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Sheep rearing is the main productive activity in Patagonian rangelands, where guanacos are the only native ungulate. Ranchers perceive a decrease in range carrying capacity as guanaco numbers increase, therefore guanaco conservation within private lands becomes a considerable challenge. This issue is particularly evident in the World Natural Heritage Península Valdés (PV), where there is a need to harmonize livestock production and biodiversity conservation. While sheep rearing prevails as the primary land use in the area, some ecotourism initiatives have been implemented to complement livestock production. In order to study how land use affected guanaco distribution, we characterized PV's ranches in terms of land subdivision, primary productivity, stocking-rate and management type, and assess how these variables affected guanaco encounter rates. Smaller ranches were composed of smaller paddocks (mean size 4.8 km2), which showed higher values of the remote-sensing derived Enhance Vegetation Index (EVI) (mean 0.14) and held higher sheep densities (mean 108.0 sheep/km2), while larger management units (mean size 23.8 km2), showed lower EVI values (mean 0.12) and lower stocking-rates (mean 36.7 sheep/km2). This pattern suggests that primary productivity has been a decisive factor to determine the minimal paddock size set by ranchers in PV, apparently precluding excessive land-subdivision in less productive areas. Guanaco encounter rate, expressed as number of guanacos per travelled kilometre, was inversely related to EVI and stocking-rate. However, land subdivision was the better predictor of guanaco encounter-rate within only sheep ranches, finding more guanacos per kilometre as paddock size increased. In contrast, in ranches where ecotourism was implemented as a complementary activity, guanaco encounter-rates were greater, regardless of paddock size. Our results suggest that the implementation of an additional activity by which landowners derive benefits from wildlife has prompted a beneficial outcome for guanacos, presumably through a decrease in harassment intensity. Finally, we propose possible mechanisms by which land subdivision may affect guanaco distribution and potential alternatives for the inclusion of wildlife conservation in a context of extensive livestock production. [ABSTRACT FROM AUTHOR]