This practice is almost exclusive to Australia (with a bit done in New Zealand) and in the Merino sheep breed, as they tend to have more skin around their rump which, when woolly, can become covered in feces, and attracts flies. The flies can be a real problem, laying eggs on the rump of the sheep, which hatch out to maggots that will eat the sheep alive, killing it, this being known as Fly Strike.
Mulesing is the cruel, and cheap, way Australian farmers deal with the problem of fly strike. Crutching is a better alternative but needs to be done yearly. Crutching involves shaving the wool only from that area, prior to shearing the animal later in the year. Tail Docking also helps reduce problems with fly strike.
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What are Mulesing and Crutching
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