leaseback
Fiveways Landcare Group c/- Joe & Gabe Holmes
email josephh@bigpond.com

PROPOSAL FOR INTRODUCTION OF
A "LIMBO LEASE" IN THE
NORTH LACHLAN-BOGAN REGION



Following the designation of the North Lachlan-Bogan Native Vegetation Region by the Minister for Land and Water Conservation on 17 September 1998, and the commencement of developing a management plan for this region, there has been a difference in interpretation of the Native Vegetation Conservation Act, 1997 by the Department of Land and Water Conservation.

Up until this time, many development and management applications were being approved and reasonable conditions were being placed on this development.  Following the formation of this committee, there has been a definite change in the application of the Act resulting in most development approvals being granted over a significantly lesser area than the original application, or refused entirely.  There were no amendments to the Act, only a difference in interpretation by departmental staff.

Due to these actions by Department of Land and Water Conservation staff,  many landowners have been significantly impacted on by this.  Landowners have undertaken a progressive development program over many years, as seasons and finances allow.  All landowners purchased their properties prior to the introduction of SEPP 46 on the understanding that they would be able to develop these to achieve sustainable and viable agricultural enterprises.  Financial institutions also lent money on this understanding.

The current situation for these landowners is that there has been a complete change in attitude by departmental staff and they are now told that `to clear an acre you must plant an acre'.  This attitude does not take into account the regional vegetation problems that exist from invasive regrowth on areas of previously open grassland that was naturally occurring, severe soil erosion in heavily vegetated areas, and the low percentage of development that has occurred over this region.

From the outcomes of the most recent meeting of the North Lachlan-Bogan Regional Vegetation Management Committee held on April 30 and May 1 in Nyngan, a management plan to cover this region will not be available for two years, minimum.  A significant period of time has already passed - landowners cannot sustain this period of `limbo' any longer.  

It is the opinion of all landowners situated in the area covered by the North Lachlan-Bogan region that they are being unfairly impacted on by an inability to develop and manage their land - irrespective of tenure.

We have been informed through all media sources, all government agencies and by all conservation groups that `development must stop - there has been too much development in the state/country and the urban community demands that there be no more'.  

Members of the urban community that demand the current level of vegetation that exists be kept in its entirety must now pay for this demand.  It is only from outside our region that this perception is held - landowners that are directly impacted on by the effects of this vegetation cannot afford to pay any more.

It is our belief that the most equitable manner in which the community can achieve its goals, the landowners retain a viable business, and our rural communities survive in such harsh economic times, is through the taking up of our lease proposal.

Under the terms of the `Limbo Lease' landowners that have a significant level of vegetation on their properties that they are unable to develop due to the restrictions placed on them by either the Native Vegetation Conservation Act, 1997 or by the Department of Land and Water Conservation will be able to enter into a lease agreement for these trees and vegetation.

The lease will be calculated on the following basis:-

The total area of the property                         **********
Area developed at time of implementation                    ********
Area undeveloped                                        *****


(Landowners have offered to contribute 15% of their property area as their commitment towards conservation in the regional plan.  This is a very significant offer that has been made - and has been allowed for within the terms of this lease.)

Area undeveloped                                        *********
Less 15% of total area of property                            *****
Area of vegetation identified for lease                              ****

A land value will be calculated using the market value for the improved area eg $250/ha, and multiplied by the area identified for lease.

A lease rate will be applied to this amount of 7% (current market rate) and the landowner will be paid this amount from 17 September 1998 until such time as the regional vegetation management plan is actually implemented.  The frequency of these lease payments can be negotiated, but not less than an annual payment.

THIS WILL BE A COMMERCIAL LEASE OF THE TREES AND VEGETATION ONLY BY THE COMMUNITY!

An actual example of how this will work can be seen by using the property `Loxley', Nyngan to illustrate the outcomes:-

Total area                                          3107ha
Improved area                                    400ha     (13%)
Area not included in lease                 641ha     (20%)
Unimproved area                              2066ha     (67%)

Less 15% of total area of property            466ha     (15%)
Area identified for lease                           1600ha     (52%)

Value of lease area @ $250/ha               $400,000

Lease rate of 7%                                        $  28,000

So using this example, annual payments of $28,000 would  be made for the duration of the lease (excluding GST).

All grazing rights will be retained to this area by the landowner.  In the event that these rights are removed, then the opportunity for leasing will be forgone, and the purchase of the land at improved area market values per hectare will occur.

Where the community is not prepared to enter into these lease agreements then the landowners will not be bound to comply with the restrictions to development that are now being enforced by the Department of Land and Water Conservation.  Development will continue by the landowners until the North Lachlan-Bogan Regional Vegetation Management Plan is implemented.











Any maintenance works (eg thinning, soil remediation works) will be carried out on a co-operative basis with the landowner, and the leaseholder will contribute financially to these works as required.



These leases will need to be taken out over a period of time that will be agreed upon in the plan, and all aspects of these leases will be reviewed nearing the end of this time.  

