A review of the national fallen stock scheme and the company that administers it has found huge disparities in the prices charged to farmers, a lack of competition in some areas and reluctance by collectors to invest in their business.
The report, written for DEFRA by Bob Bansback, a former strategy director at the Meat and Livestock Commission, found that enforcing the burial ban is most difficult in the sheep sector.
On top of the remote location of many sheep farms and the seasonality of the industry, enforcement is made more difficult because many producers simply do not accept the burial ban.
For a typical English lowland sheep breeding flock, the cost of compliance is equivalent to about 64% of the enterprise net margin.
The report also details the huge variation in costs depending on the region of the UK.
Reasons include a lack of collectors in some areas, excessive enforcement of planning and environmental legislation, and general uncertainty about the future, which discourages investment.
Above all, it says, higher fuel prices and the Waste Incineration Directive are driving up costs.
The north west has seen the largest percentage rise in collection charges since the scheme began, rising by 83% compared with a national average of 49%.
But in real terms the region is one of the more reasonably priced in the country.
Scotland is the cheapest area to dispose of dead cattle, while farmers in Northern Ireland pay the least for sheep, lamb, pig and poultry collection.
In all cases, the south east is the most expensive.
The average cost of disposing of a dead cow in Scotland is £54 compared with £99 in the south east.
Most alarming is the huge disparity charged for collecting dead lambs, which is 2200% higher in the south east than in Northern Ireland.
Measures recommended in the report include implementing best practice from other EU states.