30 June 2026
7 min read
#Planning, Environment & Sustainability
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In the last few years, the NSW Government has made a number of planning reforms to encourage agritourism on commercial farms. A key reform was the 2022 introduction of the new terms ‘farm gate premises’ and ‘farm stay accommodation’ in the Standard Instrument—Principal Local Environmental Plan (Standard Instrument LEP).
Critically, both ‘farm gate premises’ and ‘farm stay accommodation’ as defined forms of agritourism require the development to be on a ‘commercial farm’. The definition of ‘commercial farm’ in the Standard Instrument LEP relies on concepts in the Local Government Act 1993 (Local Government Act) and – somewhat uniquely – the Commonwealth Income Tax Assessment Act 1997 (Tax Act).
In this article, we highlight the nested definitions that make up this land use characterisation and look into a recent case which sees the task of characterisation in practice.
On 5 June 2026, the Land and Environment Court handed down the decision of Baillie Wines Pty Ltd v Camden Council [2026] NSWLEC 1333 (Baillie Wines) which considered these terms. The proceedings were an appeal against Camden Council’s refusal of a development application for the use of a site described as ‘farm gate premises’ including food and drink premises, ‘farm stay accommodation’, a brewery as an ‘agricultural produce industry’ and intensive plant agriculture.
The proposed development included various uses including:
The Council opposed the food and drink uses on the basis that the proposed development was not for the permissible purpose of ‘farm gate premises’, but rather for the prohibited purposes of ‘food and drink premises’ and ‘artisan food and drink industry’.
To be ‘farm gate premises’, the Court would have needed to be satisfied that the development was:
The Court was not satisfied that the farm was a ‘commercial farm’. The Court also found that even if it was, the range of food and drink offerings at the proposed food and drink service went beyond the provision of ‘agricultural products predominantly from the farm’. Similarly, by determining that the farm was not a ‘commercial farm’, the use of the existing concrete pads for caravans could not be for ‘farm stay accommodation’.
The Commissioner determined that the purpose of the proposed food and drink related uses, including the brewery and on-site agriculture, was for the prohibited use of ‘food and drink premises’.
‘Commercial farm’ is defined in the Standard Instrument LEP as a farm on which agriculture is undertaken, either on land categorised as farmland under section 515 of the Local Government Act, or a primary production business within the meaning of the Tax Act, including one that has temporarily ceased because of natural disaster.
As the subject site was not categorised as ‘farmland’ under the Local Government Act, the Court was required to consider whether the farm was a primary production business within the meaning of the Tax Act.
The Court confirmed that a commercial farm does not need to be in operation prior to the grant of development consent for ‘farm stay accommodation’ or a ‘farm gate premises’, but clarified that ‘objective and tangible evidence’ of preparatory or other steps taken towards its imminent operation of the primary production business is required.
The Commissioner found that the form of viticulture proposed as part of the proposed development was not a primary production business under the Tax Act. To ‘carry on a primary production business’ for the purposes of the Tax Act, the proponent must relevantly, ‘carry on a business of… cultivating or propagating plants, fungi or their products or parts’. The grapes proposed to be grown on the site were not intended for sale or for a commercial purpose but instead were proposed to be used for making wine, which would then be sold commercially through on-site facilities.
The resulting wine was found to be an agricultural product, not a product from a primary production business. The business carried out on site was found to be wine making, not the cultivation of the grapes. Similarly, to the extent that the Applicant relied on the cultivation of hops on the site, the business carried out on the site in relation to the hops would be brewing for the sale of beer on site, not the cultivation of the hops. To the extent the market garden involved the cultivation of plants, this again was for the purposes of making food for the on-site food and drink service.
Accordingly, the Court was not satisfied that steps had been taken towards the imminent operation of a primary production business, but rather a business concerning manufactured products and the proposed development was not on a ‘commercial farm’.
The Commissioner went on to determine that even if the proposed development was a commercial farm, the proposed use would not provide visitors to the farm with ‘agricultural products predominantly from the farm’ for the purposes of the third limb of the definition of ‘farm gate premises’.
Had the Commissioner been satisfied that there was a primary production business associated with the growing of grapes at the site, then the relevant agricultural product would have been wine. The Commissioner distinguished this from beer, finding that the transformational process required to make beer, a product that is mostly water, meant that it was not an agricultural product of hops, since hops constitutes less than 1% of the inputs to the brewing process.
In this circumstance, to meet the description of providing agricultural products predominantly from the farm ‘supplemented by products from other farms in the region’, the products from other farms in the region would have been supplementary to the provision of wine on site.
The Applicant proposed a wide variety of food offerings that were not sourced predominately from products of the site, and the Commissioner accepted that main meals and beer are not ordinarily offerings that would be considered supplementary to wine.
Accordingly, the proposed development would have failed on this point even if the Court had found the farm to be a commercial farm.
Baillie Wines serves as a critical lesson on the often complex task of ‘characterisation’ under planning law. This characterisation is often not simple and must be approached holistically and at a level of generality that avoids a ‘fragmented’ conceptualisation of proposed development in its component activities.
This follows on from recent decisions of the Court on agricultural characterisation including Cooke v Tweed Shire Council [2024] NSWCA 50 and Nagra v Coffs Harbour City Council [2026] NSWLEC 1028. The decision in Baillie Wines highlights the importance for agricultural operators of clearly defining what the commercial purpose of their land is, and being able to demonstrate the nexus between their farm and proposed farm gate uses.
For Councils, particularly regional and rural councils, this decision provides useful guidance on how the relatively new land use definitions relating to agritourism should be approached, having regard to enduring planning principles of characterisation. Importing concepts from the Tax Act, the need to have regard to the origin of commodities used in agricultural production, production processes, and the overall nature of the proposed agritourism business operations, may arise.
Our planning team successfully acted for Camden Council in this case and has extensive experience advising and acting in Land and Environment Court proceedings for individuals, agribusiness and local councils on land use, planning and characterisation issues.
We also acted against Coffs Harbour Council in the case of Nagra referred to above, successfully appealing against that Council’s development control order in a case that turned on the task of agricultural characterisation.
If you have any questions or need legal assistance, please contact us here.
Disclaimer
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.
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