The Prairie Pasta Producers have support from other players in the pasta industry despite falling short of a $5 million fund-raising target during their spring escrow drive, says the group's chairman.

Dave Schnell says the $2.8 million in trust Prairie Pasta raised - pledged by farmers in a short, three-week time span - was enough to convince another Saskatchewan pasta group to sign a memorandum of understanding to work with Prairie Pasta.

Al Dente International Corp. (AIC) of Swift Current, formerly known as Pasta D'Aurum, signed the agreement Monday.

"It simply will allow us to work together now. Naturally we tend to duplicate a bunch of things. They're looking for market share like we are, and we want to work together to do the same thing," Schnell said.

The Swift Current group, whose original goal was to build a $60 million plant in that city, have revamped their name, leadership and structure by transferring share interests to a general partnership. It's a move that could solicit bigger investors, which shareholders voted on at a March 31 meeting.

Keith Brown, a Gravelbourg businessman and director with AIC, says his group and Prairie Pasta will discuss common interests regarding pasta processing on the prairies.

"We have an agreement signed in order to allow us to sit down at the discussion table and share some viewpoints. I would not say we've agreed to build a plant together," said Brown, adding AIC is open to working with other interested parties.

Regardless, Schnell is enthusiastic about the proposed talks, and about discussions he's had with another pasta group - the well-established Dakota Growers co-operative, based in Carrington, North Dakota.

"We were down to visit them (last) Wednesday and had some good discussion, and we're going to keep talking to them as well," said Schnell.

The re-invigorated interest in Prairie Pasta by other industry players was exactly what Schnell was hoping for when his group set out to raise $5 million in trust, during 32 meetings held in late March and early April.

The $5 million in funds was to be held in a trust account at the Estevan Credit Union until no later than June 15, 2001. At that time farmers could decide if they wanted to commit by buying shares, or have their money returned to them.

For every common share held an individual is entitled to deliver one bushel of durum. For every $2 producers put in the trust account, they had the right to buy one share.

But Prairie Pasta's careful plan hit a snag because they jumped the gun in assuming the escrow drive would be approved by the Saskatchewan Securities Commission. They thought they would have much more time to raise the money, but the delay in approval left them with three short weeks to raise the self-imposed minimum of $5 million.

Now the $2.8 million in trust - representing 1.4 million bushels in Saskatchewan, Manitoba, North Dakota and Montana - must be returned to the farmers who pledged the money during the escrow drive, because the group failed to reach its $5 million goal.

"If there was a mistake I ever made, it was setting it up this way. We threw a minimum of $5 million out there, but it just as easily could've been $2 million. We thought we would have all February and March to do this. The time line is what got us down. But I'm still thinking everything is on track," he said.

"Don't get hung up on that $5 million, because that was just a figure."

The larger purpose - attracting partners by demonstrating a high level of interest - has been served, adds Schnell.

"That's exactly what did happen. We could've been smoke and mirrors and 600 farmers with a dream forever until we went out and showed we were real, and that's what we did. Even before the escrow drive was over we had a couple of calls from Dakota Growers and interest by AIC."

Now it's back to business for Prairie Pasta, with a long-awaited business plan to be completed in the next couple of months, funded by previously-raised money, and a prospectus done by the fall. At that time, the group will be asking farmers to put down money on Prairie Pasta for real.

Schnell says farmers who pledged money during the escrow drive will still get first crack at buying shares.

Prairie Pasta's plan is for farmer-members of the closed co-op to buy an existing pasta plant in the U.S. or Canada, with the long-term goal of building a durum mill and pasta plant in Weyburn.

The plan to buy a plant rather than build hasn't been adopted by the Swift Current group, says Brown, although that group's business plan isn't set in stone either.

"We haven't rejected or accepted their strategic plan because we don't know enough about it," Brown said.