The pristine waters of the Clyde River on the New South Wales south coast breed Sydney rock oysters that are so clean you can eat them fresh out of the water.

But there are fears the distinctive taste could be lost under new environmental planning regulations being considered by a south coast council.

The New South Wales Department of Primary Industries (DPI) has warned the plans, which include rezoning heavily forested land for agriculture, marine infrastructure and development, could have dire consequences for the local oyster industry.

"It's all very well for me to be a good farmer, but it's the river that has created the unique, award-winning oysters that they are," said Doyle's Oyster producer Jim Doyle, who became the NSW aquaculture champion last year for his Batemans Bay oysters.

In a scathing submission to the council obtained by the ABC, the DPI said council plans to open up currently protected wetlands on private lands for cattle grazing could result in the third-largest Sydney rock oyster harvest area being forced to close for extended periods.

It warned oysters would not be able to be sold without extensive filtration.

Mr Doyle fears interference with the unique marine park environment will damage the industry.

Filtration, rezoning concerns

The filtration process is expensive, labour-intensive and kills the taste that made the Clyde River oysters an in-demand export product, Mr Doyle said.

The pristine conditions mean Clyde River oysters can be eaten straight out of the water. ( ABC News: Peta Doherty )

"It would probably kill every business there — every single one of us," he said.

The Eurobodalla Shire Council has moved to reassure growers that any development applications would still be subject to strict regulations.

But oyster producer Kevin McAsh remains concerned the forested land mapped for rezoning on the banks of his harvest area will be turned into riverside accommodation.

"If you're buying a waterfront property you want to get to the water," said the McAsh Oysters co-owner, who already had to close when a neighbouring property was cleared.

Batemans Bay is also a popular holiday spot, and housing and land are in high demand.

"If you can't get through the mangroves for any reason, then you'll certainly want to clear or under scrub down to an area that's close by the water," Mr McAsh said.

A Clyde River oyster industry body is now calling for the Eurobodalla rural lands proposal to be withdrawn and reviewed by a panel of experts and community members.

Wetlands and swift parrot habitat at risk

The NSW south coast shire Eurobodalla is known for its extensive network of lakes and wetlands. ( Supplied )

The fisheries and agriculture arms of the DPI are among five state agencies to lodge objections to the council's rural lands proposal.

The Rural Fire Service, Office of Environment and Heritage, and Local Lands Service have all called on the council to review its rezoning of 38,000 hectares of land.

Some of the concerns include "blanket rezoning" development in conservation and high fire-risk areas, destruction of swift parrot habitat, and the fragmentation of productive farmland.

Local Land Services said grazing animals on sensitive wetland would reverse years of work protecting the region's wetlands from run-off.

"South East Local Land Services has invested millions of taxpayer dollars in the Eurobodalla, restoring wetlands and riparian systems from the impacts from grazing and protecting these areas through the exclusion of grazing," its submission read.

Landcare volunteer Paul May said it would undo decades of volunteer efforts helping farmers fence off wetlands.

"It's water that eventually ends up in estuaries and is important to the things we treasure so much on the east coast," Mr May said.

Balance is right, Mayor says

Eurobodalla Mayor Liz Innes said the council had taken the agencies' views on board and believed it had the balance right.

"There could be two extreme views. One view says we don't want to see any development on rural land, or any land in Eurobodalla," she said.

"And one view that says we've already got too many controls, too many constraints and there should be no regulation."

Cr Innes said the strategy preserved larger and good-quality grazing and dairy land by allowing little or no subdivision in those areas.

"It allows for small lots in areas that are already fragmented, basically infill where there's already subdivision," she said.

"And it takes the natural environment into consideration, for instance, protecting areas with high-value vegetation and soils, while also providing opportunities for small-scale agriculture, important for our food economy and for tourism."

In an ABC radio interview, the Mayor indicated the proposal was as good as regulated.

"As far as I'm concerned we have heard of all of those concerns before," Cr Innes said.

"Council has signed off on it, the NSW Minister has signed off on it, and as soon as it comes back to council, if the majority of councillors agree, it will be done."

Her statement, during the community consultation process, has angered a number of residents.

Landcare volunteer Paul May says cattle grazing on small wetlands on private lands like this will pollute important wetland areas downstream. ( ABC News: Peta Doherty )

Mr May said it made a "mockery" of public consultation.

"There's been all this consultation with state agencies who are now, again, expressing their concerns over aspects of the proposal," he said.

"It's really thumbing their nose at the community."

Flexibility for agriculture

Grazier Keith Dance said the proposed changes to the Eurobodalla Local Environment Plan would simplify the process of land clearing for farmers, bringing council regulations in line with the state's 2018 Biodiversity Act.

"At least this way we're locked into what the State Government legislation is," Mr Dance said.

"Let's face it, they are the body that controls development issues and the environment."

The Moruya beef farmer, a former councillor who was involved in drafting the strategy, said he hoped the change to local planning would remove red tape for famers managing their land.

Mr Dance said under current zoning, some rural lands did not allow for housing.

"Depending on the locality that you are in, you couldn't live on it and work the farm," he said.

"The aim of the whole idea was to try to encourage people to one, live on the rural land, and plus diversify the agricultural production in the Eurobodalla."

The proposal is yet to be formally signed off by the State Government.

A NSW Department of Planning and Environment spokesperson said the department was aware of the many public submissions and reports from government agencies on the proposed changes to the Eurobodalla plan.

The spokesperson said the council was required to consider all objections and public submissions received during the public exhibition period.

"Once that is complete, the department will undertake a thorough assessment of the submissions, as well as any subsequent reports submitted by council, to ensure the proposal achieves a satisfactory outcome."