By Kenneth Coppock
Members of the Western Stock Growers’ Association in Convention recently in Lethbridge listened with great attention to Alberta’s Minister of Lands and Forests review the Province’s grazing policy over a six year period or since its inauguration January 1st, 1945. The Minister, who incidentally stands in high favor with the stockmen, not having missed a convention since he became Minister in 1935, reviewed the situation with which his Department was faced when he became minister — the accumulation of interest, penalties and arrearages of rentals and taxes. He recalled the meeting with the executive of the Association and the settlement which involved the cancellation of interest and penalties and the spreading of the arrearages of rental and taxes over the remainder of the term of the lease concerned or seven years whichever was less. Then he reviewed the work done by the Department and ranchers in the short grass areas prior to the amendment of the present grazing policy which was to be a 10 year experiment.
The fundamentals of the policy were first, conservation of the grazing resources of the provincial crown lands. It was reasoned that if grass were properly used it would be an asset usable into perpetuity. This meant that crown grazing lands, under the new policy, must not be overgrazed; that there must be a carryover of from 40 percent to 50 percent of grass-cover from year to year. Zones must therefore be and were established according to a predetermined carrying capacity: 1 animal to 50 acres; 1 to 40 acres; 1 to 32 acres and 1 to 24 acres. It was important that no more animals should be grazed than provided for by the rated carrying capacity. Theoretically every ranch would have an inspection by the Province’s grazing appraiser and this program of individual ranch rating is being carried out as fast as humanly possible.
Secondly — The average gain or production of beef from an animal unit had to be determined. Based on experiments at the Manyberries Range Station it was concluded that an animal gained conservatively 250 pounds in weight during the grazing season and if the unit were a cow with calf the weight gain was in the form of the calf. The 250 pound gain was thus accepted as a constant factor to represent the beef produced from grazing on 50 acres in the 1 to 50 acre zone, and on 40 acres in the 1 to 40 acre zone, etc.
Thirdly — The value of the 250 pounds of beef was next to be determined and it was finally decided that the average price of cattle sold on the Calgary stockyards market for the last six months of the year, the months in which grass cattle are normally sold, would be acceptable.
Fourthly — With the carry capacity established, the production factor of 250 pounds of fixed and the variable, which was the value of that beef, able to be determined, the province for its rent of the grazing land would receive a percentage or royalty. This was set at 10 percent and in the view of the producers who were largely instrumental in the formation and inauguration of the policy this was not to be changed over the period of the experiment. The formula thus became for those in the 1 to 50 acre zone, 10 percent of 250 pounds times the average beef price divided by 50. The result was the current rental per acre. The same principle applied to each zone or individual ranch.
The Minister stated the policy had worked well. There were some “kinks” which had to be ironed out in connection with establishing carrying capacities but all rentals had been collected and he felt no hardship had been dealt any stock raiser. He referred to the conditions under which road allowances might be included in leases but the important part of his address dealt with the government’s intention to raise the Province’s royalty from 10 percent to 12-1/2 percent in 1952. He stated it was desirable to have the uniform charge on the lease of all Crown assets.
The stockmen present were silent in their reaction to the announcement and what discussion there was came on a resolution asking the government to use the increase on the improvement of the assets being leased. The Minister agreed to the principle of the suggestion but stated it would not be correct to assume that the government would pay the full cost of improvements — the lessee had some responsibilities,
Cattlemen are notorious for second-thinking and when the convention adjourned the Minister’s announcement was the subject of wide discussion and mild protest. They found it most difficult to express opposition to a cabinet minister whom they had grown to like over a period but their reactions may be summed up as follows:
The grazing policy was to be a 10-year experiment and none of the fundamental factors should vary except the price of beef and an adjustment of carrying capacity in the case of drought, fire, grasshoppers or anything beyond man’s control which would reduce the carrying capacity of the grass rented. Yet in the eighth year of the experiment the Minister proposed to increase the government’s take 25 percent. This disturbed their sense of fairness.
Then they questioned the validity of the argument that the raise of royalty to 12 percent would make the change uniform with those prevailing on other Crown assets. Some have, in recent years, had experience with oil and they know that under one system of royalty payment the charge varied from 5-1/2 percent to 16-2/3 percent. They also knew that in the Special Areas of the Province the grazing royalty had been 8 percent and it is now proposed to increase it to 10 percent for 1952.
They were not clear in their minds at the time whether or not the royalty charge on grazing lands, which if kept improved are a continuing asset, should be as much as that of a wasting asset such as oil, timber or coal. Their second-thinking has cleared this. In their minds the answer is definitely “no”. They reason that a landlord will not ask as much rent for a house or building in which the tenant absorbs all the cost of the improvements and accepts certain limitations on his operations as he would ask in rent for a house or building where there were no restrictions on the tenant and no obligations to take care of the improvements. The low rent asset he considers is similar to the well preserved and continuing asset like the grazing lease the high rent asset he considers similar to a wasting asset like timber, oil and coal.
It was thus seen that the subject is one which leaseholders through the Western Stock Growers’ Association will want to discuss further with the Minister. He is an eminently fair and able member of the cabinet in high regard of all cattlemen, so it is expected this matter will be concluded satisfactorily to all.