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Growth of Sheep Grazing Australian soils and climate, with the recurrent droughts, were better suited for large-scale grazing than for farming, and the most successful and dramatic transformation of the Australian continent occurred in the 1830s and 1840s, as squatters established huge sheep runs. Paying only 10 pounds a year for a license, squatters could claim virtually as much land as they wanted.The expansion of sheep grazing resulted in the colonization of the Port Phillip district, which in 1850 became the colony of Victoria, with its capital at Melbourne (founded in 1836). To the north, graziers also gave the outlines to another colony, Queensland (with its capital at Brisbane), which was separated from New South Wales in 1859.From 1830 to 1850 wool exports rose from 2 million pounds to 41 million pounds. With new immigrants and the growth of the capital cities, each of which served as the major port for its region, the Australian colonies began to agitate for more control over their governmental systems.