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close this bookThe Improvement of Tropical and Subtropical Rangelands (BOSTID)
close this folderPart I
close this folderThe economic context
View the document(introduction...)
View the documentRange systems
View the documentThe basis of range economics
View the documentProject analysis
View the documentDetermining costs and benefits
View the documentResource evaluation
View the documentMarket price determination
View the documentReferences

The basis of range economics

Economics may be defined as the science dealing with the allocation of scarce resources among various competing uses, with the objective of maximizing utility or maximizing satisfaction of human wants. For range projects, scarce resources include:

· Land. In the broadest sense, land includes all natural resources such as air, minerals, soils, natural vegetation, and water.
· Labor and management. These are the resources furnished directly by humans.
· Capital. This refers to the intermediate products (inputs) created from land, labor, and funds used in further production. Capital is both the money used to pay for inputs, and the buildings, machinery, livestock, and purchased inputs that can be valued in dollars or local currency.

Organizations must conscientiously attempt to guide the allocation of their physical, financial, and administrative resources among sectors and competing programs to further national objectives (figure 3-1). This is true whether the resources committed are being invested by the government directly or by individuals within the economy.

The concept of economic rationality is a central consideration of economic theory and the definition given above. A rational economic person, or consumer, is one who seeks to maximize utility or satisfaction. There is often a close identification between farmers' or pastoralists' consumption and their production decisions.

Personal preferences also affect decisions within the agricultural or natural resource development sphere. Some decisions may be made to enhance prestige or status with a peer group. Some may reflect consumption rather than production expenditures.

As mentioned previously, however, nonrational behavior may be difficult to judge, in particular by those outside the culture. What seems nonrational to an urban dweller from the industrilized world may be quite rational when examined in the correct cultural context. Therefore, in determining proper economic behavior, what outsiders consider maximum utility may not be in the best long-term interest of pastoralists. Clearly, before a rational economic strategy can be formulated, the culture and traditional economic behavior must be understood.