A HORTICULTURE ombudsman would help farmers work together and act as a watchdog for unfair practices, particularly by supermarkets, according to independent Senator Nick Xenophon.

Senator Xenophon told last week's AusVeg national convention of his backing for an ombudsman "with real teeth" who could stamp out unreasonable practices by retailers and ensure farmers were given a fair go.

Senator Xenophon also criticised labelling laws, market domination by Woolworths and Coles, the growing percentage of food imports, and the Federal Government's failure to address food security issues.

"There is no doubt in my mind that the vast majority of consumers want to buy Australian," Senator Xenophon told more than 500 convention delegates on the Gold Coast.

"The problem is our current labelling laws are stacked against them, and in turn they are stacked against many of you."

Senator Xenophon said the laws allowed members of the Australian Food and Grocery Council, which represents numerous foreign-owned companies, to import cheaper, inferior foreign food and confuse consumers into thinking they were buying Australian.

But he said there was mounting pressure for Coles and Woolworths to be made to adhere to the Horticulture Code of Conduct, which they "wiggled out of" before it was brought in three years ago.

Mr Burke said the Government was committed to providing "a fair and transparent system" for growers, wholesalers and retailers in horticulture.

Last month's federal Budget included $2 million to centralise the dispute resolution procedures for the Horticulture Code of Conduct.

Coles spokesman Jim Cooper said the company supported clear product labelling to help customers make informed choices.

Mr Cooper said 96 per cent of the fresh produce sold by Coles was Australian-grown.

"In the 2009 financial year, we bought $2.7 billion worth of fresh produce from Victorian suppliers, including $582 million worth of fruit and vegetables," he said.

"Over 80 per cent of our housebrand range is Australian."

Woolworths and the AFGC did not respond to a request for comment by deadline.