Nero Cowboys

[bombay_43]

Horse: You have not addressed the original cost of the lease. I told you, you can purchase a grazing lease just like the rest of us did! They come up for sale all the time.

Government are the ones who allowed this to take place. I don't think you want to see the whole picture here!

When leases were offered to the farmers for just the cost of renting it, 20 or 30 years ago, it was a different senario. Some farmers have paid substantial prices for grazing leases. I don't feel they are All getting the free ride that you imply.

[cowman]

Bombay: Of course they aren't getting a free ride. The price of the leases has risen to reflect the "exploration fees" that might be available. And you are definitely right the government allowed that to happen and then turned around and tried to welch on the deal...with the encouragement of the oil companies who thought they could get a sweetheart deal!
There are no easy answers to this problem, as Ralph Klein found out when Jack Horner and the boys buffaloed him! And hey maybe better that you old cowboys get some money out of it than the government? At least you guys spend it in the local community rather than pissing it away like the government would?

[Horse]

Well mabey I dont see the whole picture but I can see that if I bought stocks in a company selling wigets and the govmt decided that widgets are to be taxed to death or some such thing I would lose my investment real quick. So if I paid for a grazing lease and the govmt decided to do the right thing and make a level playing field for us all and at least up the grazing fees to private rates mabey I would be more sympethic.
Threr is a lot of support for these leases to be put up for bid at 10 yr intervils instead of renewal. That sure would establish a price in a hurry wouldnt it.

[cowman]

So how much are the grazing fees? You never hear what they are. I do know that the community pasture fees aren't such a great deal by the time you factor in your trucking costs. My neighbor got 25 cows into a Community pasture type deal and he figured it was a pretty good deal at $21 AUM after he'd included the price of his trucking. He was less impressed in the fall when he got 2 less calves back than what he sent!

[Horse]

Cowman the fees are 1.39 in northern alta Central 2.32 Southern 2.79 per A U M Now I would say that is a sweetheart deal And if someone wants to pay me for something I dont even own just send them over. If the govmt was to pay compensation how many leases would stay in the family but be sold for large sums so they could hold out thier hand for it. Much like suffield where the people around there were so mad because the millitary moved thier little gold mine of horses and free range out on them.

[Horse]

P S if you go to www.agri.gov.ab.ca/publiclands/publan09.html that will give you all the info as to acres and revenue.

[cowman]

Well I can't seem to get into that site. But those are pretty cheap rents...I just assumed they were higher.
So how much does a lease cost? I know of a couple of fairly large leases in west central Alta. where the grass is pretty lush and the oil activity is wild! Those ones should be worth a pretty penny?
One other question: Do you have to put cows on these leases? Could you say you were just giving the grass a rest sort of thing? I mean lets face it, on some of these leases the real money maker is the exploration fees not the grass. In fact the cows are nothing but a darned nuisance?

[cowman]

One other thing I forgot. The $4/acre drought payment last year was paid on every acre. I believe this applied to the leases too? So if you had a lease out in the desert where it takes a lot of land to support a cow the money could have been lucrative? I wonder how those payments stacked up to the grazing fees?

[bombay_43]

I can’t get into that site either cowman. Horse is correct in his fees for Northern Alberta although I believe they do change every year. However they do have a minimum of $50 per lease, so if you have a lease that is only ½ acre along your property, you still pay that minimum.

You do have to run cattle on your lease, or you loose it. You have 2 years to fence it, or you loose it. If you overgraze, you loose it. The amount of land you are allowed to clear on your lease, is decided by the crown. I think approximately 15% is cleared on my leases, and due to conservation, no more can be opened. Permission must be obtained for any farming activities, dugouts, etc. Several years ago, we were told to clean up the Canada thistle growing along the lakes and sloughs on our lease.

I own several leases, some I paid for, some I was given. I own 3 times as much deeded land, as lease land, and we also rent from private farmers,so in all fairness, I think I have a pretty good grasp of what is what.

My next door neighbor offered me the opportunity to purchase his lease which bordered mine, 8 years ago. At the time there was no payment per acreage for droughts. I believe this was a “first”, last year.

He had a lease of approximately 120 AUM, and somewhere around 5 quarters of land, including some fractions (so taxes would be somewhere around $500.00 per year). There were no dugouts as cattle had access to natural bodies of water. My neighbor wanted $40,000.00 for his lease. There was oil or gas income on that lease, that would have seen the 40 thousand paid off within 15 years or so. Providing those leases remained in effect.

