The Tasmanian Farmers and Graziers Association has called for local government planning reform to make it easier to build permanent or temporary housing on farms.
President Ian Sauer said the the system of "one title, one house" was brought in many years ago, but was no longer working.
"Those laws were brought in many years ago, to stop little 'villages' being set up on farms," Mr Sauer said.
"Housing on prime agricultural land certainly isn't the best use for it - they are not making much more of it.
"But I think the times have changed - I think the dairy industry is a classic example, there are pockets in the north-east and north-west where it is difficult to get workers and one of the impediments is the lack of housing, close by."
In south-west Victoria, Corangamite shire recently voted to free up restrictions around worker accommodation.
The TFGA had directly lobbied federal members of parliament to support funding for 30,000 regional homes within five years.
"The accommodation crisis forces employers to search for alternative accommodation options, ensuring that workers have affordable and suitable places to live near their workplaces," Mr Sauer said.
"Within a limited market, this translates to purchasing, constructing, or renting properties on existing land and housing inventory within surrounding communities.
"However, this exacerbates the strain on property and rental markets, giving rise to more social issues than it resolves."
He said in the past the industry had relied on pubs and caravan parks to house seasonal workers.
But with the state's increased popularity as a tourist destination, and the uptake of the short-stay market, that was no longer an option
The need to invest in on-farm accommodation was even more crucial than ever.
Mr Sauer said he had reached out to Housing and Construction Minister Nic Street, Primary Industries Minister Jo Palmer and Premier Jeremy Rockliff urging them to take decisive action in addressing the issue as a matter of urgency.
"We have asked for a roundtable discussion of stakeholders to look at some pragmatic solutions," he said.
He said now Tasmania had a state-wide planning scheme, which should help.
'In the past, nearly every council in Tasmania had its own planning scheme, so there is now a degree of consistency and harmonisation through planning laws - it may well be how you interpret the scheme," he said.
"The TFGA is asking the government to allow increased farm-led investment in worker accommodation.
"Given the restricted housing options across the state, we firmly believe that farmers should encounter fewer regulatory obstacles when constructing accommodation on their properties."
That opinion should encompass the construction of housing units and accommodation blocks and transportable and demountable accommodation.
"You only have to have three or four extra families in some of these towns and you increase the cricket and footy club and people shopping locally," he said.
Tasmania had set ambitious targets for the growth of agriculture, and it would be a shame if it couldn't meet them, due to issues like a lack of accommodation.
"We want to make sure we can break down any of those impediments, or barriers, it's hard to reach those targets, there is always something in the way so you have to knock out the ones you have control over," he said.
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