The majority of farmers I know (and that's a LOT, considering I am married to one) WILL shoot a dog that is running loose in their flocks. IF they recognise the dog (because farm dogs are buggers for buggering off), they will often try and catch it first, but if they can't get hold of it, then often, they will shoot it. Farmers around here have shot each others dogs because they've escaped and gone into a field of sheep and my husband has shot several dogs in the past for worrying sheep. This is a man who loves dogs and is happy to work with and rehabilitate rescue collies...
Sheep (and other livestock) are an economic commodity for a farmer. Their welfare is paramount to a farmer, because they represent money. They will take steps to protect their livelyhood, and they have every right to do that.
The kennels in this instance are entirely at fault. 4ft fences are not high enough to provide a secure and safe enclosure for most determined dogs, and especially a breed such as the border collie. Mine will happily clear a 4ft fence without effort and without even thinking about it. According to the report, the kennel owner and staff were already well aware that the two dogs could clear the four foot fences in the exercise area and had informed the dogs owners of this fact.
Whether the dogs owner gave permission for the dogs to still be exercised off lead in the paddock or not is irrelevant. The kennel owner and staff were very aware that there was a chance the dogs would escape. The dogs were not in a secure environment and the kennels made the decision to release them to run free in that insecure area. For the dogs own security they should have been kept on lead at all times. They could have easily have been exercised on a very long training line so they could have a decent run around whilst the handler was still in control and possession of the dog at all times. Its common sense. A secure exercise area should have fences of at least 6 foot.
The dogs would not have died by being exercised on a lead for a few weeks. They DID die, because the kennels failed to look after them properly.