But local dairy farmers say the only solution is to take tougher action on milk discounting by supermarkets.

Member for Lyne David Gillespie said the major supermarket chains, processors and dairy farmer groups should implement the temporary levy, otherwise he will move to introduce a Private Member's Bill to take immediate action.

“There should be a temporary levy across all milk lines. If they fail to take action, I will introduce a Private Member’s Bill which will seek to introduce the temporary levy along with other measures on the milk processors and the major supermarkets to increase transparency and deliver increased returns to dairy farmers,” Dr Gillespie said.

"Of the top three supermarket chains, Woolworths has been ahead of Coles and Aldi in terms of implementing measures to address the viability of the dairy supply chain, however, it is simply not enough," Dr Gillespie said.

“There are measures I have been discussing with the agriculture minister to fix some of the obvious transparency issues, together with potential measures to improve certainty and greater investment in the dairy industry."

Dr Gillespie said he would invite representatives of the major supermarkets and processors to discuss the matter and seek their support for the 12-month levy across all milk products.

Dairy farmer Leo Cleary said it was certainly a step in the right direction but he is concerned about the temporary part of it. He says the only solution is for supermarkets to stop discounting milk.

He said increased costs have come into the industry because of the drought.  

"Most dairies import 40 per cent of their feed and it's 80 per cent more expensive than it was 18 months ago, so that's one of the biggest problems," said Mr Cleary.

Local seasonal conditions have also been very challenging; it's been very dry which makes pasture growth very difficult, so farmers have to buy more feed than usual.

Mr Cleary acknowledges that the industry in other parts of the state is suffering more than on the North Coast.

"Norco has gone to a lot of trouble to support their farmers.  But we need more than a temporary solution.  I'm pleased that Dr Gillespie wants to do something about it, but 10 cents is not enough," he added.

"It's eight years since Coles brought in the one-dollar milk and we have had big increases in costs, especially electricity," said Sue Cleary.

"Wages have also gone up.  Pipe fittings and milking machine parts have increased in price."

Her husband added that it's concerning that some of the bigger dairy farmers in NSW are giving up.

"The future of milk supply is something to be concerned about," added Mr Cleary.