Oglala Sioux must find nearly $4m to prevent massacre site being sold off, the latest in a series of issues that has the South Dakota tribe's modernisers and traditionalists at loggerheads

Horses are sacred to Native Americans. For Kevin Yellow Bird Steele, one of the tribal leaders of the Oglala Sioux, there are few places in America as inappropriate as the Pine Ridge reservation for a horse slaughterhouse.

"Horses are our friends," said Steele, who has been on the tribal council for 20 years. "A lot of people here think killing horses is wrong." He said his view was widely shared on the South Dakota reservation, one of the biggest in America.

A proposal to built a horse slaughterhouse at Pine Ridge is one of many contentious issues that have emerged at the reservation over the last few months, a reservation that has received the closest media attention since 1973, when a confrontation between Native Americans and the FBI left three dead.

The most emotive of all the present issues is the proposed sale of land adjacent to the infamous site of 1890 Wounded Knee massacre, the last clash of the Indian wars in which the Seventh Cavalry slaughtered at least 150 men, women and children. Some estimates put the death toll at more than double that.

The seller of the 40 acres, James Czywczynski, gave the Native Americans an ultimatum: come up with $3.9m, or I'll seek buyers elsewhere. The deadline is Wednesday.

The sale was on the agenda of the tribal council on Tuesday night, along with the proposed slaughterhouse and other matters. The council concluded that it was not prepared to pay more than the going rate, which it believes is between $10,00 and $12,000. "We are in a standoff. The tribe does not have the price he wants," said Craig Dillon, a member of the tribal council. Even if it did, it would not pay what it regards as an exorbitant price.

With the deadline passed, the land looks set to be offered for sale elsewhere in the US and internationally, and eventually put up for public auction, according to the owner.

But there are other areas of tension, too. There have been protests, including a blockade, over the proposed Keystone pipeline amid fears that it might cross the reservation. Separately, a delegation went to Washington last week to lobby members of Congress over sequester budget cuts, which impose cuts to education, health and welfare in an already impoverished area.

All these issues – the proposed sale, the slaughterhouse, the budget cuts and the pipeline – are interrelated, reflecting divisions between the Sioux and the outside world but also within the tribe, between those who see development as desperately needed and those who are opposed.

Two of the other big reservations in America, the Cherokee on the east coast and the Navajo in the south-west, have both embraced developments including tourism, with 45,000 and 600,000 visitors a year respectively. But the residents of Pine Ridge have so far resisted, leaving it one of the poorest areas of America. Unemployment is above 80%, infant mortality is three times the US average, and rates of suicide and alcoholism are high.

"We need economic development to put people in work," said Dillon, one of the leading advocates of development. "We can't say no to everything." The slaughterhouse, which would cost an estimated $25m, would bring in an about 100 to 125 jobs, he said.

Horse slaughter was effectively been banned in the US in 2006 after pressure from the animal rights lobby. The ban was lifted in 2011, but no new plants have been authorised, and a bill to reinstate the ban is pending. But the reservation is free from most federal laws.

The plan, which was first proposed by a member of the tribe, was reported last month in the local Bennett County Booster. Talks have taken place between the tribe and the South Dakota agriculture department, the veterinary department and the South Dakota secretary of tribal relations.

The plan passed through the council earlier this year with only two objections. But once word got out, opposition began to grow among tribal council members like Steele. "The plan is on shaky ground just now," Dillon admitted, acknowledging that it was a sensitive issue for the Oglala Sioux for cultural and historical reasons, due to the role played by horses in the dominance of the Sioux of the Great Plains and in their battles with the cavalry.

But the tribal council is united in opposition to Czywcynski's price. Steele, who represents Wounded Knee on the council, described it as ridiculous, and an attempt  to cash in on the site's historical value. "It is our history, not his," Steele said.

Steele warned outsider buyers that purchase alone would not be the end of the matter. There would be issues of access: the 40 acres is landlocked. Permission would be needed for any development. He added ominously that there were only 30 police covering the reservation's 2.2 million acres, hinting that developers would be vulnerable to acts of civil disobedience.

Steele opposes the development of the area round the site for tourism. "It is inappropriate to build there. It would be the descendants that would stop it … the descendants see it as a crime scene," Steele said.

Dillon thinks differently. "If I had my way, I would have a museum there and provide an area for people to sell their goods – and for the descendents of those massacred to tell their stories," he said.

Czywczynski does not recognise his portrayal by the Oglala Sioux as the villain of the piece, a white man selling off land that has a special resonance for the native people. "We have had lots of comments but no Indian offers," he said, adding his family had owned the land since 1968. He said interest in the land has been expressed by a management group on the west coast and another from Ohio. "We will look at different offers and probably put it up for international advertising and a final result would be a public auction," he said.

He stressed that, contrary to the view offered by the Sioux,  it is not unusual for an outsider like him to own land. He estimated that about half the reservation is not owned by the tribe.

Czywczynski ran a trading post and museum at Wounded Knee but they were burned down in the 1973 confrontation.

Czywczynski is dismissive of the Pine Ridge protests over the sale. "The Indians say a lot of things. All of it bogus. They want me to give them the land," he said. "They live in a dream world."

© 2013 Guardian News and Media

[Women of Pine Ridge reservation via Flickr user Hamner_Fotos]