Thanks you make my point. God forbid that the Feds should lease the land which it owns to the highest bidder. That whould be so "unfair" and a "breach of trust."
No, I don't think so. From the 1870s to the 1930s the grazing rights were a deeded property right, a parallel to mineral rights. They were bought, sold, used as collateral and inherited. During the depression the government "reclaimed" the rights. They started charging a fee for the first time, effectively turning ownership into a leasehold.. This was akin to "reclaiming" homesteaded property and saying "Sorry, we really didn't mean it. We are going to start charging youi rent".
It was pure confiscation but the ranchers had no money to fight for rights which, at the time, had little value. It was cheaper to pay the lease. To pacify the ranchers the government agreed that the fees would be "maintenance only". They would cover just the costs of overseeing and managing the grazing rights..
Are the leases undervalued? Yes. That was the cost of converting a fee simple property right into a leasehold. It is not a "subsidy", it is payment for confiscation.