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Primary production activities

Primary producers run a business of plant or animal cultivation, fishing or pearling, or tree farming or felling.

Last updated 9 May 2023

Who can be a primary producer?

A primary producer can be an individual, partnership, trust or company operating a primary production business if they undertake:

Operating a business

You need to consider various indicators before you decide if your activity is a business of primary production.

Read are you in business, or Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production.

If the activity is being conducted by a company, see Taxation Ruling TR 2019/1 Income tax: when does a company carry on a business?

You are not operating a business if the activity is better described as a hobby, a form of recreation or a sporting activity.

Plant or animal cultivation

Plant and animal cultivation includes:

  • cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things) in any physical environment
  • maintaining animals for the purpose of selling them or their bodily produce, including natural increase
  • manufacturing dairy produce from raw material that you produced.

Domestic animal breeding

This includes the commercial breeding of domestic pets, including dogs, cats, fish, chickens, and all other animals, and is included under the term 'animal cultivation'.

Fishing or pearling

Fishing and pearling includes conducting operations relating directly to:

  • taking or catching fish, turtles, dugong, bêche-de-mer, crustaceans or aquatic molluscs
  • taking or culturing pearls or pearl shell.

Tree farming or felling

Tree farming and felling includes:

  • planting or tending trees in a plantation or forest that are intended to be felled
  • felling trees in a plantation or forest
  • transporting trees or parts of trees that you felled in a plantation or forest to the place      
    • where they are first to be milled or processed
    • from which they are to be transported to the place where they are first to be milled or processed.

If you are operating a business of establishing trees for the purpose of carbon sequestration (carbon sink forests), you will be eligible for carbon sink forest deductions.

Beneficiaries of primary production trusts

If you are the beneficiary of a primary production trust, you may be in a business of primary production if:

  • the trustee has nominated you as a chosen beneficiary
  • you are the beneficiary of a fixed trust.

This may be the case even where the primary production trust has made a loss.