A drought levy on milk brought in by supermarket giants Coles and Woolworths to help drought-affected farmers has been labelled a "con job" by Queensland dairy farmers.

Queensland Dairyfarmers' Organisation had been lobbying for an across-the-board 10 cent per litre levy on the cost of all milk sold in supermarkets, along with guarantees the money would be passed on to struggling dairy farmers.

Sorry, this audio has expired Milk levy a 'con job', dairyfarmers group says

A petition started by the organisation gathered more than 100,000 signatures before Coles and Woolworths announced they would be imposing drought levies on some lines of milk.

Coles announced it would put a 30-cent levy on its own-brand 3-litre bottles of milk, while Woolworths said it would introduce a special drought relief range of 2 and 3-litre bottles of milk, selling for $2.20 and $3.30 respectively.

However, Queensland Dairyfarmers' vice president Matthew Trace said the application of the levy to only some brands of milk meant dairy farmers could expect only an extra half-a-cent to 1 cent per litre, well short of the 10 cents the organisation had been pushing for.

Drawing consumers away from branded milk

But he said what was worse was that the selective application of the levy could draw some customers currently buying branded milk to the cheaper drought milk.

"It's actually a little bit of a trick, I think, because they're not really on board [with the drought levy] unfortunately," Mr Trace told the ABC.

"What's really happened is they've done a bit of a con job on the public and they've put the levy on a small volume … of milk, only on a couple of lines.

Woolworths is introducing a special drought relief milk range, lifting the price of its milk by 10 cents a litre. ( ABC Rural: Kim Honan )

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"So, rather than 10 cents-a-litre across all milk, which is a modest increase but that's what we proposed, and across all milk that would make a big difference.

"But just across a couple of special little lines may mean only half-a-cent to 1 cent a litre average increase for a farmer, which is just not going to cut it.

"The farmers are absolutely devastated because they realise there's been a con job on the public and, of course, the public support it and Coles and Woolies have just abused that trust, really, of their customers.

"I know farmers that have had real estate agents out today because they just think this is our best chance to fix the mess in this industry, and they feel it's gone now.

"They don't know how we can get the message across that this is a con job and it hasn't solved the problem."

Levy 'not intended to solve structural issues'

Asked to respond to Mr Trace's comments, Woolworths referred the ABC to its initial press release on the levy and said the drought levy was never intended to solve structural issues within the dairy industry.

"This move is about easing some of the immediate pressure brought on by drought, while government and industry work through the long-term reform agenda needed to ensure future generations of dairy farmers can prosper," Woolworths fresh food director Paul Harker said in the release.

In a statement responding to Mr Trace's comments, Coles said 100 per cent of the levy on its 3-litre milk would go to dairy farmers.

It said the supermarket had also backed a decision by Norco, which supplies its own-brand milk in Queensland and northern NSW, to increase its farm gate price for farmers by 5 cents per litre.

"With the generous help of our customers, we've already committed almost $12 million to drought relief, including $5 million from the Coles Nurture Fund, to assist drought-affected farmers," the statement read.