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The first inhabitants and traditional owners of the land surrounding the town were the Warrai and Kungarakany indigenous groups. A site near Rum Jungle was selected for one of two demonstration farms (the other was located at Daly River) established by the Commonwealth to investigate the economic potential of the Northern Territory following the administrative hand over from South Australia in 1911. The farm and an associated railway siding were named in 1912 after Lee Batchelor, the first minister responsible for the Northern Territory who died in office during the previous year. The farm operated until 1919, experimenting with different crops and livestock with varied results. The farm suffered from problems attracting and retaining experienced workers amid the strikes and industrial relations turmoil that led to the Darwin Rebellion. Among the crops successfully produced at the farm were melons, pumpkins and cabbages. From 1919, the farm was used both as a private cattle station and an Aboriginal compound.