A MAJOR new report on Australia's ability to cope with foot and mouth disease has slammed the sheep industries identification scheme.

The report, by former National Water Commissioner Ken Matthews, has now been made public after being kept secret by Agriculture Minister Joe Ludwig.

And in the 11 recommendations made to improve Australia's preparedness to cope with a FMD outbreak, sheep traceability features heavily.

Mr Matthews said the current tracing system for sheep and goats was not up to scratch.

"The review team found that the sheep industry's current mob-based and largely non-electronic systems are not capable of meeting the nationally agreed standards for livestock traceability," he said.

"This is particularly concerning given the role sub-clinically infected sheep may play in moving the disease around the country."

Mr Matthews said traceability was the "next most important control after detection" in a foot and mouth oubreak.

"An effective whole-of-life traceability system for sheep in Australia is urgently neede to ensure adequate response is able to be mounted in the event of an FMD outbreak," he said.

The review team recommended the sheep industry moved towards "satisfactory traceability arrangements", and that options and recommendations be presented to the Primary Industries Ministerial Council within 12 months.

But Sheepmeat Council of Australia chief executive officer Ron Cullen said he did not see the Matthews report as criticism of the current NLIS system.

"The council has long supported the current system of visual tags and paper-based tracking of sheep movements," Mr Cullen said.

"A recent study of NLIS compliance in sheep and goats by NSW Department of Primary Industries shows there was 99 per cent compliance," he said.

"We are currently engaged in the PIMC process looking at the assessment of Radio Frequency Identification Devices and understand that they need to be looked at.

"But compliance tests show there is potential there in the current system."

Sheep identification was one of 11 issues highlighted by the Matthews report which needed to be fixed to improve Australia's ability to deal with a FMD outbreak.

Click here for the 120-page report.