In this paper the author analyses agricultural land use changes in the urban shadow of the Sydney metropolitan region and clarifies their sustainability on a micro-scale using the example of Castlereagh area, Penrith City. Castlereagh area is situated around the western suburbs of Sydney city centre, and is characterised by competition between agricultural and urban land use. In this area, rural and agricultural land use has generally developed since the colonial period. Although definite changes from agricultural to urban land use are not apparent with the advancement of urbanization, some kinds of agricultural use have changed to others in terms of function and quality since the 1990s. This sustainability of agricultural land use changes based on land, climate, and historical conditions as a suitable region for agriculture, and accessibility to the urban market for agricultural products, and land use policy of city planning and land use zoning.In Castlereagh area dairy farming and sheep grazing have traditionally developed with advantageous land and climate conditions for grass production. In particular, suburban dairy farming was important for town milk production. Although there were a few trends of conversion from dairy farming to sheep grazing, because of a decreasing agricultural labour force, the framework of traditional pastoral farming still remained until the 1980s. Since the 1990s most aspects of pastoral farming have changed into horse raising, horticulture, and hobby farming with the enlargement of urban land use for residential and factory sites. Such farming has been most apparent among all kinds of land use in the 1990s.Under an environment of urban shadow, both horse raising and horticulture have developed due to their suitability for expanding urban land use and farmland subdivisions. Agricultural land use changes are supported by economic factors such as capital intensity and high profitability. On the other hand, hobby farming is less intensive and rather unprofitable, and is developed for the mental satisfaction of aged and the urban residents, rather than the advancement of urbanisation and land subdivision. Therefore, agricultural land use changes into hobby farming are supported by non-economic factors such as productive aging and mental satisfaction. On the whole, a series of agricultural land use changes are identified for their sustainability, and are supported by economic and non-economic factors. In particular, hobby farming plays an important role in holding back urban sprawl and maintaining agricultural land use.

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