomed to failure as those proponents envision it “working”.
PW,
And then, of course, some creative folks in Northern Colorado figured out you could suck the Upper Colorado River nearly dry and run it through a series of transmountain diversion tunnels through the Continental Divide, to the Front Range of Colorado and eventually dump what is left after several re-uses into the Missouri River. This too could be sold, at handsome profit, as long as it remained within the land boundaries of the Colorado-Big Thompson/Northern CO Water Conservancy District.