CORRECTED VERSION
OUTER SUBURBAN/INTERFACE SERVICES AND DEVELOPMENT
COMMITTEE
Agribusiness Subcommittee
Inquiry into sustainable development of agribusiness in outer suburban Melbourne
Melbourne — 26 March 2009
Members
Ms C. Hartland
Mr D. Hodgett
Mr D. Nardella
Chair: Mr D. Nardella
Staff
Executive Officer: Mr S. Coley
Research Officer: Mr K. Delaney
Witnesses
Mr Graeme Ford, Executive Manager Policy (affirmed), and
Ms Madeleine Wilson, Policy Adviser, Land Management (affirmed),
Victorian Farmers Federation.
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The CHAIR — I formally welcome everybody to the hearing today. I am the Chair today.
What we will do now is just swear in the two witnesses. The committee has chosen to take sworn
evidence. You can either take the oath or make an affirmation and then give your address.
Mr FORD — 24 Collins Street, Melbourne.
Ms WILSON — 24 Collins Street, Melbourne.
The CHAIR — All evidence taken at this hearing is protected by parliamentary privilege as
provided by the Constitution Act 1975 and further subject to the provisions of the Parliamentary
Committees Act 2003, the Defamation Act 2005 and, where applicable, the provisions of
reciprocal legislation in other Australian states and territories. Any comments you make outside
the hearing may not be afforded such privilege. We are recording the evidence and will provide a
proof version of the Hansard transcript at the earliest opportunity so you can correct it as
appropriate. If you can talk to us for about 10 minutes and then allow about 20-odd minutes for us
to ask questions, that would be terrific.
Mr FORD — We can talk even less than that.
The CHAIR — No, 10 is fine! What I have just said is that if you say anything that is
defamatory within the committee meeting, then you are protected by parliamentary privilege, but
if you repeat that outside, then you are not protected and you could lose your house!
Mr FORD — We are not intending to go anywhere near those statements. We will keep it very
clean and neat!
The CHAIR — Fantastic, Graeme.
Mr FORD — The VFF, of course, has a very strong interest in what is happening around the
outskirts of Melbourne in the agricultural zones. We do have quite a number of members who
operate in those areas in various agricultural enterprises. The predominant enterprise or perhaps
the majority of the income from agriculture in those areas would be from horticulture, viticulture,
strawberries, stone fruits, apples, those types of enterprises. There are also some fairly significant
intensive animal industries through those zones as well, particularly the broiler industry and the
egg industry.
The concerns we have in these areas are generally where agriculture butts up against residences
and rural residential development. There is perhaps in many areas an expectation of agriculture in
an idealised way, where it is perhaps the viewpoint of many people that it is cows grazing on
clover pastures, chewing the cud and it is very quiet and bucolic, whereas the reality of modern
agriculture is not necessarily that way anymore. Agriculture sometimes is a noisy, smelly business
for various parts of the year. Farmers are under intense commercial pressures. Unless they can
operate as efficiently as their counterparts both in other parts of the state and other parts of the
country and in international markets, they are not going to remain viable for long. Our view is that
if they do not remain viable, they will not be able to provide those amenity values that seem to be
the objective of agriculture operating in some of these areas, particularly the green wedge, which
has quite a focus on maintaining that rural landscape. Maintaining landscapes is not a cheap
business; it is expensive. There are pest and weed control activities. We have learnt very recently,
much to our horror, about the fire dangers as well. We need to keep those fire suppression
activities up and fuel loads down. You cannot expect people who are unable to make a living from
their parcel of land to be able to manage the land as people would perhaps expect it to be or to the
best of their ability. It is dealing with those issues that we see as probably the primary problem in
agriculture continuing to operate in a way that the community expects to see it operate in these
interface outer-Melbourne areas. I probably have not got much more to add to that, really. It was
sort of a general statement. We can run through some specifics, but I find it is probably more
productive if we respond to your questions.
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The CHAIR — Madeleine, do you want to say anything?
Ms WILSON — No, I think Graeme covered it all.
