Council said it was speaking with residents who live east of the Shepparton Alternative Route about land use conflicts between urban, residential and agricultural.
The recommendations in the draft plan said the land was "not suitable for residential or industrial development".
“State and local policy support this land being retained for agricultural uses,” the draft said.
Despite the recommendation, small sections east of the Shepparton Alternative Route is already residential, including the Dobsons Estate precinct.
Council’s strategic planning team leader Michael MacDonagh said council was still in discussions with Shepparton East residents who want the land to become residential.
“These landowners have cited their concerns about conflict and requested rezonings,” he said.
“We're going through a process to better understand what's impacting on agriculture in that area, its feasibility and its viability.”
Mr MacDonagh said previous decisions by council more than 20 years ago, such as approving the residential Dobsons Estate east of the Shepparton Alternative Route, had attributed to the conflict between council and landowners.
He said council had taken into account risks with keeping the land as agriculture, including water availability.
Mr MacDonagh said Shepparton-Mooroopna had sufficient and identified zoned residential land for the next 30 years.
He said the Victorian Government recently rezoned land in Shepparton North, Kialla and Shepparton South.
Mr MacDonagh said council also must ensure there was enough land for industrial use.
“Realistically there's no need for the urban area to move out into Shepparton East at all, making Shepparton quite north-south (development wise),” he said.
“There are understandable constraints to why that has happened.
“The Shepparton South-East precinct will be a new growth corridor, as well as normal growth of the unit development and densification within the urban area that's the bulk of our housing needs for the next couple of decades at our current rate of one per cent growth per year.”
Mr MacDonagh said council would most likely release its plans for the Shepparton South-East precinct later this year.
He said further consultation was expected to finished within the next six weeks.
He said council would consider a final document by mid-year.
“This document is going to set the scene for everything — Mooroopna, Shepparton and Kialla — for the next 30 years so we need to make sure we get it absolutely right.”
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