The subject is 'OVERGRAZING by cattle'.

Claire is correct. A longer explanation is that “overgrazing” is a gerund (noun form of a verb) and is a singular subject, so “overgrazing ... which removes....”

Simply put: English has some nouns that don’t have a plural form. There is really no grammatical explanation for it. Some plurals don’t have the S because of the words history or other factors. You just have to memorize ex: Moose—-> moose Mouse—> mice Fish—> fish

The statement as written is a little clumsy in my opinion. It would be clearer to say “... overgrazing by cattle removes the vegetation and leads to a loss of soil.” I wouldn’t say that it’s ambiguous though because ‘cattle remove the vegetation’ would suggest some kind of deliberate effort on the part of the cattle. So from context we would know that it is not the cattle doing the removing. You could have a clause which refers to ‘cattle’ and in that case the verb should be conjugated in the third person plural “... overgrazing by cattle, who thrive on the the native grasses, leads to a loss of soil.”