Australian Associated Press
Mr Smith's comments follow reports that the supermarket chief pocketed a $15.6 million pay cheque for 2010-11.
The "whopping" pay packet has prompted outrage from Mr Smith, 'Where does this extra money come from?" the former retail electronics king and Australian of the Year asked.
"This salary and most of Coles' increase in profit clearly comes directly from Aussie farmers and Aussie processors, as they are destroyed by this new form of extreme capitalism."
Coles has enjoyed significant sales growth under Mr McLeod, with the group registering a 21 per cent lift in earnings in the last financial year.
Mr McLeod was rewarded with a total salary of $15.6 million for the 12 months to June, including $11 million in bonuses.
But Mr Smith said the flip side of "this greed" would be a crisis in rural areas, with the "country towns boarded up, more rural suicides".
"Aussie farmers are now ploughing in their crops and Aussie processors are sacking workers and closing down because they cannot sell at a price that will even cover their costs because of the huge push by Coles to buy at lower and lower prices," he said in a statement.
"Why keep pushing 'Down, down, prices are down' and putting more and more Aussie farmers and workers on the scrap heap?"
At Christmas time, Mr Smith labelled the chief executives of Australia's big four banks greedy.
Then, last month, he threatened to name and shame rich people who do not contribute to the community, saying if they did not want to open their wallets they could "rack off".
Mr Smith said the rich in the United States, generally, donated 15 per cent of their income, while Australia's wealthy gave less than 1 per cent.
He repeated this call today when he urged Mr McLeod to "give something back".
"Ian McLeod, you've done incredibly well out of Australia ... I look forward to hearing that you are fulfilling your obligation as a wealthy person and have become well known publicly as a major philanthropist."
Click here to read the story on SMH website