Tesco, the UK's largest retailer, has said that it will pay the costs for organic inspection and technical support for new and existing organic dairy farmers in its supply chain for the next three years.

The company said that the move was part of its commitment to develop the sector with an eye to building long-term relationships across the supply chain, encouraging innovation and increasing availability of organic dairy products.

Tesco said that demand for organic dairy products was growing by 45% year-on-year at its store.

Under the scheme, organic dairy producers who are members of OMSCo will receive around GBP400 (US$502.24) per year to cover the cost of organic inspection and technical support.

Nicholas Saphir, executive chairman of OMSCo said: "This announcement is a huge boost for organic dairy producers, and we are delighted that Tesco has chosen to develop this initiative with OMSCo. This significant step will ensure that OMSCo producers will have the confidence to invest in more production to meet the increasing demand from Tesco's customers."

Tesco recently confirmed a long-term supply partnership with Robert Wiseman Dairies bringing organics into line with current standard milk supply, increasing supply chain efficiencies.

Kari Daniels, trading director for chilled food at Tesco said: "Organic milk sales are showing tremendous growth, and in order to secure UK supply for our customers it is essential that we support the next generation of organic dairy producers.

"Although we buy our milk from processors and traditionally have not had a direct relationship with individual farms this payment is one way we can directly support organic farmers and ensure we are working together more closely.

"We will be focusing on innovation and bringing new British products to the market, like our recent launch of 250ml cartons of Organic Milk aimed at lunchboxes."