TICKY FULLERTON, PRESENTER: We're told often enough that Australia can become the food bowl of Asia. We're also told we must add value to our exports.

Well that's exactly what farmer David Blackmore has been doing. He runs an award-winning Wagyu beef farm in Victoria. The meat he produces sells for $200 a serve in top restaurants here and overseas.

But David Blackmore has found himself at the centre of a major dispute as a result of his farming methods, which involve him feeding his cattle grain as well as grass. His neighbours, local businesses and the council have all entered the fray, along with a celebrity chef who's come to his defence.

NEIL PERRY, CHEF, ROCKPOOL: I think that the reality of it is that you just cannot call that factory farming, you cannot call it intensive farming. This is just tranquil, ethical, sustainable farming.

TICKY FULLERTON: Well despite endorsements like that, the local council has told David Blackmore that he doesn't have a permit to intensively farm cattle.

Now, unless he changes his farming methods, he'll have to move his business.

The question is: how has it come to this?

Lateline's Ginny Stein has been investigating.

GINNY STEIN, REPORTER: Tonight is award's night for paddock-to-plate devotees.

The nation's top food producers are being singled out for praise, and once again, homage is being paid to this man, David Blackmore. He's considered the godfather of Australia's finest and most expensive meat.

DARREN ROBINSON, CHEF, THE FARM: Blackmore Wagyu, like, he's this legendary brand and person.

MAGGIE BEER, COOK AND FOOD WRITER: He's known internationally. He has given Australia kudos with what he's able to do and I support him.

DAVID BLACKMORE, WAGYA BEEF PRODUCER: For us, these are the most important awards in Australia. To get recognised by our - the people that use our product makes them the most important awards for us.

GINNY STEIN: In this room there are accolades aplenty, but back home, he can't escape a looming battle over his intensive farming operation that could force him to move.

DAVID BLACKMORE: Look, the bottom line is that we really don't want to move. We've moved farms three times, which farmers just don't do, but we moved farms three times because this was the perfect location for our business and for our cattle.

GINNY STEIN: Here, when David Blackmore calls, his herd comes running.

He says there is one sure-fire way to know if his cattle are happy.

DAVID BLACKMORE: We try to take the stress out of their life and this is what I try to teach the young staff when they start here is: watch the cattle. They'll tell you whether they're happy or not by their actions and what they're doing.

GINNY STEIN: A fifth-generation farmer, he's been here on this river flat for 12 years.

DAVID BLACKMORE: Our cattle here can eat, drink, go and lay down sit chew their cud and that's what cattle are meant to do.

GINNY STEIN: But the changes he's made to his farming methods have upset his neighbours and led to complaints to the Murrindindi Council.

Almost four years ago, David Blackmore abandoned commercial feedlots and moved to a farm-fed program. Small mobs of cattle were moved into two hectare grass paddocks and given water and additional food. That's when the problems began. Angry neighbours claim its feedlot by stealth.

JOSIE ANDREETTA, NEIGHBOUR: I knew what was here and for five years it was exactly like what we expected. David changed his practice of how he farmed.

GINNY STEIN: Josie Andreetta and her husband Bruno are the Blackmore's closest neighbours. Blackmore Wagyu surrounds their small property on three sides.

DAVID BLACKMORE: This is the neighbour right here. You've got him in one - and that's his area around here.

GINNY STEIN: They're smack bang in the middle of your farm?

David Blackmore: Absolutely. Our farm was three dairy farms and that's the house there - where are we? That's their house there.

JOSIE ANDREETTA: We're not whingeing, we just want a fair deal. We just want to be able to live in a country area, and yes, we are in the middle of what was a farm, a normal farm with animals roaming in bigger paddocks.

GINNY STEIN: Josie Andreetta has a litany of complaints. Noise, dust and smell are at the top of a long list.

JOSIE ANDREETTA: We have to live every day with odours and that's not normal farming. We have to listen to the mill every day. And it's not just five days a week, its seven days a week, every day of the year.

GINNY STEIN: The Andreetta's claim the Blackmore's new practice of laying out supplementary feed for their herd has drawn large flocks of native birds to the area.

JOSIE ANDREETTA: We can't drink from our water tanks. We listen to the corellas and the birds screeching every day. We thought we were buying into a little piece of heaven, really, a property that was surrounded by normal farming.

GINNY STEIN: What is it now?

JOSIE ANDREETTA: It's a nightmare. It's - we have to live like this and it wasn't a choice to live like this.