This land would have allowed us to graze 120 cow/calf pairs for 1 month, or 30 cow/calf pair for 4 months. AFSC did tell me this was a terrific deal! After some discussion, I turned my neighbor down. He sold that same lease several years later, at considerably higher rates!

I have heard of several leases selling in our area, and it is my understanding that leases vary in price according to deeded land. Not all leases up here have oil and gas revenue, and one of the leases that we own, has lots of activity, but no income to us, as it was there prior to us obtaining the lease. We have had several oil spills on our lease, with no notification, even though our cattle were present at the time! Environment was on site at least twice without us being told. One pad that was reclaimed, also without notification, had the entire fence line bulldozed, allowing our cattle to mix onto the adjoining lease holders land! No they did not have to notify us, our name was not on that oil lease even though we pay the land taxes and the grazing fees! (and yes it was my fence!) It was eventually replaced, but the cattle chasing was done by the farmers, not the oil companies, and it took weeks to sort out!

As I recall, last years acreage payment was made on all rented pastures. Native pasture (grazing lease) paid 4 per acre, perennial tame forage paid 10 per acre. Whether you rent it from your neighbor or you rent it from the crown, shouldn’t matter. I made fairly good money on my privately rented pasture as I suspect everyone else did. In hind sight, I guess we should have paid that acreage payment back to the land owner??

If you are going to compare things, compare apples to apples! I certainly do not pay thousands of dollars up front to be allowed to rent private pasture, nor do I pay the land taxes, or pay for the fencing. If there is a fire there, or an accident,the land owner is liable for costs, not the renter!

Horse, your “sweetheart of a deal” doesn’t even scratch the surface! Are you upset with the grazing lease situation or the acreage payment that was paid on it?

Get out there and purchase some lease! Check with the real estates. It comes up for sale in Northern Alberta, all the time! Mine might be coming up, sometimes, it hardly seems worth the hassle!

[Horse]

Cowman I still have the poop on Public lands on file but I tryed to find it on gov web site but they seem to have hid it pretty good . But this is what I have A lease at 650$ rent nets $75000 in resourse rev another $30000 nets $400,000 not to bad.there are 5700 lease holders in prov app 1/2 get anual resourse rev in excess of the fees and taxes paid you may be able to geta cpy of Tom Thurbers report on Agricultral Dispositions Statutes Amendment Act BILL 31 released in nov 1999 or the ACC An Economic Analysis of the costs and returns Associated with the Use of Crown Grazing Dispositions in Alta 1976 to 1996 they charged me $20 for the report but it was money well spent If I had an address I could mail the gov documents that seem hard to get at source.

[cowman]

So how do you see this solution being resolved Horse? And please don't just say "kick them off those leases" because these people do have money invested with the probable expectation that they would get some exploration money.
The courts have ruled that a grazing lease is real property and any expropriation must reflect the true value of said lease. I think you would agree it is not fair to change the rules in the middle of the game?

[Horse]

I would say charge a fee comprable to private leases. In the agreement it says the minister has the right to cancel at any time.Any money in the lease should be in fencing only the other improvements are already paid by the crown mostly in the form of free rent until you are paid back for any expenduters. And in some cases even the fences are paid by crown. Just to show how stupid these leases are did you know a holder can even sell sand and gravel but if you want to cut a tree you need permission from crown. If the leases were put up for bid at the renewal times they would soon reflect true value. If people paid too much tough I have over paid for things and the govmt didnt come running to pay me off. All I am asking is fair treatment I dont see how giveing 6000 lease holders a sweetheart deal is helping the industry or those that have to sell in the same market. As for buying a lease why would I buy something that is not legaly for sale they are assignable and of course if I gust hapened to give someone a feww thousand so they would assign to me it is not technicaley ilegal.

[cowman]

Well I do believe leases have been declared "real property" by the courts? I believe that is why Ralph Klein had to back down?
I'm not real up on it as I never had any desire to own a lease but I have done work on oil leases within grazing leases. And quite frankly I don't see any millionaires...just regular old cowmen trying to make a living! Now these leases are sort of swampy and lots of trees but they can really grow grass in the open spots!
I guess it doesn't much matter anymore because I doubt the system in place will change. Klein pretty well got whipped in the last fiasco and I doubt we'll ever see a politician touch this one again?