Pastoralists risk loss of leases

Brad ThompsonThe West Australian
The West logo

Scores of pastoralists have failed to reduce stock numbers and comply with other land management orders in the countdown to leases covering 87 million hectares of WA expiring.

Some face the prospect of drastically reducing stock numbers or not having their leases renewed as the Department of Lands grapples with how to manage the situation.

It is understood about 180 of the 507 pastoral leases in WA remain non-compliant despite repeated warnings to station owners that they risk losing everything when all leases expire on June 30.

The issue is now "front and centre" for banks and financial institutions holding security over stations.

_WestBusiness _revealed last month that more than 60 lease holders, including 31 Aboriginal corporations, were in arrears in rent and vermin control payments. The remainder of the non-compliant stations have failed to act on orders which include cutting stock numbers by up to 70 per cent, maintaining infrastructure and soil conservation measures.

Advisory and corporate recovery firm McGrathNicol said it was briefing banks on the situation and working with a number of non-compliant pastoralists.

McGrathNicol partner Norman Oehme said the issue was coming to a head.

"There are some banks we are dealing with that are concerned in that they have quite a few customers with compliance issues," he said.

Mr Oehme said that in some cases stocking and soil conservaation notices had been ignored for years because the Department of Lands had not had a "big stick" to ensure compliance.

One trigger to ensure compliance has been the sale of stations, which is subject to approval by the Pastoral Lands Board.

Mr Oehme said McGrathNicol handled a sale where the carrying capacity of a cattle station was cut from 35,000 head to 12,000 to make it compliant.

"That basically means you have a very different business you are selling. If you can only have 12,000 cattle, it can only sustain a certain amount of debt and generate a certain amount of income. It has a significant impact on the value," he said.

Lands Minister Terry Redman is expected to meet the Pastoralists and Graziers Association this week to discuss the latest draft of new lease agreements.

Pastoralists will be offered two lease options within weeks, including one which mirrors the existing two-page lease.

The second option is a much more detailed agreement which references modern legislation impacting the industry.

The PGA appears to have succeeded in lobbying for significant changes to the second option, including the removal of a range of clauses on insurance coverage.

Many in the industry are convinced the high number of non-compliant stations will force the Department of Lands into a compromise on lease renewals.

Mr Oehme said that in the interim banks were working with pastoralists to resolve issues.

"What I'm saying to banks is make sure your customers are in the compliant section, that they are receiving the new lease or the revised lease and that they execute that lease in the time frame mentioned," he said.

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails