Raided: Agent X made a fortune from NLIS tags

The agent, who Stock & Land has been asked not to name while the investigation is underway, is alleged to have misused National Livestock Identification System (NLIS) tags and falsified paperwork.

An Agriculture Victoria spokesperson confirmed the investigation was underway and said it was important to safeguard Australia's reputation with trading partners and biosecurity.

"Agriculture Victoria is currently investigating a matter regarding alleged NLIS offences," the spokesperson said.

"As this is an active investigation, it would be inappropriate to comment further at this time."

Producers are required to identify livestock with NLIS tags, record livestock movements on the NLIS database and ensure that an accurate and complete National Vendor Declaration is completed when livestock move off their property.

It is understood that rather than collecting commission, the agent had bought dairy heifers from farmers in advance of shipments being publicly announced, replaced their ear tags with his own and falsified the declarations to sell them for export without meeting all the necessary ownership conditions, in breach of the China protocol.

It was, said another livestock agent who preferred to remain anonymous, an open secret for many years.

"It's earned him millions over maybe a decade," the agent said.

"Everyone's hoping that they really throw the book at him and stop this from happening again."

The maximum penalty for NLIS offences is 60 penalty units, which equates to $9913 per offence.

Agriculture Victoria said charges laid under the Livestock Disease Control Act 1994 could be per offence for each animal or a group of the same offences may be rolled up into a single charge.

"All regulatory options available will be determined at the conclusion of the investigation," the Agriculture Victoria spokesperson said.

The agent under investigation declined to comment on the circumstances surrounding the raids or alleged offences.

Agriculture Victoria said the West Gippsland case was not connected to another investigation reviewing ear-tag related "traceability issues".

In that case, a 'halt order' prevented 5000 dairy heifers destined for export to China from being loaded onto a ship at Portland in August.

The dairy heifer export market is a big one.

According to Dairy Australia, 102,045 head were exported in the 12 months up to September, an increase of 94 per cent on last year.

It's one that dairy farmers can scarcely afford to lose, according to Dairy Connect chief executive Shaughn Morgan.

"It's helped farmers get through a very bad environment - the bushfires, the ongoing drought, the lack of water - it's been a backstop for farmers who have been able to use it in a strategic way to ensure they are able to continue in the dairy industry," Mr Morgan said.

"It would be devastating if this was to be imperilled by the actions of one individual."

Australian Livestock Exporters' Council chief executive officer Mark Harvey-Sutton said it was vital to keep scrupulous livestock records.

"If our systems are not adhered to, it can put the whole market at risk so it's incredibly important people maintain their integrity," he said.

"It comes down to biosecurity and clear transparency in trading so people get what they paid for."

Victorian Farmers Federation livestock council president Leonard Vallance hoped anyone doing the wrong thing felt "the full force of the law".

"There's no room in the industry for cowboys anymore, those days have gone," he said.