The CHAIR — I will start whilst people are thinking. In your submission you talk about the
right to farm. The VFF contends that a farmer’s right to farm is often restricted by complaints
from urban residents, which is what you were saying. Complaints about the use of bird scarers in
the Yarra Valley are a particular problem — David comes from around that region. But then your
submission recommends that the inquiry consider an excision program for egg farms in peri-urban
areas whereby egg farmers would receive a limited number of lot excisions in return for ceasing
production. How do you balance that out? You have rural lot excisions, which brings in the
Toorak weekenders. The farmers always say their land becomes much more productive if they can
excise a block of land so they can give it to their son — it is always the son, it is never the
daughter — but then they sell it off to somebody else. How does that assist with the problems of
the right to farm, smelly farms, cows mooing in the night, trucks and tractors operating, as they
should, in these areas in the early morning or late at night? How does that help?
Mr FORD — We perhaps have not explained it very well then. That statement is around what
was applied in the Mornington Peninsula a few years ago before the introduction of the green
wedges, where the excision was only granted where there was an agreement to shut the farm
down. It was where you had very encroached-upon farms from previous planning decisions, so
there were already those amenity problems with the neighbours, particularly with the broiler
industry where there is a very large capital outlay involved. If you cannot sell that infrastructure as
a going concern, there is a fairly significant drop in value. Those facilities are not much use for
any other purpose apart from broiler farms. It worked quite effectively to close down a number of
farms that were causing problems within the neighbourhood. So the excision was only granted on
the basis of the farm closing down and the removal of the sheds — the infrastructure. The excision
was a sort of compensation arrangement for the loss of the value of the farm infrastructure. We are
not suggesting that there should be open slather excisions all across. It would be targeted at
dealing with existing problems.
The CHAIR — When we were in Cardinia a while ago — in actual fact during the previous
inquiry — your branch out there called for rural lot excisions. How does that balance out with the
right to farm and the VFF’s policy?
Mr FORD — We have been supportive of rural lot excisions where there is a necessity to have
an additional dwelling constructed as part of the farm operation, which I think is available under
the rural zones at the moment. That is a capacity under the rural zones.
The CHAIR — So you support the further fragmentation of rural land?
Mr FORD — We support it where an extra dwelling is required for the operation of the farm
business.
The CHAIR — Which then can be sold off and cause the problems that you are complaining
about, especially in the peri-urban and interface areas.
Mr FORD — You can never predict what will happen in the future, but obviously there are a
number of operations that do require more than one dwelling.
The CHAIR — That is a bit of a silly answer though, is it not? If you are creating rural lot
excisions that are causing the problems, especially in the interface and peri-urban areas, which
they are, you are saying you do not know and that it is up to the future. But in actual fact it is
causing that problem, so why are you continuing to support it?
Mr FORD — But at the moment the green wedge actually prevents any further excisions, I
understand.
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The CHAIR — Yes, that is correct, but not in the peri-urbans: not in the Moorabools, the
Mitchells, the Baw Baws and elsewhere, as you rightly pointed out.
Mr FORD — We would actually question whether agriculture in most of those areas is not
already to the point that it is encroached upon to the level that is going to make it very, very
difficult for future operations anyway.
The CHAIR — So you want to make it more difficult then for future operations?
Mr FORD — No, that is not our intent.
The CHAIR — No, but it is the ultimate effect of continuing that policy, is it not?
Mr FORD — But one of the problems with creating an additional dwelling is actually getting
the finance do so. Banks have been uncomfortable about lending money where there was not the
excision, and that is one of the reasons why we support the policy.
The CHAIR — And then we have got to fix up the mess by trying to put in right-to-farm
legislation to stop the Toorak weekenders complaining about the cow droppings on the side of the
road.
Mr FORD — I am not sure how many of these rural lot excisions have actually been onsold. I
cannot say the extent of the problem where it has passed on to create other problems. It would
seem to us there is much other fragmentation that is already occurring through other processes.
The CHAIR — All right. Other questions?
Ms HARTLAND — I think you summed it up there, Don.
Mr HODGETT — Your submission talks about compensation for environmental stewardship
of the green wedge land and discusses that a bit. Can you tell us a bit more about how you would
see that working or how you would propose that would work?
