The West Australian reports that the dispute could result in WA refusing to sign up to the new national standards and the State’s Agriculture Minister, Alannah MacTiernan, has called on the Federal Government to establish an independent body to determine the new rules, as recommended by the Productivity Commission last year.

"We are optimistic we can forge a resolution with WA egg producers, but nationally we need to embrace a better process - a more objective process - for establishing livestock welfare standards," she said.

"Consumers want this and it is in industry’s best interest to meet the expectations of consumers."

A Productivity Commission report on the regulation of agriculture released by the Turnbull Government last year said an independent agency was the best way to determine welfare standards, rather than negotiation within the sector.

It said the current process for setting standards for farm animal welfare "does not adequately value the benefits of animal welfare to the community."

"The process for setting standards would be improved through the creation of a statutory agency responsible for developing national farm animal welfare standards using rigorous science and evidence of community values for farm animal welfare," the report said.

A spokesman for Federal Agriculture Minister David Littleproud said standards were a matter for States and Territories, but he "would prefer... a nationally consistent approach."

The new Australian Animal Welfare Standards and Guidelines for Poultry provide nationally consistent rules for the sector, but animal welfare advocates were concerned that the rules would still allow battery cages to be used for for egg-laying chickens.

The RSPCA also claims that the NSW Department of Primary Industries has been colluding with the egg industry to ensure battery cages are not banned under the new national rules.

While the WA Government is not calling for the abolition of battery cages, it believes the stocking density proposed under the new standards is too high.