Drought Minister David Littleproud has called for shoppers to boycott Coles over what he calls the supermarket's "low act" of failing to pass on a levy for struggling dairy farmers.

Coles last week agreed to pay dairy cooperative Norco $5.25 million after the consumer watchdog accused the company of not fully passing on a 10-cent drought levy on milk to farmers.

Coles will pay farmers $5.25 million for failing to pass on a 10¢-a-litre milk levy. Credit:Louie Douvis

Mr Littleproud called for shoppers to boycott the grocery giant until it put a 20-cent levy on all dairy products.

"They told their customers they were helping farmers, then tried keeping the money," he said on Sunday.