If both parties agree that the lease may no longer be required, then the landowner is bound only to the 15% contribution and consideration of areas defined in the Conservation One segment.


If the plan evolves into setting targets of greater than 15% landowner contribution, then any area greater than the 15% should be leased under this formula - the community must pay for their targets.


Where the community is not prepared to enter into these lease-back agreements, then the landowner will not be bound to comply with limits to development greater than the 15% contribution within the plan, and consideration of the areas identified in the Conservation One segment.



LIMBO LEASE PROPOSAL CALCULATION SHEET
NORTH LACHLAN-BOGAN REGION


Name:          ______________________________________________

Address:          ______________________________________________


Contact Details:     Ph:_______________          Fax:_________________

               Email:________________________

Property Name/s:     ______________________________________________



Calculations:

Total Area                                                  ha

Less Improved Area                                        ha

Less Area not included in lease                                   ha

Unimproved Area                                        ha     


Less 15% of total area of property                              ha


AREA IDENTIFIED FOR LEASE                              ha


Value of lease area @$_____/ha
(market value of improved area)               $               


LEASE RATE OF 7%                    $               

NOTES TO LIMBO LEASE PROPOSAL




This calculation sheet is aimed at presenting all our information to NSW Farmers Assoc and possibly the Government in the same format.  It is intended that this sheet be easy to follow and to complete.

The first step to presenting our case for implementing the `Limbo Lease' will be actually identifying the landowners that are being negatively impacted on by current legislation, where they are placed in the region (it is extremely important that this be a regional initiative - not a local one), and the total amount of funds being petitioned for the region.

The next step will be to either request a State Minister to lodge these petitions for us (with the relevant people in attendance, hopefully) and try and get as much media attention for this action as possible, or if possible try for a change in policy by the Government on these support mechanisms.

Either way we need to be prepared to back this proposal with your time, and your commitment to supporting each other across the region.

When completing the calculation sheet, please use hectares as your basis - consistency will be a very important factor when these sheets are being put together.

The intention of "Area not included in lease" is to cover any areas that are able to be worked on under the exemptions, any land that you would choose not to develop under normal circumstances, or just any land that you don't want to commit to this lease.

When determining the value of the lease area, use the current or estimated market value for improved country in your particular area - there will be variances over the region, and that is to be expected.  

We believe the real strength in this proposal is in its absolute soundness - we haven't used unrealistic figures but have taken a position that is extremely justifiable.

By presenting the proposal in this way we have eliminated the need for negotiation on any of the figures.  If too much padding was put into a claim, then you would be forced to make concessions as to the rates applied - but this way every single figure is justifiable.

By entering into this `Limbo Lease' you are leasing back to the community the trees and vegetation that are unavailable for development at present.

The rights of the landowner to graze all of the land identified for lease is an absolute right - this option will not be open for any negotiation.  If this right is withdrawn, so is the opportunity for lease - we are promoting that outright purchase of these vegetated areas be made at the market rate identified for your improved country.

For too long the landowner has carried the burden for conservation in this state - it is time to return equity to the farmers.

This lease is intended to operate from 17 September 1998 until the time that the North Lachlan - Bogan Regional Vegetation Management Plan is implemented.  It is envisaged that during the formulation of that plan any measures needed to protect equity will be built into the plan.

There has been a figure included of 15% of total property area.  This figure is currently being negotiated by the community representatives on the Regional Vegetation Committee to represent the landowners contribution towards conservation.  There is still a lot of work to be done on this, however it is intended that this area will also have absolute grazing rights for the landowner - there really is no other option available at this time.

Please take the time to complete these calculation sheets, if you know of someone that is being significantly impacted on by the restrictions on development and the effects of a greater than reasonable level of vegetation cover pass a copy on to them.

If you would like to prepare these calculation sheets in a group situation or with just a couple of neighbours, make these arrangements freely - it often helps to talk things over with someone and get another perspective.  A group session could be organised as a NSW Farmers meeting or a landcare group meeting - the possibilities are endless.

Any questions or comments can be directed to the contacts listed below, or if you would like help on an individual basis, please give me a ring and I will try to help.


The completed documents should be forwarded to:

          Mr Matthew Crozier
          NSW Farmers Association
          Fax:     (02)  9221 6931     
Please remember that to achieve success and the confidence to believe that we will all still be here to see the plan implemented, we must all work together and support each other.  There is strength in numbers!

Thank you for taking the time to complete this calculation sheet.

Regards,
Gabe Holmes
Chairman
Fiveways Landcare Group


Contacts:
Gabe and Joe Holmes                    Brian Plummer                
Ph:  68334454                         Ph:     68933863


Doug Menzies                         Stacey Jarvis
Ph:   68322081                         Ph:     68937220

Paul Adam                              Tania Hall
Ph:   68924155                         Ph:   68332185

Neil McDonald                         Phillip Harley
Ph:   68962206                         Ph:   68373822

Elizabeth Brown                         Fran Rowe
Ph:     68322169                         Ph:     68933843

Michael Hoare                         Mark Dutton
Ph:  68330668                         Ph:   68330705