THERE'S been a cautious reaction to what's been described as a "pre-feasibility" study into opening up Tasmania's Midlands to massive dairy expansion.
International financial firm KPMG put forward what it said was the Big Cow project – involving 160,000 head of cattle and a $215 million milk processing plant – at last week's Tas Invest Summit.
KPMG partner Martin Rees stressed the $1.1 billion project, which would require 76,000 hectares of land, was a "pre-feasibility" study.
"It will demonstrate whether or not there is interest from the investment side in a project of this scale," Mr Rees said.
"What we have is a pre-feasibility study.
"It's not a memorandum of understanding; it's a perspective to show what scale could be done in this State."
KMPG's work showed there was land available and access to the cattle was "certainly possible" but it would need additional water.
About 44,000 megalitres of water would be sourced through the Midlands and South Esk irrigation schemes.
The project comes at a time when businesswoman Gina Rinehart has just announced a deal with the Chinese state-owned China National Machinery Industry Corporation.
That deal is reported to involve thousands of hectares in Queensland's South Burnett region and a processing facility in the Mary Valley.
The farm is expected to be among Australia's biggest, with a planned processing facility producing as much as 30,000 metric tonnes of infant formula per year.
Sources close to the Tasmanian dairy industry, who declined to be named, said the KPMG proposal "raised some eyebrows" when it was announced.
One said it had the potential to cruel future deals with the Chinese while another added it appeared to be "a thought bubble".
Mr Rees said the proposal was developed after it was realised international investment groups would look only at projects which were valued at more than half a billion dollars.
KPMG had spoken with the State Government and the Tasmanian Farmers & Graziers Association (TFGA) to see what they thought of the concept, he said.
But Mr Rees said no talks had been held with DairyTas, which had ambitious plans for the industry.
DairyTas chief executive Mark Smith said it seemed to be a "grand plan" but should possibly be put into practice over the longer term.
"Obviously they are in the early stages of their work and more feasibility studies are needed on the details," he said.
"The project has to fit with Tasmania's capability and strengths."
TFGA chief executive Jan Davis said she would be meeting with KPMG this week.
"It seems they (KPMG) are looking at signing up landowners with existing water rights," she said.
"If there is water, then it is likely that the land would be suitable, as the Tunbridge dairy has shown."