Mr FORD — As we highlight through that submission, agriculture has never been a static
industry; it has been under those competitive pressures. The general way that agriculture has
responded is either to become more extensive, so larger scale farms, or more intensive so there is
more being done on the particular parcel of land. When you operate in those areas where there is
already a high level of encroachment and very high land values because of reasons other than the
productive capacity of the land, the capacity to expand or continue an operation or continue to
remain competitive becomes very restricted. So the green wedge in particular places a focus on
amenity values. To our mind that is a community benefit; you are providing a benefit to the wider
community. But the operator of the land itself seems to be bearing a large part of that cost of
providing that amenity with the restrictions on being able to remain competitive. Our view is that
if the community wishes to have those amenity values reinforced and there is a lot of property,
right to expansion or some difficulties in expansion for a whole range of other reasons, there
should be some value placed on those amenity values and that compensation or that arrangement
paid to the land-holder. It could be in a range of ways. It could be through the differential rating
system or it could be specific payments for specific actions or specific outcomes.
Mr HODGETT — How big would the extent of that be, though? You are not talking about
small amounts of money or rewards or rate rebates?
Mr FORD — I guess it depends on how large a stewardship program it is. There are
already — —
Mr HODGETT — Do you have something in mind?
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Mr FORD — In our budget submission this year we suggested $5 million to trial some
stewardship arrangements to see how they work. It is also being pushed at a national level through
the NFF and the federal government about stewardship arrangements. This debate is not restricted
to the interface areas; it is actually quite widespread across the landscapes.
The CHAIR — Would you support a covenant scheme as has been suggested to the
committee whereby green wedge land-holders receive a significant one-off payment and their land
is then protected as rural land, allowing them to stay and reinvest in agribusiness or sell to other
farmers?
Mr FORD — I am not sure how the covenant system would work. You would put on a
covenant to do what? The covenant would restrict what?
Ms HARTLAND — Covenants are used by groups like land for nature — —
Mr FORD — I understand that.
Ms HARTLAND — The idea that was raised with us in the last hearings was that if covenants
were used to protect green wedges a farmer would be given a compensation payment for that land
so that it could continue to be a properly protected green wedge area.
Mr FORD — My experience with covenants in that system has been that a covenant is applied
to protect native vegetation. Covenants protect some environmental outcome, and the
compensation arrangement has been because you have removed a productive piece of land or you
have changed the management of the land which means you cannot operate as a business. It seems
to me that suggestion is not to support agriculture operations but to change the use of the land to
something else which would be almost a stewardship arrangement. I am not quite sure, but that is
what it sounds like.
Ms HARTLAND — One of the other suggestions that came out of the last hearing was that
one of the problems, especially with the issue of right to farm, is that you need some kind of
barrier between what has become semirural residential and the farm so that in some way you
could make these covenants and the green wedges as that barrier.
Mr FORD — I think I understand what you are saying. You would have buffer zones that
would not be for agriculture but would be used for some other purpose, whether that be for native
vegetation or for something else. The agricultural activity would not operate on that parcel of land.
I guess it would work if the compensation was high enough. Generally, the properties in these
areas are not large, and if you start to put a buffer zone around the circumference you shrink them
considerably, which I would have thought would make it even more difficult for them to continue
to operate. I guess it would be about the market. If the market provides a funding arrangement that
is sufficient compensation it would be okay, and I guess it would be a commercial decision by the
property owner. The covenants are already widely available. You can use the bush brokers, the
bush tenders or the Trust for Nature as you have already mentioned. There is a range of systems
out there already, and I suspect probably quite a lot of that occurs in the green wedge zones where
there are very small parcels of land with native vegetation stands that have been traded into the
bush broker or bush tender system.
The CHAIR — In your submission you talked about a green wedge infrastructure fund. What
kind of support would your proposed fund provide to green wedge land-holders?
Ms WILSON — I think the idea behind the green wedge fund would be to provide access to
similar funds as the Regional Infrastructure Development Fund, which at the moment is not
available to some farmers in the green wedges because they are not classified as rural. The VFF
argues that some of the farms in these areas have significant rural characteristics that need the
same kind of support as is available to their rural counterparts. That would be the kind of support
that we would hope this fund would give them.
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The CHAIR — Would it be part of the RIDF or would it be a further allocation on top of the
RIDF?
