Course ID 46: Economic Analysis of Melbourne's Foodbowl Contribution

This report, based on a Deloitte review, analyzes the economic contribution of Melbourne's Foodbowl, a significant agricultural area. The study examines the impact of urban development on food production, highlighting the value-added contributions of various agricultural sectors like fruits, vegetables, poultry, dairy, and livestock. It assesses the effects of urban sprawl scenarios on agricultural land, production, and consumer preferences. The report details the foodbowl's contribution to the regional economy, employment, and gross regional product, while also considering the option value of farmland and the ancillary benefits related to climate change and natural disasters. Using the DAE-RGEM model, the analysis forecasts the future impacts of production changes and consumer demands on the foodbowl's economic landscape. The report also includes detailed tables and figures to support the analysis.

Running head: BUSINESS STATISTICS
The Economic Contribution of Melbourne’s “Foodbowl”
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The Economic Contribution of Foodbowl of Melbourne
The essay is based on the review report of Deloitte on the topic “The economic
contribution of Melbourne’s foodbowl”. Melbourne is the second largest city of Australia
with its urban fringe, peri-urban area and productive agricultural lands too. However, recently
the population and industrial base is vastly accommodating the reduction of area of land
available for food production (Drew, Kortt & Dollery, 2013).
Figure 1: Population increasing chart of Melbourne
The report discovered that foodbowl of Melbourne has almost 1.7 million hectares of
agricultural land having a combination of varieties of products such as vegetables, poultry,
dairy and livestock manufacture.
Mainly in two ways, the urban development of Melbourne affects the production and
valuation of the foodbowl in farm land. These are- lesser agricultural land that leads to reduce
the supply of foods of people and growth of Melbourne and its population is asking for higher
food demand.
Figure 2: Foodbowl area of Australia

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Approximately 12.8% of the Victoria’s agricultural land (1.7 million hectares) were
used to accounted for foodbowl area of Melbourne.
Figure 3: The agricultural lend of Victoria by region
The agricultural sector directly contributes $956 million annually as the value-added
terms to the regional economy. Foodbowl agriculture produces $742 million annually in
value-added terms as upstream indirect contribution. It also generates $756 million annually
as value-added terms. Among all the food categories, fruits and vegetables are the largest
contributor contributing $413 million value added.
Table 1: Contribution of agriculture and food manufacturing in foodbowl of Melbourne

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Figure 4: Value of Agricultural production in foodbowl area of Melbourne
The constrained urban sprawl scenario is indicating that 0.62% of total land that are
used in production is in foodbowl.
Table 2: Residential growth and agricultural land in 9 growth LGAs

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Here, per annum agricultural product reduces by $32 million. In a moderate urban
sprawl scenario, 1.92% of total land of foods is producing land in the foodbowl. Here,
agricultural production decreases by $111 million with $37 million value added service.
Table 3: Sectorial impacts of “Constrained urban sprawl”
Table 4: Sectorial impacts of “Moderate urban sprawl”
Table 5: Different rates of two types of urban sprawl scenario
As an outcome of declining agricultural result in two scenarios, the effects are flowing
on rest of the economy in foodbowl area. The change in preference of consumers in foodbowl

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area of Melbourne are increasing the demand for locally grown fresh food within the
cultivating region foodbowl. As a result, per annum agricultural production would enhance
by $290 million with $131 million value added. The price of farmgate products of price
acknowledged by agricultural producers of foodbowl in near future would grow up by 5.3%.
The higher values that customers order on locally are reflecting over cultivated foods.
Figure 5: Current food demand and future food demand of Melbourne city
However, the current trend is referring towards the enhancement of preference of
people towards local fresh foods from the foodbowl. The consumers of foodbowl foods have
increased their consumption by a insignificant amount of 10% of the value of per annum
agricultural output that motivated the purchase of growth of foods $290 million higher per
annum.
Figure 6: Gross value of agricultural production in the foodbowl area of Melbourne
Table 6: Sectoral economic contribution in foodbowl region of Melbourne

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The option value is retained at the time when the land is used for farming. The risk to
the productional value of foodbowl is significant while urban development is endangering the
future of seven million people of Melbourne. The existing land of foodbowl is getting
decreased day by day and therefore, the amount of per annum agricultural production is
observed to lie in the range of $32 million to $111 million, with greater prices of fresh foods.
Figure 7: Employment in chosen food processing industries according to the region
The ancillary assistances of Melbourne’s foodbowl involves the insurance value
against natural calamities and climate change. The “green wedge values” related with land
are utilised for cultivating rather than construction in urban areas. The regional input-output
of Global Trade Analysis Project investigates the current consumption of foods of human
beings.
Figure 8: Average daily dietary intake by food category

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In 2011, 12600 people were employed in agricultural industry of foodbowl of
Melbourne including both food and non-food agriculture. Agricultural sector provides for
only a small share (0.2%) of employment in inner areas of Melbourne. The share is bigger in
the interface (2%) and outer foodbowl portions (5%) occupying 2.2% employment of
Victoria only. The segmentation of food categories is demanded as the following chart-
Figure 9: Persons employed in agriculture in the foodbowl for food production only
Previous statistics show that it contributes annually $2.45 billion to the regional
Melbourne economy as gross regional product (GRP) along with 21,001 full-time equivalent
jobs. It represents 0.84% of the full-time regional economy of Melbourne.
All the analyses are executed with the help of DAE-RGEM (Deloitte Access
Economics – Regional Equilibrium Model) that is indicated as-

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Table 7: DAE-RGEM model
It results that for the growth to the contribution of the consumers, production would be
reduced assuming that other costs would remain stable (Economics, 2011).

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References:
Drew, J., Kortt, M. A., & Dollery, B. (2013). A cautionary tale: Council amalgamation in
Tasmania and the Deloitte access economics report. Australian Journal of Public
Administration, 72(1), 55-65.
Economics, D. A. (2011). Dementia across Australia: 2011–2050. Kingston, Australian
Capital Territory: Deloitte Access Economics.