Land tenure

Pastoral leases

Why was it created?

Pastoral leases have been a significant land tenure type for the growth of the Australian agriculture industry. Pastoral leases cover approximately 44% of Australia's mainland (338 million hectares) and are generally situated in arid and semi-arid regions and the tropical savannahs. These leases predominately allow people to use the land for grazing traditional livestock such as cattle and sheep, but have recently become used for tourism, non-traditional livestock (such as kangaroos or camels) and other associated activities.

What does title mean?

A pastoral lease is a title issued for the lease of an area of Crown land to use for the limited purpose of grazing of stock and associated activities. It is a limited property right and does not provide the leaseholder with all the rights that attach to freehold land. Specific conditions are often attached to pastoral leases, including a time period and the type of activity that may be permitted.

The primary responsibility for the management of pastoral leases falls on the relevant State or Territory Government, with those in northern Australia having specific legislation for the administration of the lease. The terms and conditions of pastoral leasehold differ significantly across the three jurisdictions within northern Australia.

Native title can co-exist with pastoral leases, regardless of whether a determination of native title has been made. Any upgrade to the pastoral tenure will impact on native title and will require the statutory process setting out native title procedural rights to be followed. At a minimum, a notice to the affected native title group will need to be provided. In some cases, consent of the native title group will also be required. In this case, it is common for an Indigenous Land Use Agreement to be made between the proponent and the affected native title group.

A pastoral lease may have the following restrictions:

  • the arrangements may restrict leaseholders from using their land for activities other than grazing
  • the expansion of other activities may require additional approvals from government and these may not be transferrable between parties
  • as leasehold does not have the same security as freehold, this may affect ability to access finance and capital
  • existence of state based regulations and requirements that might not apply to other forms of tenure.

Much of northern Australia comprises pastoral leases held under Crown land.

Case study

Development on Pastoral Leases

McArthur River Mine is located in the Gulf of Carpentaria in the Northern Territory of Australia 900 km southeast of Darwin. The mine is contained within five adjoining mineral leases located on the McArthur River Station Pastoral Lease. The 8,000 km2 station is an operating property leased and managed by Colinta Holdings Pty Ltd, a GlencoreXstrata subsidiary. It runs around 17,000 head of cattle. Bing Bong loading facility is situated on a mining lease also located within the McArthur River Station. This mineral lease extends into the Gulf of Carpentaria which includes the navigation channel between the loading facility and the offshore transfer zone.

Who can hold pastoral leases?

Both individuals and corporations can hold pastoral leases.

Pastoral leases in the Northern Territory

In the Northern Territory, pastoral leases are governed by the Northern Territory Pastoral Land Act 1992 and Crown Lands Act 1992. Pastoral leases can be issued for ‘pastoral purposes’ including some supplementary or ancillary uses. Under recent changes to the Pastoral Land Act, lessees can now apply for diversification permits, allowing multiple income streams to be generated. This now extends to agriculture, horticulture, aquaculture, tourism, and forestry activities.

They can be issued either for a fixed term (with an initial period of up to 25 years and further renewal), or be of a perpetual nature. The majority of the 223 pastoral leases in the Territory are in perpetuity. The granting of a lease, or a change to lease conditions, must be approved by the relevant Minister.

Key features of pastoral leases in the NT:

  • There are some restrictions on concentration of pastoral holdings of greater size than 13,000 square kilometres by the one person or company.
  • While the Minister for Land Resource Management has broad discretionary power to vary lease conditions, non-pastoral uses are facilitated under the Pastoral Land Act's non-pastoral use permit system, administered by the Pastoral Land Board.
  • There is a legislative mechanism in place under the Crown Lands Act that will, in certain circumstances, enable the lessee to apply to excise a part or all of the lease for which the tenure may be changed. Any such change would be subject to native title where claims are pending.
  • Where native title applies, any land uses that do not fall under the umbrella definition of 'primary production' must satisfy native title as provided for under the Native Title Act 1993 (Cth).

The Native Title Act also provides for a general duty of the lessee in relation to sound management practices. This is reflected in an administrative focus of the Territory government to ensure sustainable land management including:

  • recognising rights of Aboriginal and Torres Strait Islander peoples to follow traditional pursuits on pastoral land
  • conducting resource appraisals
  • monitoring of the condition of rangelands
  • promotion of property management plans
  • regulation of stocking levels
  • protocols on public access.

Any change in the use of a pastoral lease has the potential to affect the underlying native title. The Pastoral Land Board has produced guidelines to outline the process to ensure compliance with the Native Title Act before approving a permit for a non-pastoral use.

Pastoral leases in Queensland

It is estimated that there are approximately 1000 pastoral leases in existence covering about 40% of Queensland. Pastoral leases in Queensland are considered under the Land Act 1994, allowing a large area of land to be rented from the Crown for pastoral purposes for a fixed period of time. The lease is generally held for a long period of time.

Pastoral leases are granted for pastoral purposes and may be used for grazing or agricultural purposes. These leases can also be used in some instances for other purposes - including, for example, the production of energy from renewable sources- provided the purpose of the lease is amended to include the additional purpose and the change of purpose is not inconsistent with native title. Recent changes to the Land Act 1994 also mean that landholders can apply to extend their lease for a term which will be for no longer than the current term of their lease (known as a rolling term lease).

Case study

Consolidated Pastoral Company (CPC):

CPC is an Australian based Agrifood business who owns and operates a portfolio of 20 cattle stations, nine of which are located in Queensland, with a carrying capacity of 375,000 head of cattle across 5.7m hectares (greater than size of Switzerland) of land in Australia.

At Isis Downs in Queensland, the subsequent acquisition of nine surrounding properties has given CPC a 2,327 sq km aggregation capable of running 21,000 cattle. CPC direct sales channels primarily involve selling cattle and beef to Asian consumer markets, domestic feedlots or processors, and exporting live cattle.

Pastoral leases in Western Australia

Pastoral leases are primarily situated in arid and semi-arid regions within the north and regional Western Australia. Over one third of the State's area of 2,532,974km2 is subject to pastoral leasing. As of 1 July 2015, 435 pastoral stations had their leases renewed on the same conditions and for the same terms as previously existed. Pastoral leases can be renewed and may be suitable as security for financial institutions.

The Department of Lands has produced a Pastoral Purposes Framework that provides a guide to a range of activities that can be undertaken on a pastoral lease.

The relevant State body for information on pastoral leases is the Department of Lands. The Minister for Lands has a joint responsibility with the Pastoral Lands Board under the Land Administration Act 1997. The roles and functions of this Board include:

  • ensure pastoral leases are managed on an ecologically sustainable basis
  • monitor the numbers and the effect of feral pests and stock on pastoral lands
  • develop policies to prevent degradation of land and erosion.