Mr FORD — We have been quite explicit that we support the way the RIDF is run. It is for
regional councils and we would not like to see that changed. It would be a separate fund. I guess
as far as we are aware the program that is the most popular and which runs through the VFF —
we have a direct involvement through the RIDF — is the stock underpass and overpass program,
which obviously removes the regular crossing of roads by stock and keeps it away from traffic.
Given there is more traffic in the interface areas than there is in rural areas, we can see there are
significant public benefits, but of course because of what the RIDF is the dairy farmers in
particular cannot get access to it. We have suggested that it would make sense to allow some
funds to provide the same outcomes in the green wedge zones. There are a few other things where
horticulture has received support for some of the netting programs. It seems that the stock
overpass and underpass program provides some of the larger public benefits.
Mr HODGETT — I was interested in your planning appeals section and the concept of dust
noise. Are you saying that if it meets the requirements of the responsible authority then it should
be removed as a ground for appeal by an urban neighbour?
Mr FORD — Yes.
Mr HODGETT — How would that work? I am guessing that there would still be some sort of
reasonable restrictions on noise, dust et cetera, but that it would not be a vexatious ground for an
objection?
Mr FORD — I think probably the scare guns — and your area has obviously been at the
pointy end of that — —
Mr HODGETT — Yes.
Mr FORD — Other businesses or other residents have moved in and all of a sudden a practice
that has been acceptable is no longer acceptable. If it was acceptable in the past and someone
moves to that area — and there has to be some reason; we need to accept that you cannot have
completely unacceptable activities — and if it is a standard practice that you would expect to see
in a farming operation, then we believe it should be protected in some way. It is a bit like the
airport. If you move near the airport you have to expect that there will be planes overhead.
The CHAIR — Or the Calder Thunderdome.
Mr FORD — Exactly.
Mr HODGETT — Or Albert Park.
The CHAIR — Albert Park. Absolutely. We won’t go there! Or the netting. When we went to
the Yarra Valley with our previous inquiry there were complaints about the white netting. People
do not like — —
Mr FORD — Exactly. The two ways of protecting crops from birds are scare guns or netting,
and neither are acceptable. People want to be able to look at a rural landscape. I think that is our
point. It is about the contradiction.
The CHAIR — It is a good point. What kinds of initiatives, such as legislation, education,
professional dispute resolution et cetera, have been successful in lessening conflict between
farmers and nearby urban residents, or is appropriate planning and zoning the key? What
initiatives?
Mr FORD — It is probably a bit of a mix of both. I cannot remember the exact section, but
following the right-to-farm debate a few years ago we saw the inclusion of section 32 in contracts
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for the sale of land. There has to be a statement about expecting what activities are there. That
could perhaps be strengthened a bit with more of the councils playing a larger role in explaining to
new residents about the activities that are likely to occur. There are mediation processes that have
been applied in some cases, certainly through VCAT — VCAT can become quite adversarial, as
we know, but can also be quite an easy and simple system to sort out resolutions. In terms of the
new development stuff though, particularly as you would be aware, Mr Nardella, the broiler code
stuff does become an expense for both parties.
The CHAIR — Especially like the Melton council that lost. We will not go there.
Mr FORD — We will not go there. The broiler code is essentially an example of regulation of
an industry that in our view has been suited to these areas. It requires a relatively small footprint as
to the actual production facility itself. The technology has been improving. It does provide
avenues for rural landscapes to be preserved because it seems that you have a very small footprint
in terms of the industrial part of the business, so to speak, and the rest of it is generally back to
timber or trees to shield the sheds. But obtaining a permit — in fact I think the green wedge
actually explicitly excludes all of green wedge A, explicitly excludes the broiler industry; I think
one of them does.
The CHAIR — Not enough.
Mr FORD — Yes. If a broiler farmer wants to put up a shed, they generally allocate a budget
of about $100 000 for the planning process. It seems that it is an industry that can actually operate
quite effectively in maintaining the landscape values. Obviously there are concerns every now and
then about odour problems but they are being addressed with technology. In fact I do not think
anybody would even attempt to build a new broiler farm in any of these areas any more. They
might, but they would be brave.
The CHAIR — You are being recorded by Hansard so I will quote you back to them when we
are back at VCAT. No, it is all right. One of the interesting things that Melton shire does is its rate
rebate for pest weeds which helps the farmers — and you talked about differential rates in your
submission. Could that be improved upon? Is there a better way of doing it, or would the Melton
shire scheme be really one of the best schemes that you know of to try and keep people on the
land?