GINNY STEIN: Over the past few years the Blackmore's have attempted to resolve their neighbour's complaints.

DAVID BLACKMORE: We've actually blocked off one side, so on their living side, so we don't drive past it. On the other sides of their house, we've put in sprinklers so we can keep the dust down in summer and - you know, but at the same time, we're running a farm. They never came to us before they bought to say, "What do you do? How do you do it?" They just bought the farm and then came in and decided that they didn't like the farming activity around them. And we're a busy farm. Don't get me wrong, we're a busy farm because we feed cattle every day.

GINNY STEIN: Once-neighbourly relations have soured and now there are fresh voices in opposition.

Craig Gloury runs a caravan park across the river from the Blackmore's farm.

CRAIG GLOURY, CARAVAN PARK OWNER: We can have up to 5,000 corellas here roosting in the trees and the noise is horrendous. The damage they cause to the trees is obviously damaging the trees and then people camping under them. If you've got 5,000 birds pooing all over you, it's not very pleasant.

GINNY STEIN: You blame the corellas on one person, don't you?

CRAIG GLOURY: Yes, we can see exactly where the corellas are coming from. If you go up onto the hills, you can actually watch them fly from the Blackmore farm to us along the river. You can actually see it.

STEPHEN HANDBURY, ANVIL ANGUS: This is the southern portion of the intensive feeding operation and that's just on 1.4, 1.5 k's to the caravan park. Back to us, it's at - across there, 500 metres.

GINNY STEIN: And now farmer Stephen Handbury, who's a relative of Rupert Murdoch and who comes from a long line of farmers, has taken the unusual step of speaking out against a fellow farmer.

STEPHEN HANDBURY: Principally our biggest concern has been the birds and they're our biggest primary impact directly on us. We have concerns for our friends that are living in the middle of this. They were quite happy to move in to a farming community and live next to a farmer, but that sorta changed three years ago when farming became an intensive feeding operation.

GINNY STEIN: With a growing list of complainants, the council stepped in, calling for the Blackmore's to apply for a permit.

MARGARET RAE, MAYOR, MURRINDINDI SHIRE COUNCIL: Well you always treat complaints or comments seriously. I mean, that's very important.

GINNY STEIN: After seeking advice, the council drew up a list outlining the grounds under which it would consider issuing a permit. But when the council met to vote on its own advice, they voted against allowing a permit to be issued.

David Blackmore was told he had 60 days to close down or change his farming practices.

DAVID BLACKMORE: Look, I think there's over 20. I would guess that we're probably doing 15 of them anyway. I do not have a problem with any of the testing that they're asking us to do. We were doing it anyway. We've been doing soil testing and water testing for quite some number of years. We don't - we don't want to ruin this beautiful property. You know, it's here for our children.

MARGARET RAE: It's much more shades of grey than black and white. When you're trying to balance things like the use of the land, the right to farm and farming practices, that's terrific, but the planning scheme requires we also look at environmental impacts and, for example, it's on a flood plain and some of the concerns raised were around groundwater, around runoff, around nutrient levels in soil, about disposal of manure and issues like that.

GINNY STEIN: The state's peak farming group has labelled the decision as absurd.

Now chefs have joined forces in a public campaign to support David Blackmore.

NEIL PERRY: It just has this explosion of flavour. Tender, juicy and then you get that beautiful caramelly kind of flavours out of it. To me, it's just one of the great pieces of meat in the world.

GINNY STEIN: Neil Perry is leading the charge.

NEIL PERRY: I mean, these cows are grazing on grass, they are laying in grass, they are running around a paddock, they're walking up to a fence to have some supplement food. You know, this is, like, really fantastic farming at its best. It's world best practice. This is the way that everybody who cares about ethics and sustainability should be pushing our farmers to do.

GINNY STEIN: David Blackmore has less than a month to decide whether to mount a legal challenge to this decision and then there is the matter of what to do with his cattle.

DAVID BLACKMORE: If we have to move out in 30 days, I've actually got nowhere to put my cattle. We've checked the feedlots. All the feedlots are full because of the droughts up north and it hasn't been a great season in Victoria till now, so they're all full. I don't know what I'm gonna do with my cattle.

GINNY STEIN: The countdown to a decision is looming fast. For the first time in a long time, David Blackmore appears uncertain about what his next step should be.

TICKY FULLERTON: And in a statement to Lateline the Victorian Agriculture Minister Jaala Pulford said, "It would be terrible to see a fantastic Australian business go under". She's promised to meet with the state's Planning Minister this week to discuss the matter.