A Tasmanian farmer who demonstrates milking cows to children, giving them a "squirt" from the udder, has fallen foul of health authorities who have warned he is at risk of losing his business if he does not stop.

Rowen Carter runs the Huon Valley Caravan Park, south of Hobart, which he said is "more than just a caravan park, we are a self-sufficient working farm that wants to teach people where real food comes from".

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He offers paying guests homemade Persian fetta made with raw milk, as well as a taste of raw cow's milk straight from the udder's teat.

"I squirt it in their mouth and then afterwards I appear with some plastic cups and show them the more couth way of tasting the fresh milk ... everybody is amazed at how sweet and how nice it is," Mr Carter said.

But his attempt to provide guests with an "old-fashioned farm experience" has landed him in trouble with the Tasmanian Dairy Industry Authority (TDIA).

Mr Carter denied selling raw milk and insisted his guests freely choose to sample it.

"It's been taken away from us, the right to choose," he said.

"I think people should be allowed to taste it ... they don't have to taste it, it's their choice and it's their choice to let their children have a taste."

Raw milk blamed for death in 2014

The sale of unpasteurised milk products for human consumption is illegal in Australia, however the use of raw milk in various products has continued with some arguing the risks have been overstated.

A Victorian child died in 2014 after drinking a 'bath milk' product. ( ABC News )

Health authorities and experts have warned raw milk poses a health risk, especially to children. A boy died in 2014 after drinking raw milk, marketed as bath milk, labelled as being for "cosmetic use only".

Following the death, it became mandatory a bittering agent be added to raw milk to discourage human consumption.

Food Standards Australia and New Zealand (FSANZ) said raw milk was more likely to contain deadly bacteria like E. coli, salmonella and listeria.

Dairy Tasmania chief executive officer Mark Smith said his organisation backed the standards.

Bruny Island Cheese maker Nick Haddow started making raw milk cheese in Australia in 2011, because he convinced the state regulators that by cooking the curd and maturing his signature raw milk cheese for six months, bacteria was reduced to a safe level.

But Mr Haddow said those who broke the rules did so at their own peril.

"I'm a passionate advocate for raw milk cheese, but there is a right and wrong way to go about it," he said.

Future in doubt after infringement notice

Rowen Carter says the future of his farm home stay business is unclear. ( Supplied: Huon Valley Caravan Park )

Mr Carter said the tasting of the milk straight from the cow was a "highlight of the day" for guests.

"There is always the question 'can we do the milk squirting again tomorrow?'

"Now we have to tell them because it is deemed we are selling the milk, squirting is now no longer.

"How can something that brings so much joy be so wrong?"

Mr Carter asked: "How can a government authority make that decision for you?"

"Is it not a basic human right to be able to choose your food? It has left us wondering if it is all worthwhile or should we even continue with the caravan park as a farm stay?"

The TDIA and Tasmania's Chief Health Officer have been contacted for comment.