TheImprovement ofTropical and Subtropical Rangelands

60 IMPROVEMENT OF TROPICAL AND SUBTROPIOAL RANGELANDS
• lAnd. In the broadest BeDH, land includes all natural resources
such as air, minerals, lOils, 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 ueed 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 adminiatrative 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, ia 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.
PROJECT ANALYSIS
Agricultural or natural resource developments might best be defined,
explained, analyzed, and understood as ·projects." Projected
cash flows over a period of time are required for comparisons among
alternative development projects or other investment decisions.
In defining a project, Gittinger (1982) said:
We generally think of an agricultural project .. an investment