A small number of ranchers are getting a financial break on their grazing operations at taxpayer expense, and a battle over the subsidy's continuation is shaping up in Congress.

The Bureau of Land Management and the U.S. Forest Service manage livestock grazing on 307 million acres of land in 16 western states. They make recommendations for grazing fees, based on estimates of how much an animal eats.

But while other federal agencies charge $4.50 to $16 per animal per month, BLM and the Forest Service collect only $1.35. Revenue from the fees pays for only about 35 percent of the program's cost, and the difference is made up by the taxpayers. The subsidy has totaled more than $200 million in the last five years, according to the National Wildlife Federation.

One thing that bothers critics of the cut-rate grazing fees is that many permit holders -- who include oil companies and land speculators as well as ranchers -- sublet grazing rights at higher prices.

The current fee formula was set up under the Public Rangelands Improvement Act of 1978. When the law expired in 1985, President Reagan extended the formula with a $1.35 minimum.

BLM spokesman Joe Zilincar said that without the minimum, grazing fees -- based on a complicated formula -- would have dropped below $1. Both agencies pointed out that the low fees keep many ranchers in business. In most cases, they said, subleases include buildings and other private property -- not just the grazing permits.

"I understand all the arguments, but it's a political issue and it always has been," Robert Williamson, Forest Service range management director, told our reporter Tanya Isch.

Reps. Mike Synar (D-Okla.) and George Darden (D-Ga.) have introduced legislation to raise the fees, while Rep. Ron Marlenee (R-Mont.) has countered with a bill to keep the formula intact.

A Marlenee aide said critics often don't consider that permit holders must make improvements, such as digging wells and maintaining fences. A fee hike would lead some to drop their leases, he said.

Critics point out that only 2 percent of all U.S. livestock producers use public grazing lands, and only 7 percent in the 16 western states. Synar wrote last year in a committee report, "If Congress decided to subsidize all American {livestock} producers to the same extent, the subsidy would cost more than $2 billion annually."

Besides questioning why a favored few ranchers should be getting subsidies, Synar and other opponents have never been convinced that BLM Director Robert F. Burford should be involved in grazing-fee policy, even indirectly. In 1981, when he was appointed, Burford owned land that had grazing permits attached. He sold the property to his sons before assuming his official duties.

Before he was confirmed, Burford promised to recuse himself from "any decisions which directly affect Bureau of Land Management grazing permits which I now own." Gabe Paone, deputy ethics officer at the Interior Department, of which BLM is a part, said: "I guess every reasonable person would have to say yes, there's an appearance of conflict of interest. But it's the significance that is important, and we don't think it's significant."