Dairy farmers have called for a 10-cent-a-litre levy on all milk sales to help farmers battling drought, after Australia’s major supermarkets announced a price hike on some home-branded products.

Coles and Woolworths have announced a temporary levy on their three-litre generic milk, raising the price from $3 to $3.30, with the extra money given to drought-stricken producers.

Woolworths’ levy will apply until mid-October, when it plans to introduce a special drought relief range of milk at $1.10 per litre in Queensland, NSW, ACT and Victoria, with funds going to farmers in those states.

Coles will increase the price of its 3-litre branded milk until the end of the year.

But Queensland Dairyfarmers Organisation president Brian Tessman wants the levy applied to all milk.

“This won’t help much, this is just a flash in the pan,” Mr Tessman told 3AW radio.

“We need to give farmers more bargaining power and help them get a fair return out of the market so they aren’t going cap-in-hand to processors and retailers.”

Australian Dairy Farmers president Terry Richardson also called for the extra 10 cents to be distributed to all dairy farmers.

He said drought-relief milk is a temporary measure rather than a cure, with an end to heavily-discounted dairy products the way to provide long-term relief.

“You can’t justify a situation where a litre of milk is being sold on supermarket shelves for less than a litre of water and this must practice must stop,” Mr Richardson said.

Woolworths says money raised will go to its supplier, Parmalat, which will then distribute it on a monthly basis among the farmers with whom it works.

Agriculture Minister David Littleproud confirmed the levy would not be applied to all home brand milk sold by the supermarket giants.

“The customer will decide. It’s not a perfect step but it’s a first step,” Mr Littleproud told Sky News.

He said he was rapt the major retailers had come to the party after lobbying them to act three weeks ago.

Prime Minister Scott Morrison was lukewarm on the levy when the idea was first floated earlier in the month.

“I don’t want to see people paying any more for milk and I don’t want to see dairy farmers getting ripped off,” Mr Morrison said at the time.