UPDATE: THE federal government is under pressure to phase-out the live export trade, after 21,000 sheep were slaughtered in Pakistan.
Questions have again been raised over the trade after footage emerged of the sheep being brutally culled - with some buried alive - by authorities in Karachi.
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"I explained to him that Australians are distressed to see these acts of cruelty and that I wanted the matter investigated," Ms Gillard said.
Agriculture Minister Joe Ludwig described the cull as a distressing but "isolated incident" that didn't reflect the industry as a whole.
But Labor backbencher Kelvin Thomson rejects this, saying he will push for the establish of an independent office of animal welfare when a Labor caucus working group on live animal exports next meets, hopefully before parliament resumes.
"How many isolated incidents will it take until we know this has to stop?" he said.
Fellow Labor backbencher Darren Cheeseman said he would be encouraging the live animal exports working party to recommend an end to live exports altogether.
Processing animals in Australia and sending boxed meat abroad would protect animals, create jobs and boost the industry, he added.
"I think the best safeguard for Australian animals is to transition away from live animal exports," Mr Cheeseman said in a statement.
"I would support a phased transition away from live exports and, as a member of the Labor Party caucus working group on live animal exports, I will be working with my colleagues to see if we can make something like this work."
Pakistani officials argue the cull was necessary because the sheep were diseased, but this has been denied by the Department of Agriculture, Fisheries and Forestry.
Australia's live export industry has voluntarily suspended shipments of sheep to Pakistan and Bahrain as DAFF carries out an investigation to establish what went wrong.
Prime Minister Julia Gillard told Pakistani president Raja Pervez Ashraf she wants the sheep cull investigated.
"He undertook to investigate the matter. I can't pre-judge or pre-empt that, or say what structures will be used to do that."
"But I was very clear about Australia's concerns, very strong in raising those concerns and very clear that this is something that has distressed the Australian people."
She said she believed the trade was sustainable and the cull in Pakistan was based on a "false claim" which was different to the Indonesian live trade saga last year.
A report aired on ABC's Four Corners on Monday that showed images of Australian sheep being culled in Pakistan has raised questions over the future of the trade.
While industry says animal-welfare scheme the Export Chain Supply Assurance System is working, others claim it has failed.
Four Corners showed footage of Australian sheep being killed in a Pakistani feedlot where some animals were left alive after having their throats cut. Others were pulled out alive from a pit of dead sheep.
The sheep had ended up in Pakistan after they were rejected from Bahrain on animal-health concerns, which were also given as the reason for the cull in Pakistan.
But testing by independent UK labs proved the sheep were clean.
Agriculture Minister Joe Ludwig said he continued to back the trade.
"There are some in the community who simply do not want this trade to continue, regardless of the (animal welfare) steps we take," he said.
"I am not one of them. This Government will continue to support the live export trade and all those who rely on it."
Ruralco southern operations manager Rob Bolton of Bendigo said the images on the sheep cull were "bloody disgraceful".
"Unfortunately, ESCAS has failed dismally and the whole episode is a debacle," Mr Bolton said. "Everyone who is involved in animal husbandry would be devastated by what they saw on Four Corners."
And Mr Bolton, who has traded many sheep to the live export trade in his years as a stock agent, said the trade was now under "severe pressure".
He said everyone in the supply chain had been "let down" by the incident in Pakistan.
Booligal NSW farmer Helen Rogers said the sheep industry needed live exports.
"When there is no live sheep trade, there is no floor in the market," Mrs Rogers said.
"We can't process all the sheep here in Australia and other countries simply can't cope with frozen meat - they need fresh meat because there is little refrigeration."
Dergholm sheep farmer Murray Davis said he would continue to sell sheep to the live export trade.
"We have sold a good number of sheep to the trade over a number of years and will keep doing it - economically we need to take the opportunities if the prices are there," Mr Davis said.
Sheepmeat Council of Australia chief executive Ron Cullen said the Four Corners report did not tell the whole story.
"Of course we condemn the cruel and inhumane treatment of the sheep in Pakistan but we are disappointed that the other side of the live export story was not shown," Mr Cullen said.
"In Indonesia, 80 per cent of cows are now stunned before they are slaughtered thanks to the ESCAS work, and all this story was about was to shut down the live export trade."
Mr Cullen said the industry had done an enormous amount of work and would continue to do so on broader issues of animal welfare.
Victorian Farmers Federation livestock group president Ian Feldtmann said the images shown on Four Corners were "distressing", adding: "Any producer condemns that."