Ag-Bag International Limited Announces 2001 Year End Results.

Business Editors

WARRENTON, Ore.--(BUSINESS WIRE)--March 15, 2002

Ag-Bag International Limited (OTCBB:AGBG) announced today that net sales for the year ended December 31, 2001 were $28,708,233 compared to $31,451,150 for the same period last year.

Ag-Bag International Limited President and CEO, Larry Inman, stated "Sales for the year were down 8.72% in spite of several positive trends that were starting to be seen towards the latter half of the year. Those positive trends included stabilizing milk prices, continued optimism that milk prices in the U.S. will remain above last year's record low levels through 2002, and continued easing of credit by financial institutions for the farming sector that, coupled with the interest rate reductions of 2001, allowed farmers to be more optimistic and resume capital expenditures and purchase farm equipment. As a percentage of total revenue for 2001, machine sales increased 4% and bag sales decreased 5% in comparison to 2000. The Company also sold ten new composting systems during the year and hopes to have additional system sales during 2002."

Net loss for the year was $164,150, or ($.02) share, compared to net income of $521,814, or $.04 share, for 2000. The decline for the year was the result of lower sales, lower gross profit resulting from competition and product mix sold during the year, coupled with increased selling, administrative, and research expense, partially offset by higher income from the Company's German joint venture and lower interest costs.

                                   2001              2000
                                   ----              ----

Net Sales                     $  28,708,233    $ 31,451,150
Gross Profit from Operations  $   5,760,629    $  6,651,460
Income (loss) from Operations $    (520,593)   $    636,948
Net Income (loss)             $    (164,150)   $    521,814

Basic and diluted net
 income (loss) per
 common share                 $      (.02)     $       .04

Ag-Bag International Limited is headquartered in Warrenton, Oregon with a second major facility located in Blair, Nebraska. The Company manufactures and sells to the international agricultural industry its farm feed management systems, for the high moisture storage of silage and grains, and its composting system, for large scale "in-vessel" composting.

The discussion in this press release contains forward-looking statements that involve risks and uncertainties and various factors that could cause actual results to differ materially from those projected. Forward-looking statements relate to future sales of the Company's products for farming and composting systems. The following factors, among others, could cause actual results to differ from those indicated in the forward-looking statements: timing of demand for bagging machines and bags; reductions in U.S. milk prices; availability of credit in the farming sector; potential purchases of the Company's bagging machines, bags and composting systems; anticipated inventory production; the availability of trade credit and working capital; and the Company's dependence on the dairy industry. Readers are urged, however, to review the factors set forth in reports the Company files from time to time with the Securities and Exchange Commission. Actual results may differ materially from the forward-looking statements.