In a recent Senate Enquiry into the effects of the Vegetation Management Acts, farmers and graziers sought Just Terms compensation for any new law, restriction or activity on their property that restricted their production or potential production.
Although historically never offered, it was felt that compensation should include the loss of market value of the land as well as annualised value of the loss of production $’s from that land over a reasonable term say 10 years as well as the devaluation of any capital infrastructure that was previously required to support the production from that land. ie: water improvements, fencing, stock yards, employee quarters. For example yards may have been constructed to handle 500 head but now only required to handle 300 head; fencing and waters were constructed to serve the land and are no longer required; the property may not longer need to employ as many workers.
Failing any adequate “Just Terms” compensation it was felt that the only effective outcome would be for whoever places a blot (encumbrance) on a property then they should buy it (not just offer compensation) and the purchase price should include a premium above market value to allow for re-location.
We are now seeing this type of outcome as mining companies purchase properties over which they have leases and the prices they are paying are in excess of reasonable market value within the rural industry.
The flip side to this is the subsequent loss of prime farming land to mining and the difficulty for the displaced farmer in finding a suitable replacement property.
The other disturbing outcome is the purchase of farming country by mining companies that are foreign owned. Recently a Chinese mining company purchased 43 properties in the Liverpool Plains area, near Gunnedah in NSW at individual values that came under the criteria for approval by the Foreign Investment Review Board (FIRB).