Reports that some shearing contractors are paying workers in bundles of cash and drugs have sparked concerns about regulation in the wool industry.

Key points: Australia's shearing workforce is in decline, with the lowest sheep numbers in a century

Australia's shearing workforce is in decline, with the lowest sheep numbers in a century Dozens of workers and industry insiders have told the ABC of increasingly poor conditions in woolsheds

Dozens of workers and industry insiders have told the ABC of increasingly poor conditions in woolsheds Shearers allege some contractors are paying them in cash and drugs

In the early morning, at a remote shed in Victoria's west, Rob Harrowfield drags sheep out of a pen and peels off their fleeces like they're potato skins.

At 193 centimetres, he's a giant of a man and is one of just 3,000 Australians still making a living out of shearing.

"As far as conditions for safety, I think it's worse now than what it used to be ... it's just getting progressively worse," the 57-year-old said.

Rob Harrowfield is one of just 3,000 Australian shearers left in the industry. ( ABC: Charlotte King )

"Not having toilets, not having fresh running water rather than washing in a bucket, not having proper harness holders, not having equipment that [has] safety buttons.

"A lot of places still have the old shaft-driven gear which you can get caught up in.

"If it gets any worse than it is, you'll be shearing out underneath a gum tree."

'A law unto itself'

Sheep numbers are at their lowest point in almost a century and the shearing workforce is in decline.

Dozens of workers and industry insiders have raised concerns with the ABC that the standards for those who remain are going backwards.

Shearers are concerned about declining standards in working conditions. ( Supplied )

"Every other industry's got to pull into line," said Sue Parker from South Australia's remote west.

"Why's the shearing industry a law unto itself?"

Ms Parker spent most of this year on the couch, heavily medicated and unable to move without help.

The 40-year-old said she was dragging a ewe across metal grating in January when it became stuck. As she pulled on the sheep, Ms Parker blew a disc in her lower spine and had to undergo surgery.

Sue Parker was left unable to move by herself after she was injured. ( ABC: Charlotte King )

"I remember feeling a little pain and it sort of shot right down on my leg," she said from her wheelchair at the Royal Adelaide Hospital.

"By the time that night came around, I could hardly walk, and then the next few days I tried pushing on, doing minor stuff, and it just got worse and worse — by the fourth day I couldn't walk at all.

"It's not like it's wear and tear, and that was the bit that annoyed me, I've only been in it for four years.

"It's from something that shouldn't have been there."

Workers kept 'on a leash'

Shearing is among the riskiest occupations in the country.

The latest data from Safe Work Australia states shearers are at least six times more likely to be seriously injured than the average worker.

Casey Barnes was scalped by machinery in a woolshed in 2017. ( Supplied: GoFundMe )

The consequences can be catastrophic; the NSW regulator is preparing to prosecute a case against the operators of a woolshed where a woman was scalped by overhead machinery in 2017.

The ABC understands the woman was doing shed-hand work, rather than shearing, at the time of the accident.

But concerns go beyond physical working conditions.

Mr Harrowfield said some shearing contractors were actively flouting the law and providing workers with drugs as payment.

"So they get a certain amount in wage and a certain amount in drugs," he said.

"They're making money out of it, the contractors, but they're keeping that person basically on a leash, so that if they need things done that most of us won't do — shearing weekends, shearing wet sheep, shearing sheep that should be crotched and aren't crotched — these people will do it because they owe them."

Breaking laws 'at every level'

The Australian Workers Union said that in the past two years it had almost two dozen members report that contractors were making payments in drugs and cash.

The reports had come from South Australia, New South Wales and Victoria.

"We encourage our members, if they find out about that, that they should contact police," said AWU national campaigns director Shane Roulstone.

"It's against the law. It's bad enough paying in cash, let alone cannabis provided as a subsidy to workers."

Several wool workers have told the ABC they also witnessed contractors supplying illicit substances other than cannabis, although Mr Roulstone had no knowledge of that.

The remoteness of woolsheds can make it difficult to regulate shearers' treatment and behaviour. ( ABC: Nathan Morris )

He said the fact that shearers worked in private woolsheds on farmland scattered across the country made the industry difficult to regulate.

"[It's] the remoteness, the small crews, I think [that] allows that to occur," he said.

"We're not saying it's OK, and the AWU doesn't support it in any way shape or form.

"To say we haven't heard about it, that's not the truth. We have heard about it."

Jason Letchford from the Shearing Contractors Association said he had also heard the reports.

"I'm not trying to pass the buck, but I say to the wool grower or the farmer who's engaged that person, what are you thinking there?" he said.

"It's ludicrous. The person engaging them is breaking laws at every level, from workplace health and safety laws, to tax laws, to everything."

Growers group unaware of reports

Ed Storey, the president of grower lobby group Wool Producers Australia, said it was the first time he had heard the allegation.

"Let me be very clear: that has never been raised with Wool Producers before, that contractors are supplying illicit, illegal drugs," he said.

"[I] absolutely, in the strongest possible terms, condemn that practice if that's happening — that's the first I've heard of it."

Mr Storey said "the majority" of woolsheds in Australia were excellent and there was no need for increased regulation or oversight.

Wool Producers Australia is encouraging increased investment in woolsheds. ( Supplied: Chantel McAlister )

"At the end of the day, people work on individual farms, and each farm is run by a different business, so it's a different set of facilities, different framework, shearers at different times of the year.

"While there's always problems, you shouldn't make a whole heap of regulations just to tidy up a small per cent."

He encouraged growers to invest in their woolshed infrastructure.

"Prices have just fallen off their records, but sheep prices are good and wool prices have been good, and it should be an investment priority of farmers and wool growers to present their woolshed and upgrade it."

In a statement, grower-funded industry body Australian Wool Innovation said it was providing funding to the WA Shearing Industry Association to help develop a National Shearing Shed Safety Assessment Program.

'The cheapest quote gets it'

Swan Hill shearing contractor Damian Raudino travels the eastern states each year to oversee teams at around 30 sheep properties.

"I've found the past 18 months to two years, my job just became more difficult than it's ever been over the past 24 years," he said.

"[It's] all being able to find the right staff to do jobs."

He said employers who provided drugs to workers were making the industry increasingly difficult to work in.

Mr Raudino says poor conditions in some woolsheds often come down to saving money. ( Supplied: Chantel McAlister )

"It's not all contractors, it wouldn't even be the majority of contractors, but there are some doing it," he said.

"It's working both ways for some contractors; they're making a bit of money out of it on the side, they're getting their men supplied and they're getting more sheep shorn.

"I suppose it'd be the same as the AFL, or whatever you want to compare it to — it's almost performance-enhancing, isn't it?" he said, referring to the Essendon supplements scandal.

"Everything always comes back to the cost — the cheapest quote gets it.

"The more the shearers are making, the more the contractors are making, the quicker the job's getting done, the cocky [wool grower] is happy."

Watch this story on ABC TV's Landline on Sunday at 12:30pm or on iview.