Tail docking is a standard practice on farms. The reason given for this is to help reduce the incidence of fly strike (as described in Mulesing). As in the case of Mulesing, this is an unnecessary mutilation of the lambs with sheep being able to live a perfectly healthy life with their tails intact.
According to the Code of Accepted Farming Practice for the Welfare of Sheep (Agriculture Victoria) tail docking should be performed on lambs as early as management practices will allow, preferably between 2 and 12 weeks. Disregarding any pain they may feel, the acceptable methods of tail docking, without anaesthesia, are: cutting with a sharp knife, applying rubber rings or using a gas flame heated scarring iron.