Mr FORD — We have never been supportive of exchanging a rate differential for an
environmental payment or a service payment. It seems to us that they are two entirely different
things. We are not opposed to having some support given by councils if that is what they choose
to do to try and generate some particular activity flow from land-holders. We do not see that that is
necessarily directly related to a differential rating system. A differential rating system is put in
place for particular reasons which reflect access to services and for disadvantaged sectors of the
community, and we do not see that they should be linked and that you remove the farm
differential to replace it with a weed program.
Ms HARTLAND — Why? I do not quite understand that.
Mr FORD — Because they are for different purposes.
Ms HARTLAND — But I would have thought from reading your submission — and I think
you have made some really interesting points — it all seems that the farmer is put upon, so why
would it not be reasonable to ask the farmer, especially in exchange for a financial benefit, to do
weed control et cetera?
Mr FORD — Perhaps you misunderstood me. I am not suggesting we are opposed to that type
of system in which there are payments for particular types of activities. I guess it is no different
than the stewardship arrangement. All I am suggesting is that it should not be in exchange for a
farm differential, and I think that is what happened. The farm differential rating system was
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removed and a weed rebate was put it in its place. That might have been in Hume shire rather than
Melton shire.
The CHAIR — I do not think that is Melton because there is still a farm rate in Melton.
Mr FORD — Yes. We are very supportive of the Melton project then.
The CHAIR — All right.
Mr HODGETT — This is a question for you, Graeme, or maybe for Madeleine. Do all the
municipalities have farm rates in what you would call the interface or peri-urban areas that you
know of?
Mr FORD — I am not sure if they all have them. There is a wide range of difference. The
Mornington Peninsula Shire — —
Mr HODGETT — Maybe that is something we should research.
The CHAIR — Yes.
Ms WILSON — I know the Shire of Yarra Ranges does.
Mr HODGETT — Yes, Yarra Ranges does.
The CHAIR — Melton certainly does.
Mr FORD — And Mornington Peninsula has a fairly substantial differential. Going from
memory, I think it is about a 60 to 70 per cent discount, so it is very substantial. Again we would
say that is a good model.
The CHAIR — For farmers.
Mr FORD — For farmers.
Ms HARTLAND — I am really interested in this whole concept of the right to farm, and I
absolutely understand what you are saying. I suppose the comparison in the inner city is people
who move next door to a pub that has had live music for 20 years and then they start to complain.
Should we be looking at some kind of buffer zone between the two areas to make sure that one
does not interfere with the other? Or do you think it is about education — that it is explicit on
people’s rates notice or when they buy the property that there is farming next door and these
farming practices occur?
Ms WILSON — I would say it would be a mixture of the two. If there is space, a buffer would
be nice. I think the VFF supports low-density rural living as a possible buffer zone, but it is also a
lot about community expectations, and I think the Sale of Land Act does say that it needs to be
made clear when you buy the property that there is going to be noise, there is going to be mess,
there are going to be smells, and you need to consider that before you buy. I would say it would be
a mixture of the two.
Ms HARTLAND — How many complaints are you aware of? I am aware of that famous one
with a couple who did not like the cow shit on the road and who lost in VCAT, but are there
many — —
The CHAIR — Hansard will record ‘cow poo’. You are not the Prime Minister.
Ms HARTLAND — Oh, sorry. I am from the western suburbs. It is all right.
The CHAIR — I know. So am I.
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Ms HARTLAND — Sorry about that.
Mr FORD — I think the farming community would echo that.
Ms HARTLAND — I just found that one bizarre, to say the least. Are there many of those
kinds of complaints that do end up in VCAT?
Mr FORD — I am not sure of the exact number but certainly there are many. It becomes
almost something of a neighbourhood issue, I suspect, and generally when you see that there is
almost a level of vexatious or consistent complaints between a farm operation and maybe a
neighbour or group of neighbours, generally they would be more involved than just tackling the
activity. Maintaining those relationships has always been very important. But certainly with the
broiler code, particular broiler farms tend to receive a very large number of complaints. Obviously
the scare guns have been creating quite a problem. Cows moving on the roads, as you pointed out,
causes problems, but even tractors too. We are aware of when tractors have moved up between
paddocks and have dropped mud on the road from their wheels — tractor tyres capture quite a bit
of soil — and there have been complaints about that.
