GLENELG Shire farmers are livid their rates are budgeted to jump 18.8 per cent while neighbouring plantation land will pay less.

Farmers say their genuine businesses are being discriminated against, while the "false economy" of the managed investment scheme bluegum plantations continues to hurt rural communities.

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While valuation of open farmland has increased 12 per cent and rates are set to rise 18.8 per cent in one year, plantation values have dropped 15 per cent in the wake of the spectacular collapse of the tax-driven MIS plantation companies.

Plantation rates in Glenelg are now expected to fall 10 per cent.

Farmers argue they are paying for the Government's ill-conceived MIS bungle, after the bluegum plantation companies inflated land values.

Lake Mundi farmer Kevin Stark said genuine farmers were "unfairly being taxed on their assets, regardless of whether or not they made a return on them".

"State and federal government need to come up with a better way of funding local government," Mr Stark said.

Casterton farmers Shane and Jodie Foster said MIS continued to badly disrupt the economies of rural areas and farmers were still wearing on-going ramifications.

Glenelg shire council mayor Gilbert Wilson said it was a hard task to get a fair budget and was "mindful of the hardships in rural areas". He said council would review the budgeted rates next month.

"My personal opinion is that forestry industry should be paying more too," he said.