Lender Supporting Ranchers
Against Anti-Grazing Radicals

ALBUQUERQUE —(AP)— A New Mexico bank has filed court papers siding with ranchers in a legal attack on an important financial underpinning of ranching.

Forest Guardians, a Santa Fe-based environmental activist group, filed a lawsuit this summer in an effort to end the practice of ranchers using public land grazing permits as collateral for bank loans.

Production Credit Association of New Mexico, a cooperatively owned lending bank, filed court papers late last week to intervene in the lawsuit.

``All we're trying to do is protect the financial confidentiality,'' said Jimmie Hall, the bank's president.

Ranchers and bankers claim that ending the practice of using grazing permits as collateral would ruin some ranchers and damage banks.

``If they take away our ability to borrow money, they're in essence taking away our livelihood,'' said Caren Cowan, executive secretary of the New Mexico Cattle Growers Association.

At issue are longstanding policies in which federal land management agencies agree to turn grazing permits over to banks when loans go bad. That allows ranchers to pledge their permits as loan collateral.

To some anti-grazing activists, that practice is akin to allowing businesses to pledge national icons like the Washington Monument as collateral.

Ranchers and bankers disagree. They contend that the use of grazing permits in ranch financing is justified because ranchers pay for the permits in two ways. Grazing permits that are inherited as part of a ranch are taxed, and ranchers have to pay for the value of the permit when they buy a ranch.

There are 173 such loan arrangements on ranches that use national forests in New Mexico. That is about one in three ranches on national forest land in the state.

In June, Forest Guardians filed the lawsuit to pry information about such loans from the U.S. Forest Service.

Included in the information sought by the group were the names of banks that have accepted ``escrow waivers,'' or guarantees from the Forest Service that the bank would get the grazing permit if a loan goes bad.

Production Credit Association of New Mexico said divulging the information could lead some banks to stop accepting permits as collateral, which could reduce the amount of money ranchers could borrow and the amount of business banks do.

The bank's court papers claim that if successful, Forest Guardians' challenge ``would cause great harm to the economy of New Mexico, as well as other states in the Western States, and other parts of the United States.''

New Mexico has about 7000 ranchers. Of those, about half graze on land overseen by the Forest Service or U.S. Bureau of Land Management.