The potential could be closer to reality as Grow SA this week confirmed "one or two large operators" from Virginia are looking to relocate. The organisation plans to establish a Mount Gambier office next month.

Distance from markets has previously been seen as an impediment to developing the industry, which may also have been an accidental casualty of policy changes at state and federal levels. Observers say a big grower relocating from Virginia would bring knowledge and systems with them that other farmers looking to diversify could tap into and share.

The owner of the former Mount Schank Meatworks, Rob Spehr, wants to see the site converted into a cold storage facility for vegetables and seafood.

Mr Spehr quit dairying last year and has successfully grown trial plots of peas, brassicas and lettuce.

He says the loss of the Howard Government's Regional Partnerships program means there is a lack of funding sources for entrepreneurial projects. However the Rudd Government replaced it with Regional Development Australia, which merged with state regional development boards. LCRDA chief executive Grant King says it is "early days" as far as the Federal Government is concerned.

"There clearly is an opportunity to develop the (horticulture) industry," Mr King said. "It needs someone to come in and be a driver."

Mr King conceded the shift in PIRSA away from providing free extension support had limited the technical advice available to growers like Mr Spehr.

But he said Mr Spehr has received assistance in the past to develop a business plan for a proposed milk processing facility at the Mount Schank site.

* Full report in Stock Journal, March 18 issue.