The Oatlands District Football Association will run as a five-team competition in 2020 after Oatlands and Swansea announced they could not field teams this season.
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The ODFA made the announcement via its Facebook page on Thursday night, saying a new fixture would be drawn up with the first round to begin on March 28.
Oatlands president Tony Paul said he had left Thursday's club meeting disappointed after a lack of player numbers left the club with no choice but to pull out.
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"We started to worry late last year - we had a lot of people commit and then other clubs offered them more money which is the killer of country football," he said.
"There's not the youth in the towns any more - they all go off to town for school, they all end up in town playing football and that's where they stay.
"If you go back at Oatlands quite a few years there was a Telstra depot there, there was a hydro depot there, there were other businesses there and there were always people in the town.
"But all those things have closed and there's just not the kids in the town."
Paul said both Oatlands and Swansea had about the minimum number of players needed to field a team, but nowhere near the 35-player list needed to cover for injuries and unavailability.
He said impending Midlands Highway roadworks and the loss of players to other sports had also been factors in a lack of player numbers, but remained hopeful of returning to the competition in 2021.
"We are staying affiliated because there is hope it will get back up - we've just got to hope," Paul said.
"Unfortunately with most country football clubs once they disappear the first time they very rarely get back."
Oatlands finished third before exiting in the first round of finals last season while Swansea finished second-bottom with four wins.
AFL Tasmania community football manager Andrew Dykes said a lack of player numbers was an issue statewide.
"As with any club going into recess it's disappointing to hear that two clubs won't be playing this season in the Oatlands competition," he said.
"That said I think it's just a sign of the times where there are some challenges on the number of players available to field our senior football teams and that's a statewide issue which we're trying to tackle on a daily basis.
"Having spoken to the people in the clubs and also the association there's strong optimism that they'll get back on the park in 2021, but there's a bit of work to be done for that to happen.
"In some of these country areas the population is declining. That's just reality with people moving away for various reasons - lifestyle choices, for work and other things, which puts a strain on the football clubs and those smaller country towns on a weekly basis. That's what happened to Oatlands and Swansea."
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