Plans to establish the Welsh Meat Company failed

It was feared that the latest idea to help the struggling livestock industry had been lost after controversial plans to set up a public limited company buying and processing animals failed to attract enough farmers as investors.

However, a new 500-member farmers' co-operative will now build meat processing plants at Horeb in Ceredigion and at Caernarfon in Gwynedd.

The co-operative will team up with two of Wales's leading abattoirs - Oriel Jones at Llanybydder and Cwmni Cig Arfon in Caernarfon - and is being backed by the National Assembly for Wales.

The new plants will process the cheaper cuts of lamb and beef into higher value products like sausages and burgers.

Too few shareholders

This will give farmers a better return for their livestock.

In July, Assembly First Secretary Rhodri Morgan expressed his disappointment at the poor take-up of the scheme to get the Welsh Meat Company off the ground.

Just 700 of Wales's 17,000 farmers were prepared to contribute the �250 needed to launch the company.

The scheme required 1,000 shareholders to start up.