Concerns about how the roll-out of mandatory sheep electronic identifications tags was being handled has led to wool's peak body withdrawing its support.
WoolProducers Australia informed state farming organisations of the decision on Tuesday afternoon, signalling they would step back from being involved in the roll-out as two out of three of its caveats for involvement had not been met.
The unmet caveats were that the process established a nationally harmonised traceability system that operated consistently and that an equitable funding arranged was created.
WoolProducers has previously said that sufficient funding had not been provided to help the industry change systems and that the rollout had not been nationally harmonised.
WoolProducers Australia CEO Jo Hall said while the body understood the importance of traceability in the broader context of biosecurity, the caveats had been in their policy of support as they were integral to delivering a successful system.
"This wasn't a kneejerk decision, this has been building over a number of months and we have made our concerns known," she said.
"We have been there for 19 months, hoping to achieve better outcomes and it hasn't happened."
"WoolProducers' support for this initiative was based on a number of contingencies to ensure that the system and shared responsibilities were fair and equitable for woolgrowers and that the required biosecurity outcomes were met, this is currently not the case."
Ms Hall said with eID tags costing around $2 compared to 50 cents for non-eID tags, the cost of the tags alone was significant.
"The investment by producers will be there so if we're not going to achieve a gold standard, truly national system, we can't see the point in committing growers to that when there is an opportunity to really get a robust system in place," she said.
"The costings for the roll-out of this system has been independently estimated to be $830 million over ten years.
"While the funding commitment that has been received to date from state and federal governments is welcomed, it is still a long way short of the required financial assistance."
Ms Hall said that if the government ended up satisfying the requirements for equitable funding and national harmonisation, WoolProducers would recommit to supporting the rollout.
"We are certainly hoping we can have further discussions to achieve what we all want, which is good traceability for the sheep industry in Australia," she said.
"We do have a traceability system in place now, it does work but it could be improved.
"This was the opportunity to improve it and unfortunately, as it's unfolded, we don't think that opportunity has been taken."