This Article on ‘Agricultural Property Rights in Australia (the State of New South Wales)‘ is written by Subham Banerjee. A 3rd year student from Kingston Law College, and an intern at Legal Upanishad.
Agricultural Businesses operate on over 51% of the land area during 2019-2020. As of 30th July 2019, there were 394 million hectares of land was used for agricultural practices with an increase of 6%., But there is no single specific section of legislation addressing agricultural property rights in Australia. There is only one way of accusation and disposal of agricultural land same as buying and selling of commercial land and houses. These common laws leave the farmers uncertain because they are not real of their land, Government remains the ultimate owner of the land.
Problems faced by Agricultural Property Rights in Australia (New South Wales):
These common laws which recognize the process of selling and buying of agricultural land same as selling and buying of commercial lands lead to the Government being the ultimate owner of those agricultural lands, Irrespective they hold Freehold, Leasehold, or a License. The Farmer is never the real legal owner of that agricultural land. The lack of legal access can cause further problems and it is not abnormal to detect the fact that farming lands are physically landlocked once such access can be removed because of the absence of legal access to the farmers. Even the fact that agriculture brings about 20% of export value every year to the World Export Value. The actual area of the property should be made clear and a proper legal framework should help the People of New South Wales as this helps during sales and purchase of the land.
Ownership of agricultural land
A family-run rural enterprise’s real estate is frequently owned in the farmers’ or graziers’ personal names, or in a private ‘proprietary limited company or a private discretionary trust. To determine the optimal property ownership structure for the company venture, get appropriate tax and accounting guidance. The farmer or grazier will next typically establish an operating organization (again, a private proprietary limited company or a private discretionary trust) to carry on the agribusiness from the real estate. A property entity and an operating entity are created as a result of this construction. Separating the two entities is for tax, accounting, and risk reduction purposes. The usage of the land, as well as the sharing of risk, obligations, and profits, will normally be agreed upon by these companies. In these structures, succession planning is also a deciding element.
Freehold land ownership of farming or agribusiness land is common and well recognized. For houses and commercial buildings, it’s the same as owning freehold land. The distinction is the zoning laws that apply to that particular piece of property. Zoning regulations, whether state or territory-based or local council-based, establish the parcel’s permissible land use and whether approvals are required to change or amend that use or carry out development compatible with the approved use.
Leasehold landownership for farming or agribusiness purposes is very common and well known. The sorts of leases, on the other hand, are numerous and varied. In some states, for example, there are:
Perpetual leases: These are leases that are issued in perpetuity for an annual rent with the option to convert to freehold at a later date.
Pastoral leases are a type of leasehold tenure that allows Crown land to be used.
Matters to consider regarding agricultural property transactions include:
- due diligence and disclosure obligations;
- land tenure, access, and easements;
- dividing fences;
- water rights, including water access licenses, dam licenses, and bore licenses;
- stock and crops;
- plant and machinery including depreciation;
- third-party rights, including agistment agreements and share-farming;
- forward supply contracts;
- management obligations during the transaction term;
- warranties regarding environmental issues, including disclosure of conservation agreements or notices regarding acid soils and contamination risks;
- work health and safety issues and employment law; and
- the certainty of commercial terms regarding the consideration to be paid by the purchaser to the vendor.
Rules relating to the public control of Agricultural Property:
The Environment Protection and Biodiversity Conservation Act of 1999 is the primary legislation behind matters of Agricultural Property Rights is currently working on the land ownership and protection of property rights of farmers. Further rezoning of agricultural land is taken up by the government for a change of permissible use of agricultural land. The government is also working to provide a legal framework for the sale and purchase of the land also provide freehold or licensing to identify the real owner of the land-primarily the farmers.
They have also set up ground rules for the management of Agricultural Property:
- improve the quality and function of natural vegetation;
- maximize the advantages of ecosystem service markets
- native vegetation should be valued and managed;
- promote indigenous peoples’ participation in native vegetation management
Conclusion and Suggestion:
With so much exponential growth in the agriculture sector of 9% every year and a sector with so much potential obviously providing jobs and increasing the GDP of Australia, Current laws don’t support Agriculture so much. Current Australian Laws regarding agriculture make the government the ultimate owner of the land which is owned by farmers and exploiting their basic fundamental rights of owning property.
Australian Government should come up with a legal framework to ensure the property rights of farmers. Further, the Australian Government needs to come up with a legal framework to ease the sale and purchase of agricultural land because under current laws agricultural land is treated the same as any commercial property such as houses. Re-zoning of agricultural land from commercial land to further this is a value-add opportunity for the farmer because land classified for rural uses is typically deemed to be less valuable than land allocated for light industrial or residential uses. The appropriate state and territorial planning laws regulate rezoning.
Hamblin, A. (2009, October). Retrieved from Science Direct: https://www.sciencedirect.com/science/article/abs/pii/S0264837709000064
Lambert, S. (n.d.). Identify and summarise the enacted legislation addressing agricultural property transactions in your jurisdiction. Retrieved from https://www.lexology.com/library/detail.aspx?g=f75cedd3-2b2a-4fad-b72b-15452c2c4f2a
Land Management and Farming in Australia. (2016, March). Retrieved from Australian Bereau of Statistics : https://www.abs.gov.au/statistics/industry/agriculture/land-management-and-farming-australia/latest-release
(2016). Stephanie Lambert. New South Wales: Department of Primary Idustires.