There is no yes or no answer. When asking this take everything into account. It does have potential to be cruel depending on the method of feeding and/or depending on the actions for the person in charge of allowing it to happen. This topic is very highly debatable and I am answering this based on my own views while I take many things into consideration.
Live prey is the one that will clash with “cruelty” subjects, whereas Frozen Thawed and/or Fresh Dispatched, not so much. F/T and F/D should be sourced from reputable breeders who do right by their animals. Do not fund anyone who is cruel, negligent to their feeders or breeders. All animals, regardless of being bred as a feeder, breeder or carnivorous pet, all life is equal and all are deserving of life free from unnecessary suffering. As long as the live prey feeding is monitored and the person knows what they are doing, respects the animals and knows when to step in and swiftly dispatch an animal, then live feeding in my view, should not be considered “cruel.” (But again, that is entirely my opinion.)
The Issue with Live Prey…
In order to feed live prey, you need to be sure that you have a ferret who is capable of being a good and accurate hunter. Ferrets being born natural predators, may not necessarily have the ability to actually “hunt”…. cleanly. Especially if they were born and fed a diet of dry biscuit their entire lives. Going from the dry diet, to a full live meal isn’t a good idea to jump on. The hunting must be taught through experience. Even the best hunters have their slip ups…
Unfortunately THIS is what clashes with the “cruelty” claims and THIS is why many look down on live prey feeding. If ferret is not taught to hunt, or the ferret has a slip up the ferret may induce unintentional suffering from a dodgy kill. If the ferret knows what it is doing would be less likely to make a dodgy kill, however the risk is still there.
The ferret should efficiently and swiftly dispatch the animal within seconds with a clean bite to the neck. (Their canines basically snap the neck with a swift bite and shake motion.) Not all ferrets make good or appropriate hunters. So if it is known that a ferret cannot cleanly dispatch the animal then the ferret should NOT be be fed live prey.
The best way to teach and get ferrets good at hunting would be to use frozen thawed or even better, freshly dispatched animals. Freshly dispatched animals still smell fresh and still seem “alive.” This can fool the ferret into thinking the animal is alive when we isn’t and get their natural instinct operating as it should. Mice are the preferred choice of live prey as they are the most easiest to dispatch for ferrets. Dangling a freshly dispatched mouse is a great way for ferrets to get into action. Just be sure to tie it to a piece of string if you wish to avoid being unintentionally nipped or bitten in the process. You can attempt teaching a ferret straight from live prey, but that is the riskier side of live feeding.
It is up to you, but make sure what you do is ethical, let alone legal.