Ms HARTLAND — You would not want to get your four-wheel drive dirty, would you?
Mr FORD — I think that has actually been one of the complaints, if I recall rightly, and
someone wanted their four-wheel drive to be washed because it got muddy going up the road.
The CHAIR — Has the VFF considered the potential effects of the carbon pollution reduction
scheme for Victorian farmers, especially for interface and peri-urban areas?
Mr FORD — We have not specified the peri-urban interface areas, but certainly we are
concerned about the impact of the carbon pollution reduction scheme. It is likely to be substantial
on the competitiveness of agriculture.
The CHAIR — In what sense?
Mr FORD — Even as an uncovered sector our input costs are likely to rise substantially,
through fertiliser, fuel and electricity, of course. There are all the sort of built-in carbon costs we
put into other inputs that would be hard to identify. As a covered sector, if that was the decision
that was reached, even with the free permit system under the current trade-exposed emissions, it
would leave a large number of industries particularly in these areas uncompensated. They would
not reach those thresholds that would allow them into those trade-exposed compensation
arrangements. So their costs would go up substantially because they would be building into their
production the carbon costs, or methane converted to carbon. There is still quite a bit of modelling
going on, but we see about a 5 per cent, I think, increase in costs for the farm sector on average as
an uncovered sector. As a covered sector, it really depends. The variation between industries is
quite substantial. Obviously the livestock industry is the one that would suffer the most impact
because of the methane emissions.
Ms HARTLAND — Following up from that, we have had a number of approaches from
farmers around the issue of feed-in tariffs for solar power, if they were able to cover their farm
sheds and out buildings with panels and were getting a decent price for the power. Is that an issue
that has been taken up by your organisation?
Mr FORD — We have not particularly. There have been some discussions internally about it.
I think we did actually make some comments back when the issue of feed-in tariffs was resolved a
couple of years ago. I think our position was that it should be on a gross basis rather than a net
basis, so you do not end buying back your own power at the higher rate, which is effectively what
happens. We would agree that across the state you have a large number of roofs that do not have
the amenity impacts of wind farms, of course. Obviously wind farms cause quite a bit of dispute in
many areas.
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The CHAIR — Usually from land-holders who have missed out.
Ms HARTLAND — I think that wind farms are very attractive.
Mr FORD — It would be very rare that the land-holder with a wind farm on the land would be
complaining, I suspect. You are right.
The CHAIR — Correct. It is usually the block next door.
Mr FORD — Solar power obviously does not have those particular problems, and there are a
lot of roofs on farms, as we are aware.
Ms HARTLAND — It just seems a logical other crop, without having to worry about whether
it was too sunny.
The CHAIR — Just as a last question, one of the things that I am grappling with is the
problem faced by the irrigators down at Werribee South. I do not know if you know about the
situation down there, but the salt level in the water is too high. They have bucketloads of water but
the salt in it is a problem. What are your thoughts on maintaining that area? According to the VFF,
what would be the best way to try to keep those farmers producing?
Mr FORD — Obviously the salt in the recycled water has to be removed in some way. I think
it was being shandied with some fresh water for the first 18 months, but obviously the water
availability is reduced, so it made it difficult.
The CHAIR — Yes, there is no water in the dams.
Mr FORD — It is very difficult to try to find another industry that would operate there without
the water. So it is a matter of trying to fix the water. I suspect that is the solution. How expensive it
is to move that level of salt down to an acceptable and sustainable level is for the engineers at
Melbourne Water, I guess. I cannot see any solution other than finding a fresh water supply to
make sure that the salt levels are acceptable, which will be difficult. Bacchus Marsh is now
heading in the same direction, as you would be aware, too.
The CHAIR — Bacchus Marsh is in a very difficult situation, but we are working through
that. They do not have access to any water, virtually, but again we are working through that.
Thank you, Graeme and Madeleine, for coming along today. You will get a copy of the proof
Hansard transcript. Have a look through that and let us know if there are any minor changes to be
made. We appreciate your time.
Witnesses withdrew.
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