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The distribution and quality of soil and land resources in heterogeneous grazing lands of central Australia were changed by grazing. Sites located at increasing distances from livestock watering points showed greater degrees of landscape organization and soil productive potential. The depositional strata, where resources tended to accumulate, occupied a larger proportion of the landscape as distance increased. Physical and nutrient cycling soil properties improved. All soil chemistry variables except pH and electrical conductivity increased and the trend was most apparent in the top 1 cm of the soil. Increasing erosion closer to water was a key degrading process. We showed degradation to be a systematic decline in regulation of scarce resources, which had implications for potential productivity.