Badger culls should be part of a "holistic" approach to tackling bovine tuberculosis (TB) in Wales, according to Assembly Members.
Bovine TB damages the animal's lungs and leads to death
There was a "real link" between TB in cattle and the disease in wildlife, said the report.
But the RSPCA said a cull would make no meaningful contribution to the problem.
Although broadly welcoming the report, the Badger Trust Cymru said a cull would have "no scientific validity and will serve no useful purpose".
The report into controlling the disease in cattle was undertaken by the assembly's rural development sub committee.
Their findings concluded that only a combination of increased on-farm biosecurity, the control of TB in the wildlife population and the accurate identification of reactors would control the disease.
Animals who test positive as a bovine TB reactor means they may have come into contact with the disease and under government rules, these cattle must be shot.
Annual testing of cattle was one of the recommendations made in the report, and the report also stressed the importance of farmers and wildlife groups "taking ownership" of the problem.
The committee urged the assembly government to review the extent of its powers and if more were needed to implement their recommended approach to tackling bovine TB, they should seek them urgently.
There are suggestions badgers spread TB to cattle
Alun Davies, chair of the sub-committee, said previous policies used to bring the disease under control had failed to stop its spread.
"There is a real link between bovine TB in cattle and the disease in wildlife," he said.
"At present we are simply not convinced that we have the tools available at our disposal to either control or eliminate the disease.
"It is clear the assembly government will need to make substantial investments in the animal disease control and biosecurity infrastructure in Wales."
The sub committee's report comes in the wake of advice from the UK government's chief scientist Sir David King who claimed in October that killing badgers could help prevent the spread of bovine TB.
The disease can take years to develop and damages the animal's lungs, eventually leading to death.
But in its Back Off Badgers campaign, the RSPCA said the advice to cull badgers went against the conclusions of the government-appointed Independent Scientific Group (ISG).
The ISG's study suggested badgers played a role in the spread of bovine TB, but warned that culling would have to be so extensive it would be uneconomical.
Mike Sharratt, for Badger Trust Cymru, said: "Killing badgers in one area, that is not randomly selected and has no scientific control with which to compare the results, will have no scientific validity.
"The science clearly shows that badgers' small role in this disease occurs when they are in farm buildings looking for food.
"Better cattle testing and excluding badgers from farm buildings is a win-win solution and we hope that the assembly government has the wisdom to implement it," he added.