AUSTRALIA'S peak agent-representative body has slammed Victoria for forging ahead with radio frequency identification.

Australian Livestock and Property Agents Association chief executive officer Andy Madigan said the implementation of RFID technology at select Victorian yards would not enhance sheep traceability nationally and producers would be left to pick up the tab.

"Victoria seems to be breaking away from the national approach and wanting to enforce RFID on producers and the rest of the industry," Mr Madigan said. "The national livestock identification system is meant to be a national system, not a state livestock identification scheme."

Applications are open to Victorian saleyards wishing to install RFID technology with state funding and producers are being urged to adopt the system or be left behind.

But, according to NSW Department of Primary Industry estimates, RFID could cost producers 6 per cent of their gross margin.

Ongoing annual costs to enhance the current NLIS (based on visually read tags) were estimated at $10.3 million for sheep and $1.97 million for goats, compared with $87 million for sheep and $5.8 million for goats to implement an RFID system, Mr Madigan said.

This cost could be reduced to $40 million and $3.3 million per year if national pricing of the electronic tags applied - Allflex will supply tags in Victoria at 90c - but cost would likely still rest with the producer.

ALPA supported the introduction of a simple, cost-effective, transparent and fully traceable scheme that would meet all state and national requirements, he said.

"Arguably the most important purpose of the NLIS is to help underpin the integrity of Australia's sheep and goat products by upholding our reputation as the number one country in the world for food safety and traceability.

"(But) RFID does not automatically give us that certainty as some are trying to peddle; it is not the silver bullet for traceability."

This comes as Europe moves towards a voluntary electronic identification scheme for cattle. EID is already used in the EU for sheep, goats, horses and pets.

European Commission health and consumer policy commissioner John Dalli said the move would "reinforce the safety of the food chain in the EU".

JBS Australia livestock manager Steve Chapman said traceability and animal welfare were among the top priorities for many export customers.

He said it was a matter of time before the EU began demanding electronic identification of Australian lamb and such a system would assist exporters in luring new customers.

Sheep Council of Australia president Kate Joseph said electronic identification in sheep was unnecessary and would not necessarily help open export markets.