And it has started formulating a business plan to establish a farmer-owned grocery outlet.

SAFF chief executive Carol Vincent said the organisation wanted to set up the company structure and offer shares to farmers.

The Australian Competition and Consumer Commission has found that Woolworths and Coles share about 60 per cent of fresh groceries sold in Australia while the Nielsen Company's ScanTrack data reports the two major supermarkets sell 78pc of packaged groceries.

Ms Vincent said the statistics were "absolutely criminal" and that something had to be done before the big two players spread their "poisonous tentacles" any further.

In an exclusive interview with Stock Journal, Independent Senator Nick Xenophon said the proposal was "a fantastic initiative," and had the potential for great success with the support of local communities.

"It is absolutely fundamental that something like this happens and this plan has the potential to show up what a poor deal our farmers get from the big chains," he said.

"Australia has the worst concentration of the grocery market anywhere in the western world," he said.

"We have a situation where the major chains have an unacceptable level of market domination and the consequence of this is that it squeezes farmers out of getting fair prices for their produce."

Ms Vincent said the taboo surrounding farmer cooperatives would not stop SAFF's proposal from being successful.

"People seem to think cooperatives are dead and that you can't mention the word because it seems to be dirty - to these people I say 'get with it'".

Minlaton farmer Wayne Krieg has sold his crossbred lambs to Woolworths for the past 20 years.

He believes establishing a farmer cooperative will be "a complete waste of time".

"In theory, it's great but it's been tried before, it has never worked and it won't work in the future," he said.