Tesco is inviting sheep farmers to take part in a trail for a new cost of production model.
The retailer has asked 100 farmers from its supply base to take part in the trial, which would represent the first such model from a major UK supermarket.
The scheme will see data collected over a 12-month period to assess production costs across different systems. This will be collected by independent consultants, who will also pick the initial trial group. During the trial, farmers will be paid based on historic industry cost of production data.
Tesco commercial director for fresh food Matt Simister said: "Tesco has a long history of supporting UK agriculture and we recognise the quality, expertise and commitment of British lamb farmers to provide the best possible produce for customers.
"We work hard to have an open and transparent dialogue with all of our farmers and producers of British lamb, as well as the wider farming community, so that together we can deliver a truly sustainable farming industry."
The scheme will include a provision for young farmers, with 25 per cent of the group representing farmers under 35. Applications must be submitted by February 26 and there are a number of criteria farmers must meet to be eligible.
The launch of the trial comes with some experts holding a more optimistic view of the year ahead compared to 2015. Last week Farmers Guardian reported claims by Phil Stocker, chief executive of the National Sheep Association, there was growing optimism within the industry.