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"Six months of no grazing and a little jump-start on the restoration and it already looks dramatically different than the upstream and downstream," Horning says.

But to date, the Arizona State Land Department is not interested.
"Thus far it's been an unofficial response," Horning says. "They say unless you're engaged in the livestock business, you're not a valid leaseholder of an agricultural lease.

"We're definitely going to court."
Southwestern environmental groups are also trying to pioneer free-market tactics in Arizona's national forests to purchase trees to keep them from being cut. But their dealings with the U.S. Forest Service are as strained as with the Arizona State Land Department.

"We ran into the same thing when we tried to bid on timber sales," says Kieran Suckling of the Southwest Center for Biological Diversity. "The first response was that only timber operators are allowed to bid on timber sales. We said, 'Hey, our money is as green as theirs.' They said, 'No, it's not.'"

The U.S. Forest Service sells trees in several ways. One is in timber sales, in which it marks specific green trees over a large area for cutting and then puts them out to bid to the logging companies. But the agency also issues permits to smaller operators to harvest firewood and Christmas trees and vigas (the beams of New Mexico-style houses).

In 1995, the Southwest Center bought a permit to cut vigas from a salvage sale, that is, in an area that had burned in the Chiricahua Mountains. Then it chose not to cut the trees. But since the group didn't log, the Forest Service issued another permit to someone else who did.

"They cashed our check for $4,000 and then resold [the trees] to other people to log," says Suckling.

Since then, the Southwest Center has joined forces with environmental groups in the Pacific Northwest to petition the U.S. Department of Agriculture, which oversees the Forest Service, to rewrite its rules to allow "unlogging" organizations to buy timber sales. The groups filed their petition in February.

On May 12, Peggy Hennessey, the Portland attorney representing the environmentalists, received a letter from James R. Lyons, the Agriculture Department's Under Secretary for Natural Resources and Environment, flatly stating that the department had no intention of changing the rules to accommodate her clients.

Then, curiously, four days later, signs emerged that there was disagreement on the issue within the Agriculture Department. Lyons issued a press release denying that he had written or even authorized the letter to Hennessey.

"This issue is currently under review by the Forest Service," the official statement read, "and a decision regarding the petition has not yet been rendered. I did not authorize the release of the subject letter, nor was its release cleared by my office."

Meanwhile, back on Arizona's ranches, it remains unclear what Judge Dann's decision and the legislators' refusal to accept the auditor general's report mean for the future of ranching in the state.

Shelly Blackmore and her husband Terry are ranchers from Hillside, and they'd traveled to Phoenix for the hearings on the auditor's report. They're good, decent folks trying to make a living at what they know best.

"Most of the people here are fighting for their livelihoods. If they open grazing leases to public bid, it'll wipe out ranching," Shelley says.

"We can barely survive now," her husband adds.
They don't see themselves as buying grass at discount rates. They see themselves as paying to take care of the land for the state. They're already struggling with market fluctuations, droughts and the high cost of fencing and equipment.

Those are business variables, however, not government expenses.
As Tim Hogan, the attorney who sued the land department over its grazing policies, says, "The rancher doesn't get put out of business so long as he's got an economically viable operation. We're not going to subsidize the operation."

The Legislature may think otherwise. And the environmentalists' promised lawsuit to acquire grazing leases will not likely be quick and easy.

"So often the state lands have hidden behind the excuse that we'd love to manage for recreation and wildlife, but gosh, we've got to maximize the return to the schoolchildren of Arizona," says the Sierra Club's Rob Smith. "Well, here they have a chance, and suddenly it's more complicated when you aren't one of the traditional voices.

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Michael Kiefer