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Authorities have quarantined a property near the New South Wales and Victorian border after one of the birds recorded a weak reaction to an avian influenza test.
It is the first time Australian officials have isolated a property in response to concerns about avian flu, which has killed more than 70 people through Asia since 2003.
Agriculture Minister Peter McGauran today said the quarantining of the property, near Wentworth, a town on the Murray-Darling River junction just north of Mildura, was a precautionary measure.
The chicken was originally tested by the state laboratory because it was suspected of having the common Marek's disease.
The Department of Primary Industry in New South Wales is dealing with a high number of reports of major diseases like avian flu and foot and mouth.
Last week a property in Wentworth, on the NSW-Victorian border, was quarantined when tests on dead poultry indicated avian flu.
Although the property was later cleared, it is one of more than 70 reports in the past month, according to the chief vet in NSW, Bruce Christie.