Farmers are researching plans to re-enter the pigmeat processing sector, either in joint ventures with existing processors or through buy-outs.

A group of farmers have come together under the aegis of the Irish Farmers' Association (IFA) and have been discussing plans with Enterprise Ireland for the formation of a farmer co-operative in the sector. They are basing their ideas on the Danish processing industry, which is more than 80 per cent farmer-controlled.

"The Irish price for pigs is 10 per cent behind the UK average in the first half of the year. It's not a sustainable proposition to stay that percentage behind the rest of EU pig prices. There is a feeling producers would be better off if they had more control outside the farm-gate," said Mr James Brady, secretary of the IFA's pigs committee.

According to Mr Brady, farmers are very much at a development stage in their thinking and have not come down in favour of either setting up their own facilities or buying into existing companies. Either option would require substantial farmer investment.

Enterprise Ireland produced a report last year which showed serious over-capacity in processing - some 40 per cent of slaughtering capacity was idle. It warned about high dependence on commodity products and an increasing level of imports and said that if efficiency were not improved, profit margins would be limited.

Because of this excess capacity, which the farmers recognise, and stagnant projected growth in pig production, Enterprise Ireland is not prepared to fund any new processing ventures at this stage.