Dairy farmers Stephen and Francine Bateman had their plans to sell off an unused, ageing farmhouse at the front of their Bostocks Creek property thwarted by Corangamite Shire Council.

The couple wanted to subdivide the property to create a smaller boundary around the house, retaining the majority of the farmland while selling a small portion with the dwelling.

The property currently consists of three saleable allotments, but proposed to redistribute it to two.

The Batemans live in Camperdown and have rented out the house ever since they purchased the farm more than 20 years ago.

A young family currently renting the farmhouse approached the Batemans with an interest to buy the home, which requires much-needed renovations, prompting the planning application to the council to subdivide.

Fourth generation farmer Stephen Bateman said they did not have the means to carry out the renovations needed on the home and saw it as an opportunity to put the house to good use.

"It would have been a very good option because it's not viable for us to renovate or improve the house," he said.

"It's also frustrating that similar applications have been approved in the past but not ours, it seems as though the precedent is set for some but not others.

"This could have been an opportunity to reinvest not only back into our farm, but back into the community.

"If we wanted to sell the house with the current subdivisions we would lose a lot more dairy land just to remove the house from the land."

Colac lawyer Anthony Bright told the council that the selling of the house would not impact on the operation of the working farm.

"Our client has worked this farm for over 20 years, during this time the dwelling has been a rental property," Mr Bright said.

"Given the dwelling is not necessary to to run the viable farming operation, we contend that economically and environmentally it would be better for council to approve the permit.

"Approving this permit would bring a cash injection back into the farm, then back into the community."

But despite their best efforts, the permit was knocked back by all except Cr Simon Illingworth.

"Less houses mean less families and less population," Cr Illingworth said.

"This house could be bulldozed when we need more and more houses.

"Affordable housing in this country is a problem, why would we knock this back? There were no complaints from locals.

"Local farmers are getting pushed to the brink, I think it's absurd to bulldoze this house when a family is living in it and willing to rent it and more importantly, buy it."

Other councillors disagreed, saying the subdivision would threaten the future of the farm, taking the opposite stance to neighbouring councils, including Moyne Shire.

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The house is only 75 metres from the working dairy.

"The closeness is the primary issue for me," Cr Ruth Gstrein said.

"Agriculture is without a doubt a major industry and must be protected as a viable product and avoid fragmentation.

"It's not about the conflict now but the future conflict when the Batemans perhaps sell their farm and someone else moves in, we must protect the right to farm.

"It would be like moving next to the pub and complaining about the noise."

The sentiment was echoed by Cr Helen Durant.

"It has the potential to raise issues with farming rights in the future," she said.

"Once separated there will be a permanent change of land use, and this site has been identified as highly productive agricultural land."

The Batemans own 220 acres of farming land while also leasing a further 430 acres off two neighbouring farmers.

Mr Bright said the fact that the farm had operated for so long without use of the house or area immediately around it undermined the shire's concerns.

"There have been tenants in the house for the past 20-plus years, which makes the potential for conflict a moot point," he said.

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