Taoiseach Brian Cowen has announced an investment of €69 million in the agri-food sector, which he said would create 800 jobs over the next three years.
Mr Cowen announced 15 capital investment projects in the beef and sheep processing sector, saying the grant aid would contribute to an actual investment of about €168 million that would increase net sales and exports by €400 million.
"In providing over €69 million euros in grant assistance, the government would stimulate the necessary investment in the sector to ensure the long-term competitiveness of the industry in Ireland," Mr Cowen said in a statement.
With 97 per cent of the beef and sheep processing sector's output sold on European markets, accounting for over 20 per cent of Ireland's food and drink exports, the investment is a further signal of a focus returning to the export sector.
IFA president Padraig Walshe welcomed the investment but said it must be matched with delivery by the processors of "viable cattle and sheep prices for Irish farmers on a par with prices that pertain across EU markets".
"A modern market driven processing sector will help secure higher value export markets for Irish livestock and create badly needed jobs for the economy. The processing sector must now secure higher returns for livestock farmers," Mr Walshe said.
He said the value of beef and sheepmeat exports stands at €1.9 billion.
In 2008, the Irish livestock sector produced 540,000 tonnes of beef, of which 487,000 tonnes were exported at a value of €1.7 billion.
"Exports to our largest market in the UK topped 260,000 tonnes and a further 220,000 were exported to continental Europe. Sheepmeat production stands at 59,000 tonnes, with exports of 42,000 valued at €170 million."
Mr Walshe called on the Government to immediately announce the allocation of €29 million in unused EU single farm payment funds to sheep producers.
He said there were no obstacles in the way of the Government making this announcement, and that the European Union had cleared the way for such a move last November.
Meat Industry Ireland (MII), the Ibec group representing the beef and lamb processing companies, said it strongly welcomed the announcement.
MII director Cormac Healy said the organisation would work closely with the Department of Agriculture and Enterprise Ireland on the delivery of the important investment package.
"Investment support by Government for the meat processing sector, a traditional indigenous industry, represents good value for money based on the employment supported, the value-added generation and the export earnings contribution of meat processing to the National Economy. Recent studies have shown that one job in eight in the Irish economy is linked to the food and agricultural sectors," he said.
Mr Healy said the Government must deliver funding towards works already carried out under the programme without any delay, given that a "significant level of investment in some projects has already taken place.
Additional reporting: Reuters