FARMERS fear they will be rated out of existence unless changes are made to Victoria's rating review system.

That was the overriding message to the Victorian Local Government Rating System Review consultation meeting which sat for more than two hours in Ballarat this week.

Farmers - particularly those who spoke at the meeting from rural shires such as Moorabool and Ararat - said they were concerned that they were fitting the bill for the rest of the population.

Fifth generation Myrniong farmer Nathan Lidgett, who operates eight properties in Moorabool, said the proximity of his properties to Melbourne meant the region was being swamped by "hobby farmers" arriving from the city and from overseas, which had seen land values substantially increase.

"We're farming on the urban fringe, we're greenbelt around Melbourne which means we've still go to be productive farming, which is what they want. But we're being surrounded by hobby farms, which is not necessarily productive farming," Mr Lidgett said.

"We've had rate increases of $14,000 in two years. It's gone from $13,000 to $27,000 in two years. As much as you've got your council caps, your rate notices are not capped. Our production has not increase by $14,000.

"When you've got small councils with not a lot of population, you've got councils that have to support infrastructure in that particular area, but what am I getting for that extra $14,000 out of my shire?

He said it was up to governments to decide once and for all where urban planning stopped and rural land began.

"If you're seeing more spread around Melbourne swallowing more and more productive land, where does that stop?" he said.

"At what point are you going to give the farmers an opportunity to stay on the land? Or are you going to force them out. If you force them to sell, then all of a sudden all you've got is your hobby farms with two horses and a dog."

Wickliffe farmer David Hucker said 450 farming families were contributing two-thirds of the Ararat rates bill. He said one bad crop could spell disaster in a given year given farmers often were only paid once a year.

Victorian Farmers Federation president David Jochinke said it was clear to farmers that the rate system was broken.

"Farmers want to contribute to their communities, but they cannot continue to be burdened with such an unfair portion of local government rates," Mr Jochinke said.

"The rates bill is hitting many farmers especially hard this year as they try to make ends meet after a number of challenging seasons.

"Many farmers simply cannot afford to pay their exorbitant rates bills. Farmers are critical to the Victorian economy and the social fabric of our rural communities. As a state, we cannot afford to rate them out of existence.

But former Ararat Councillor Darren Ford said small towns experienced unintended economic disadvantage as a result of a complex rating system.

He suggested putting more burden on residential ratepayers would only add to socio-economic problems towns like Ararat were already facing.

"The greater population of Victoria pay rates in the residential category that are below that of a uniform rate," he said. "The small towns may represent only 100,000 people in Victoria, but at the same time these 100,000 people are among the most socio-economic disadvantaged.

"Rates are in imperfect wealth tax but the imperfections should not be remedied by exaggerating the impacts upon the most socio-economic disadvantaged."

Other points raised at the meeting included a lack of transparency from councils over how rates were calculated and whether organisations that offer community services, or those private businesses operating out of state-owned land should be exempt from rates.

The Victorian Local Government Rating System Review is being conducted In response to a parliamentary inquiry into the sustainability and operational challenges of Victoria's rural and regional councils.

The State Government says it is committed to the financial sustainability of councils and wants to ensure local government rates are fair and equitable for all of the community.

The independent panel is reviewing all aspects of the local government rating system. It is being chaired by Dr Kathy Alexander, a former chief executive officer of the City of Melbourne.

A final report will be submitted to the Minister for Local Government by March 31, 2020.

If you wish to submit a response to the review, you can go to so at engage.vic.gov.au/rating-review.

There is also a 10-question survey people can complete on the website.

The Courier