A PROPOSAL to set up a Tasmanian co-operative similar to New Zealand's Fonterra is a step closer, with work on a full feasibility study about to start.
KPMG put forward what it now calls BigCow Tasmania, an incorporated company, at last year's TasInvest Summit.
"It's a Tasmanian Fonterra, really, and that keeps the value in the state," Mr Rees said.
But he said it would be smaller than New Zealand's Fonterra.
"Its only a third of the size of what they are doing in NZ, only a third of the size of the largest one in the south island."
The company was currently developing an "information memorandum", which would be used to raise seed funding for the full feasibility study.
Parcels of shares valued at $50,000 would be offered to prospective investors.
Once sufficient seed funding was collected, the project would go to a full feasibility -- which should take between six and nine months.
The co-operative would offer four to five different types of shares, depending on what involvement the farmer wanted and the level of capital they wished to put in, or income sought.
"What we will do during the full feasibility work is talk to farmers as to what type of interest they have and design the co-operative around that."
The initial proposal suggested the $1.1 billion project would have 160,000 head of cattle and a $215 million milk-processing plant.
"We are also seeking expressions of interest from farmers who would like to be involved in the co-operative, what amount of land they would like to re-purpose for the co-operative -- there is no sale of land, this is a re-purposing model."
Mr Rees said he'd had extensive discussions with DairyTas, the Tasmanian Farmers and Graziers Association (TFGA) and development organisations in the state's midlands.
The government was also "very supportive" of the project.
"I would say the general view is this is 'do-able'," Mr Rees said.
"There are always barriers but I haven't -- in those discussions -- found any brick walls which can't be overcome.
"It is a top down application -- if we are going to attract investment from pension funds, half a billion to a billion dollars is the type of project they are interested in.
"If it is a billion dollar plan, that's 160,00 cows on 84,000 hectares of land."
Under the plan, milk would be processed into high value powder or nutritional supplements.
"We need to keep it in the value chain and not give it away."
Expressions of interest for those wanting to put in seed funding would open within the month.
They would be open for a month and it would then take about six to nine months to develop the feasibility study.
"People have a different appetite for risk, some don't want to milk cows, so they can take shares in the co-operative.
"It's asking to be in a lease, with the co-operative developing the land."
DairyTas chief executive Mark Smith said the proposal was in its early feasibility stages and a lot of work still needed to be done.
"The plan does have merit from the point of view of an integrated approach to supplying a market with a Tasmanian-branded product that farmers can be part of," Mr Smith said.
"There will be challenges around growing the milk supply to cater to all of the processor's demands and it is also important to ensure that all new and existing dairy farms meet the highest standard in environmental sustainability.
"DairyTas will continue to communicate with KPMG as the proposal progresses."
And TFGA dairy council chair Andrew Lester said Big Cow appeared to be a good concept.
"A lot of work still needed to go into it, when I last spoke to him," Mr Lester said.
"But, most definitely, it's a good idea.
"While there is spare space in the state, there would need to be a fairly large expansion to make it viable.
"But it's all a good vision and it would give the industry a goal to aim for, in the future."
The latest Dairy Business of the Year joint winner Grant Archer said: "I think the biggest impediment for the Midlands is getting farmers to look at dairy, they have never seen dairying as an option, or perhaps not thought of it particularly highly.
He said the proposal was a positive idea.
"It's great people are looking at dairy in Tasmania, that's the whole thing, it's pretty buoyant," Mr Archer said.
"Even if something doesn't come out if it, it's still pretty positive that people are looking to get investment into dairy."
