One of Britain's leading retailers is to increase the premium it pays to its farmers for their milk.
The Co-operative Group said it would pay producers a total price of 29p per litre.
The announcement comes as farmers across the country held demonstrations last night outside processing plants to protest at the problems in the dairy industry.
Dairy farmers are furious about cuts of up to 2p a litre in the amount they receive from major milk processors and many fear the shortfall will force them out of business.
The action is the latest in a series of protests by farmers who are angry that they are to be paid less for their milk than it costs to produce it.
Steve Murrells, chief executive of Co-operative Food, said: "We have a track record of supporting British farmers, and we recognise the importance of ensuring a long-term, sustainable future for British dairy farmers.
"We have been in continual discussions on this issue with the National Farmers Union and we have listened to their concerns.
"We are taking this action to help alleviate the immediate pressures that farmers within the Co-operative Dairy Group are facing.
"Going forward, we are committed to finding a supply model that is sustainable for the long-term future of our dairy farmers."
Peter Kendall, president of the National Farmers Union, welcomed the move.
He said: "We are encouraged by the positive step taken by The Co-operative today in ensuring that its farmers will be paid a fair price for their milk.
"Their recognition of the real difficulties being faced by British farmers this summer and commitment to support them through these difficult times is to be applauded.
"But whilst this is an important move, all retailers must move to a sustainable funding model for the dairy industry."
:: The premium Co-operative Dairy Group farmers receive will rise to 2.57p per litre with immediate effect and to 4.27p per litre from August 1, following processor reductions.