According to wikipedia, the government created this law at the same time it created the Potato Marketing Corporation to regulate the supply of potatoes in Australia as part of a potato management campaign that seems to have started in the aftermath of the Great Depression. The Corporation was abolished in 2016 even if that law somehow outlived it by a few years. Perhaps we’ll find out whether or not that was a good idea when food some day becomes scarce again.

50kg is (roughly) one standard gunny sack, which I guess they decided was enough for ordinary household purposes.

These are the types of laws that appear when you continue to let companies bribe government