Coles' latest ploy of imposing steep discounts on fresh produce being sold on its numerous stores could backfire and drive many Australian farmers out of business.

This according to Independent Senator Nick Xenophon, who called on the Australian Competition and Consumer Commission to look into the latest price war among the country's major grocers.

Mr Xenophon is echoing the earlier concerns aired by the Australian Green Party, which criticised Coles and its competitors for resorting to heavy price cuts that over the long haul, the Greens said, would hurt the farming industry.

With Australian farming in shambles, the Greens claimed that much of the disadvantages will be absorbed by general consumers, who may have to contend dwindling food stocks and possibly higher prices in the future.

Coles started on Tuesday big discount offerings on some of its fresh produces, allowing shoppers to get hold of selected fruits and vegetables that come with attractive price cuts of up to 50 per cent.

Analysts view the move as Coles efforts to lure more customers and to speed up the movement of its shelf stocks.

The giant retailer, however, insisted that its new measures will benefit everyone - cheaper products for shoppers and fewer surpluses for farmers, who were likely to sell their products faster.

Coles did not specify though if the new initiative will also improve its sales performance.

On Wednesday, Mr Xenophon argued that the price war among retailers appear to be generating discounts that were superficial.

"If they're not genuine discounts, it forces farmers off the land ... and if it puts the smaller guys out of business, ultimately, consumers will pay more," the senator was reported by the Australian Associated Press as saying.

It is likely too that giant supermarkets have been resorting to misleading promotions to edge out competitors but in the process dupe unsuspecting consumers.

If that is the case, the independent senator said that it's time for the ACCC to step in and put these giant retailers in line.

"We need to make sure the supermarkets are brought within chains of conduct so that there's some fairness across the board," Mr Xenophon said.

The watchdog's intervention is crucial at this time, the senator said, adding that "if we want people to keep farming in Australia, we've got to make sure there's a level playing field."