The Department of Agriculture has rejected a demand from the Egyptian authorities that Ireland build a £5 million beef-processing factory in Egypt to process live cattle imported from Ireland.
The building of the factory was seen as too high a price for the resumption of the live trade with Egypt which was worth £65 million last year and at its height in 1995 was worth £140 million.
However, it emerged last night that the Department and the industry is prepared to fund the installation of machinery in Egyptian slaughterhouses which will remove so-called "risk" materials from cattle.
The Department is also committed to helping the Egyptians provide incinerator equipment to help destroy these specified risk materials which include the spinal cord, brain and other material which might be subject to BSE infection.
Although no accurate figure was available last night, it is thought the provision of the equipment, support for incineration and training Egyptian staff to remove the materials involved, could cost in the region of £500,000.
A veterinary team is to attend meetings on Monday in Cairo to finalise the technical details of the deal. The meetings are expected to lead to the resumption of live trade with Egypt this autumn.
The Egyptians banned the import of live cattle from Ireland last December as a result of climbing BSE rates in the Irish herd but last May agreement in principle was reached on resuming the trade in bullocks under 30 months old.
Yesterday, the Irish Farmers Association met the Minister for Agriculture, Mr Walsh, to express its disappointment at the delay. Mr Walsh said he was optimistic that trade would be resumed within weeks but Mr John Donnelly, the IFA president, said the lack of outlet for live animals was depressing cattle prices.
There was also a discussion on the lack of access to the EU markets since Pandoro Shipping Line imposed a ban on carrying livestock for slaughter on its boats.
The live trade is expected to bring forward a proposal to lease its own vessel for the trade. Mr Donnelly said the Minister had promised to seek support at Cabinet and EU level for this alternative. However, a Department spokesman said last night that the Minister had made it clear to the delegation he was not in the shipping business and he would look at the proposals brought forward to him by those involved.
Mr Donnelly said other matters discussed included the recent cuts in export refunds which had made Irish produce less competitive in third-country markets and the operation of EU intervention.
Mr Raymond O'Malley, of the IFA's livestock committee, said there were one million animals to be disposed of before next spring and it was important that outlets be found for them.