The National Sheep Association and the Livestock Auctioneers' Association have voiced their deep concerns for sheep producers following a very difficult meeting between Defra officials and the EU Commission on the issue of the UK derogation on double tagging.

The UK, which has the largest sheep flock in the EU, has derogation from the double tagging regime operating throughout most of Europe that is due to expire on June 30.

The meeting was held in Brussels on Monday. Defra officials, who have supported the industry's desire to keep the derogation, presented the action plan that had been jointly drawn up with representatives from the sheep industry in an effort to rectify some of the failings shown up by the recent EU inspection.The final written outcome of that meeting is still awaited.

However, the Commission advised Defra that it was very unlikely to grant a further extension to the derogation given the negative findings of the latest inspection report.

Due to the extensive nature of sheep farming in Scotland the derogation from double tagging is essential and losing it will cost the sheep industry £20m every year.

NSA chief executive Peter Morris said: "It would appear that the battle is being lost. My feeling is that it will only be political intervention at a ministerial level that can swing things in our favour now."

LAA executive secretary Chris Dodds commented: "The necessary changes to our current tagging system must be implemented in a way that does not restrict and damage the competitive marketing system that we have in the UK."