What is grass banking?

Like Tom and Jerry, ranchers and conservationists normally don't get along. Ranchers are stereotyped as land-hungry graziers whose profession tears up the countryside, and conservationists as snooty ecomaniacs who care more about wildflowers than their fellow man. Neither characterization is entirely true, of course, and with grass banking, growing contingencies from both parties are starting to see that they can actually work together to accomplish their goals.

Grass banking is a relatively new practice where property owners lease land to ranchers at a discount in exchange for ranchers to carry out conservation-related projects on their pastures. The agreement enables ranchers to stay in business by providing their cattle with fresh sources of grass and their heavily grazed land with a much needed rest. At the same time, it gives the landowners -- usually groups with an interest in conservation -- an opportunity to preserve more land than they'd normally be able to.

At present, many of these so-called grass banks are found in the western United States -- cattle country. The first one sprouted up in 1994 when Drummond Hadley of the Animas Foundation partnered with the Malpai Borderlands Group to entice local ranchers to participate in conservation easements in return for cheap grazing privileges on the group's 502-square-mile (1,300-square-kilometer) ranch in New Mexico [source: Herring]. The easements, which are roughly equal in value to the forage that cattle consume, are voluntary legal agreements landowners sign in order to limit development on their property now and in the future. These easements require the ranchers to protect their land and keep it healthy with restoration projects.

Since that first grass bank was started more than a decade ago, dozens of others have popped up, effectively saving both the ranchers and the prairies from extinction. On the one hand are the ranchers, whose way of life is slowly disappearing -- either giving way to increased cropland for farming or to neighborhood developments. Many of them struggle just to stay afloat, especially during times of drought, which affects the land that their herds depend on.

To these ranchers, grass banks are a way to stay in business. By providing inexpensive supplemental pastures during downtime, the leased land enables them to continue their way of life. And the grass on their own pastures comes back even greener when they return.

To the landowners, the deal is just as sweet. Rather than protecting just their own land, they're able to protect other land as well via the conservation agreements -- not to mention the added benefit that limited grazing can bring to the leased land. By many accounts, it's fair to say that those involved find grass banking to be a wise investment. Find out what's involved with grass banking on the next page and what some of the detractors are saying.

Grass Bank Investments Paid Out in Green

One visible proponent of grass banking is the Nature Conservancy. The environmental group has entered into several successful grass banking agreements throughout the western United States, finding it a valuable tool in its mission to preserve wildlife by conserving the land. One such grass bank in Montana at the Matador Ranch is helping to protect vital habitat for dozens of species of native animals.

Started in 2000, this particular grass bank agreement allows ranchers to graze their herds on the 60,000-acre (24,281-hectare) ranch at a reduced price in exchange for agreeing to conservation practices like weed prevention, a ban on plowing and habitat protection. In just one year, the grass bank protected 24,500 acres (9,915 hectares) of sage grouse habitat, prevented 70,000 acres (28,328 hectares) of native range from being plowed under and replanted 50 acres (20 hectares) of cropland back to native grasses [source: The Nature Conservancy].

Successful grass banks don't require a big name like the Nature Conservancy. Another project in Montana, the Rocky Mountain Front Grass Bank, consists of 360 acres (146 hectares) rented out by private landowners. Ranchers agree to perform a combination of fence repair, weed control and monitoring on the leased property in exchange for temporary grazing rights, while their fields get a chance to rest and undergo similar restoration efforts. Similar grass banks exist everywhere from California and Oregon to New Mexico and Iowa.

Despite such successes, the concept has its detractors. Like financial institutions Lehman Brothers and AIG, grass banks, too, can fail. One of the primary complaints is cost. Operation expenses, such as irrigation, range from $5,000 to $260,000 a year and are usually split among the grass bank partners [source: Reese]. Unless they receive grants or government funding, many participants find such a price prohibitive.

Purchasing or leasing the land in the first place can be just as problematic. The Bureau of Land Management and other federal land managers think the idea has promise and sometimes participate as partners, but have yet to set up any grass banks of their own due to a lack of vacant land [source: Reese].

Besides the cost, some detractors also cite the fact that grass banks are merely a temporary solution to a long-term problem. Unless the ranchers sign permanent easements protecting their land, the conservation is good only for as long as they participate. What's to say they won't cash in all their chips one day, sending all the acquired capital down the drain?

A final complaint stems from the ranchers-versus-environmentalists conundrum. Some people believe ranching is impossible to sustain under any circumstance and that providing more land to ranchers -- called "welfare ranching" -- simply encourages poor grazing practices and is a waste of money [source: Batdorff]. Alternatively, some ranchers are hesitant to enter into an agreement with conservation groups.

For those who've shed their prejudices, though, the gamble has paid off. Not only are the ranchers and landowners happy, but the cows are happy, too. And full.

What is grass banking?

Grass Bank Investments Paid Out in Green

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