This comes some months after the NSW parliamentary inquiry into the sustainability of the state's dairy industry released a report recommending that the government immediately establish and fund an independent NSW commissioner for dairy.

“The advocate’s first order of business will be to establish and co-ordinate a fresh milk crisis taskforce, with both industry and government, to identify immediate and necessary actions for the sector," Mr Blair said.

“We will also focus on the long term future of the sector by working with industry to drive demand for NSW milk through a marketing campaign, as well offer fully subsidised course fees for the NSW Dairy Farm Training Program to support the next generation of farmers."

Mr Blair said the industry was in crisis across NSW, with dairy farmers exiting at a rate of 60 per year due to poor prices and challenges such as drought.

“We have become accustomed to paying $1 for a litre for milk but it is worth so much more," he said.

“The simple truth is it costs farmers money to produce milk, It costs processors money to process milk and it costs retailers money to stock milk, yet we’re not paying enough to cover any of these costs and dairy farms across the state are collapsing as a result.

“The situation is dire. When our farmers are no longer able to produce fresh milk and it’s being imported from interstate or overseas, the retail price of milk will skyrocket, leaving supermarkets with an unaffordable product and a reputation permanently tarnished by having destroyed the dairy industry in NSW.

“If irrational milk pricing continues, the future of the industry is in real danger. I am calling on everyone – processors, retailers and consumers – to do their part and stop undervaluing fresh milk in NSW as a matter of urgency."

Labor candidate for Oxley Susan Jenvey said the NSW Liberal/Nationals had "shamelessly stolen" Labor’s policy for a Dairy Advocate.

The cost of the initiative was not included in today's announcement, whereas Ms Jenvey said Labor's proposal had been fully costed by the independent Parliamentary Budget Office.

NSW Labor leader Michael Daley has committed to establishing a dairy and fresh food pricing advocate with a dedicated unit to investigate and report on contracts and prices across the dairy and fresh food supply chain.

This advocate would also work with the sector to find opportunities for collective or co-operative arrangements between producers, processors, wholesalers and big retailers.