Governors of NSW were given authority to make land grants to free settlers, emancipists and non-commissioned officers but not initially military officers. However, in 1788 there was no land policy and little attention had been paid in the selection of men who understood farming for the First Fleet. This combined with the unproductive land round Sydney Cove initially led to food shortages and the need to import food to the new colony from South Africa, India and the Dutch colonies to the north. Phillip quickly concluded that reliance on imported food was untenable and that the colony should, as quickly as possible, become self-sustaining. Early exploration of the immediate area identified two possible sites both of which had good fertile soil: Rose Hill, which later became Parramatta and the valley of the Hawkesbury River. However, by the end of 1788 only twenty acres had been sown, the convicts proved more adept at stealing than producing food and the government farm at Rose Hill produced insufficient grain to feed the population of convicts and marines.
Phillip’s solution was free settlers who, he wrote in 1790, were ‘absolutely necessary’. For Phillip, free settlers meant landed proprietors who could ‘bring with them people to clear and cultivate the lands, and provisions to support those they bring with them’. Effectively he wanted to transport existing English farmers to NSW rather than ordinary settlers who he thought lacked that ‘spur to industry’ provided by the possession of capital. Phillip was hampered by his instructions: his first commission did not mention land and his second dealt only with emancipated convicts who would be allocated 30 acres of land and a further 20 acres if married with 10 acres for each subsequent child. This established the basic allocation of 30 acres. It was not until August 1789 that it was provided that encouragement should be given to marines and free settlers but ‘without subjecting the public to expense’.  Marine privates were to be allocated 80 acres (30 acres basic allocation plus 50 acres bonus) and non-commissioned officers were entitled to 130 acres or more if they were married and had children. The regulations did not provide for retired commissioned officers to receive grants and since grants for free settlers were not to exceed non-commissioner officers, the expectation in NSW was that grants around 100 acres became large farms.
Phillip had little choice but to disobey these instructions since he had little faith in the marines as potential settlers and was forced to extend government aid for longer than was intended. In an attempt to deal with the food crisis, Phillip in November 1789 granted James Ruse, a freed convict the land of Experiment Farm at Parramatta on the condition that he developed a viable agriculture and became the first person to grow grain successfully in Australia. However, lack of transport meant that crops, when harvested, would not be readily available for Sydney. Three free settlers, Phillip Schaffer perhaps the most important, soon settled at Parramatta. It is difficult to under-estimate the importance of this early farming at Parramatta since had it failed it is possible that the colony would also have failed. Phillip strictly followed his orders with regard to and grants to emancipists and during 1791-1792 he allocated 63 farms to 64 emancipists around Parramatta. However, he used his discretionary powers to give 60 acre basic allocation to those applicants with low social standing, such as seamen with the additional entitlement of 2 acres for a wife and 10 acres for children. Finally, Phillip allocated a minimum of 130 acres to free immigrants. The system introduced by Phillip ensured that every group of colonists (emancipists, those with low social standing and free immigrants) apart from officers and serving military could receive land grants. By 1791, there were 87 settlers, emancipists and seamen or marines of whom 50 were on Norfolk Island but the focus for cultivation was on the Parramatta. By October 1792 when Phillip left the colony, some 1,700 acres were under cultivation.
This ensured NSW’s survival but the expansion of the original settlement at Sydney Cover had thrown up new problems. Many of the early free immigrant settlers proved to be poor farmers. In addition, there was a problem of officers being granted land on which to grow food but without tenure. By mid-1791, several officers agitated to become official part-time settlers whilst remaining on full pay and doing garrison duty and in November 1791 Phillip wrote to Grenville asking for approval to allow officers to own land whilst on a tour of duty. Although approval did not arrive until 16 January 1793, two weeks earlier Grose had already granted 25 acres of land at Parramatta to Ensign William Cummings. The problem was that Grose was given no indication of the appropriate grant size and his method of calculating this for the officers was unclear. In practice, by the beginning of 1794 almost all of the civil and military officers on the mainland had received grants around 100 acres. Although Portland had spoken decisively of a grant to an officer in the singular, under Grose second grants were also made. Of the 39 grants he issued on the mainland, only 29 officers were involved. Grose provided no explanation to London explaining his decision and this represented the beginnings of a land policy that advantaged officers. Under Grose, at least 157 of the free population including serving officers and soldiers received land. Some were given what the regulations dictated while others received a second grant increasing their holdings. Grose may have been generous to his officers but he also began downsizing some grants without any authorisation to do so. In 1794, only three of the 140 mainland grants to emancipists were over 30 acres, despite many of the grantees being eligible for larger acreages. This applied particularly to the developments on the Hawkesbury where ex-convicts were evidently being reduced to small farmer status.
 Roberts, Stephen, History of Australian Land Settlement 1788-1920, (Melbourne University Press), 1924, reprinted 1968 remains, despite its age, the most systematic study of land policy.
 Ibid, Barkley-Jack, Jan, Hawkesbury Settlement Revealed: A new look at Australia’s third mainland settlement 1793-1802, is a revisionist study that is valuable on land policy generally in the 1790s.
 Phillip’s instructions on land grants, 22 August 1789, HRNSW, Vol. 1, (2), pp. 256-259, HRA, Series I, Vol. 1, pp. 124-128.
 An account of Ruse’s methods is given in Tench, Watkin, A Complete Account of the Settlement at Port Jackson, pp. 80-81. Initially Ruse was only give 1½ acres but was promised 30 acres if his experiments proved successful and on 22 February 1792 Ruse was given the first formal grant in NSW. See also, HRA, Series I, Vol. 1, pp. 277-282.
 The problem of the lack of artisans and farmers identified by Phillip was quickly acknowledged in London and ‘it is advisable that twenty-five of those confined in the hulks...who are likely to be the most useful should be sent out in the ship [Lady Juliana] intended to convey provisions and stores’: see Lord Sydney to the Lords of the Admiralty, 29 April 1789, HRNSW, Vol. 1, (2), pp. 230-231.
 HRNSW, Vol. 1, (2), pp. 540-541 lists the 87 settlers and their grants.
 Phillip to Lord Grenville, 5 November 1791, HRNSW, Vol. 1, (2), pp. 532-539. It was approved in Dundas to Phillip, 14 July 1792, HRNSW, Vol. 1, (2), pp.631-632 and reached NSW on the Bellona on 16 January 1793.
 HRNSW, Vol. 2, p. 35 lists the grants made from 31 December 1793 to 1 April 1793.
 See HRNSW, Vol. 2, pp. 212-213.