RIO GRANDE CITY, Texas (Reuters) - Mauro Morales has chickens in his yard, deer antlers hanging from the fence and a shed full of peyote behind his house.

Peyote buttons are shown in the yard of Mauro Morales on October 12, 2007 in Rio Grande, Texas. Morales is one of three people licensed to sell the hallucinogenic cactus peyote in the United States, and advertises his business on a sign posted outside his home in the U.S.-Mexico border town. REUTERS/Jeff Franks

A slight, balding man in his 60s, Morales is one of just three “peyoteros” in the country licensed by the government to sell the small green cactus that contains the hallucinogen mescaline.

His profession is an old one that used to be more common along the Rio Grande, the only place where peyote grows in the United States. Now it is threatened by the forces of modernity.

His customers are the 250,000 to 400,000 members of the Native American Church, the only people in the United States for whom peyote is legal.

The government warily allows them to buy it because it has been part of indigenous religious ceremonies for centuries.

The church members think the visions that peyote produces provide enlightenment and that the cactus has curative powers. They reverently call it “the medicine.”

Morales has never tried peyote because it would be illegal for him to do so. He does not want to risk losing his peyote license, for which the main requirement is that he be law-abiding.

“You have to make sure you don’t have a problem with the law, you know?” he said in a recent interview.

In the 1970s, Texas licensed as many as 27 peyote dealers. There were supposedly many more before peyote was outlawed in 1967. One of Morales’ fellow peyoteros also lives in Rio Grande City, the other 70 miles north in Mirando City.

The profession seems barely legal in a nation perennially at war with drugs, but in the peyote region there is nothing clandestine about it.

Morales has a big sign out in front of his modest home that proclaims “Mauro Morales -- Peyote Dealer, Buy or Sell Peyote.”

It includes his phone number should any prospective customers pass by.

“It’s a business,” he said with a shrug of the shoulders in a recent interview. “It’s the only income I got.”

It is not a bad business, either. State figures for 2006 show the peyoteros sold a combined 1.6 million peyote “buttons” -- the term for the harvested cactus -- for a total of

$463,000.

But records also show volume has declined steadily from mid-1990s peaks of around 2.3 million buttons.

“NOT LIKE IT USED TO BE”

Several factors have contributed to the peyoteros’ dwindling number, but the main one is the growing scarcity of peyote.

“There’s still some peyote out there, but not like there used to be. It’s getting kind of scary now,” said Morales above the crowing of a rooster from the roof of his shed.

He has had his peyotero license for 16 years, and before that worked as a picker, walking the arid brush country of southern Texas with a machete in hand and lopping off the top of the cactus when he found it.

It used to be easy -- peyote was plentiful and landowners were happy to let peyoteros harvest the cactus for a small fee.

But urban development and widespread “root plowing,” which scrapes natural vegetation off the land to replace it with grass for cattle grazing, destroyed many of the peyote fields that once sprawled along the U.S.-Mexico border.

And more and more peyote land is off-limits because it is being bought by rich Texans who turn it into hunting preserves, said Martin Terry, a biology professor at Sul Ross State University in Alpine, Texas.

They have no need for the few hundred dollars the peyoteros offer to pick over their land and often view them suspiciously, said Terry, who has helped start the Cactus Conservation Institute to protect peyote.

He estimates that peyote’s natural range in Texas covers about 800 square miles, but much less is open to the peyoteros.

The result, said Terry, is that the slow-growing cactus is overharvested and the quality and quantity of peyote available for sale is declining.

“We’ve got a serious case of overgrazing by human herbivores, to put it in biological terms,” he said.

Peyote also grows across northern Mexico, which has prompted suggestions that native Americans be allowed to get it there as Texas peyote becomes scarcer.

But Terry believes the wisest thing would be for the U.S. Drug Enforcement Administration to allow what it currently does not: greenhouse cultivation of peyote.

That would save the cactus, but likely make the peyoteros extinct.

Morales said his pickers cut the peyote in a way that allows the plant to grow back. He grabs a machete and slides the blade horizontally along the ground to show the technique.

“It comes back, but it grows slow,” he said. “It’s hard to get enough medicine.”