Congress by the end of the year must set new fees for the western ranchers who graze cattle and sheep on federal lands. This might normally be a parochial issue of little interest this far east. But this year it has come to have broader implications. Grazing fees are much lower on federal than on private land. Environmental groups contend that the federal fee structure, which the ranchers want to preserve, is a subsidy that has led to overgrazing, the crowding-out of other uses and serious damage to the rangelands. The fee issue has taken Congress quickly back to the general question of how to manage the public domain.

The numbers give a sense of the politics. There are relatively few producers involved -- about 31,000, who include only about 2 percent of the nation's cattle producers. But within their states, these producers are formidable. There are 307 million acres of public rangelands in the 16 states most affected, and a third of the cattle raised in the West graze on public lands at least part of the year. In important states the usage is heavier. In Idaho, whose Sen. James McClure is chairman of the controlling Energy and Natural Resources Committee, producers feed 88 percent of their cattle at least part-time on public land. In Wyoming, whence Sen. Malcolm Wallop is chairman of Energy and Natural Resources' public lands subcommittee, the figure is 64 percent. In Arizona (Rep. Morris Udall, chairman of the House Interior Committee), it is 63 percent.

At the heart of the fee debate is an engaging acronym, the AUM, or animal unit month. The federal fee per AUM is derived from a formula based on livestock prices and cost of production, rather than comparable fees for the use of private land. The federal rate is around $1.35 per AUM; private rates are four to five times that. The stockmen say that is all the federal land is worth, that the rangeland is mostly residual federal land that no one ever wanted, and that it is not their fault if it is bare: it was poor to begin with. The environmentalists, sharply disputing this, say that overgrazing has stripped the cover off the land, led to the silting-up of streams, produced desertification and squeezed out wildlife.

The salient members of Congress -- Messrs. Wallop, McClure and Udall and House public lands subcommittee Chairman John Seiberling -- have decided that neither side has the votes in the dispute -- that the stockmen could beat a fee increase but the environmentalists could beat a straight extension of current law. They are seeking a compromise in which fees would stay the same but other concessions would be made. The Interior Department could be instructed to use more of the proceeds (now about $37 million a year) for rangeland reclamation; it could be ordered to draw up balanced land-use plans for the open lands it controls.

But a 1976 law already requires such plans; Interior has largely ignored it. Even the Office of Management and Budget has called for increased grazing fees, part of its effort to step up user fees generally; the House budget conferees, in a shot at the Senate conferees from the West, also proposed an increase. The urge to compromise is understandable. But in a tight budget year it is wrong to make this kind of concession to this kind of interest group. We say bring up a bill to raise the fees, and let the members vote. Truth-in-legislation, you could call it.