THE failure of the sheep industry to get its act together when it comes to tracing animals could put its very future at risk.

The industry has had more than enough time to address the flaws in its sheep and goat livestock identification scheme.

Yet a new report commissioned by the Victorian Department of Primary Industries has delivered another damning verdict on its effectiveness.

The PricewaterhouseCoopers report showed that even with the revamped system the industry is considering, only about 80 per cent of sheep could be traced. The latest evidence of the system's flaws follows two European Union audits, which also found it wanting.

Three years ago, the system also failed an exercise designed to test if it could trace sheep back to their property of origin in the case of a disease outbreak.

Yet the industry still remains nowhere near ironing out the system's flaws and delivering producers an effective traceback scheme.

Because of its dependence on paperwork and visual reading of ear tags, the system is fraught with risks and is slow to respond when animals need to be found quickly.

The system's flaws were vividly demonstrated last month when one producer reportedly sent 400 sheep to a processing facility with their NLIS tags in an accompanying plastic bag.

If Australia is unlucky enough to find itself with an outbreak of foot and mouth, or some other horror disease, many experts believe the sheep industry could end up being to blame for the downfall in the entire Australian livestock sector.

Cattle producers have been strangely silent on the issue. Yes, their tracking system has been tested and found to be effective, but electronic tags in ears are not going to prevent cattle getting foot and mouth disease from their woolly cousins.

The sheep industry's deficient traceback system is putting Australia's reputation as a producer of safe meat at risk.

Time is fast running out for the sheep industry to put its house in order before it's too late.