Although the compulsory electronic identification (EID) of sheep has been condemned and resented by most sheep farmers, the technology has been widely adopted by progressive dairy farmers and some beef farmers.

The better information is managed, the easier it is to reduce waste and costs and increase productivity and efficiency.

Dairy calves can now be reared on machines that identify them from an electronic transponder fitted to a collar, and then mixes the appropriate amount of warm, milk substitute for them to suckle. By programming the machine you can adjust the daily milk allowance to increase as the calve grows, and then decrease in the build-up to weaning. Not only does such an automated system allow individually precise rations, it also helps to reduce the workload.

Once those calves have matured and entered the milking herd, they can have bigger collars fitted with transponders that revolutionise dairy cow management. Automated milking systems using robots, linked to automated feed programmes, can not only make herd management easier, but also improve the herd health, milk output and general animal welfare.

A computer in the farm office identifies each cow by its transponder and records milk yields at each milking and instructs an automatic feed dispenser to allocate an appropriate ration of concentrated feed. The computer will alert the farmer or dairyman if something unusual is recorded, prompting him to check the animal. The system can also check the conductivity of the milk to monitor the possibility of mastitis - the higher the conductivity the more likelihood of the disease.

Systems have been developed that monitor the vital signs and activity of the cow, logging its movements day and night through the transponder. A change in activity compared to the norm shows that she is coming in heat. Incredibly, such electronic systems are better at identifying when cows are in peak heat than skilled stockmen. That's important in order to get more cows in-calf when using artificial insemination.

The preferred method of EID in beef cattle and sheep is to use ear-tags with a transmitter fitted in a central plastic button.

Few UK beef farmers operate on a scale large enough to justify investment in harnessing EID to improve their efficiency.

Some large-scale operators in the UK are adopting the technology that records the individual animal identity, when it came onto the farm, where it was sourced, its weight and price. Subsequent information can include any injections or doses and their withdrawal dates, which the system flags up each time the animal is handled until it is clear to sell it.

With regular weighing, the system can calculate daily live-weight gain figures and how animals are settling into the system. More importantly, it highlights those that are not performing and costing money. That saves considerable amounts of money by not feeding cattle that need to be sold.

As I said, most sheep farmers reckon that sheep EID is a waste of time and money, but some of the more enlightened breeders are embracing it.

Properly set up, electronic systems could feed information back from the abattoir to the farm office to identify the dams of the fastest growing lambs, or those with better carcase conformation. That would help farmers establish an elite breeding group of ewes.

I have always believed that there is scope for the Scottish Government to take a leaf out of the book of other EU member states and subsidise the introduction of such technology.

Sheep farmers across Wales are to benefit from nearly £1m of European and Welsh Government support to embrace EID. The pilot project will seek to remove some of the barriers known to prevent farmers from using technology and will help them meet the costs associated with adopting it.

The aim is to help farmers integrate technologies into their everyday farming practices, and by doing so, drive up efficiency and improve business performance.