<SUBMISSION>
<ACCESSION-NUMBER>0001200952-03-000705
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20030630
<FILING-DATE>20030814
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AG BAG INTERNATIONAL LTD
<CIK>0000842289
<ASSIGNED-SIC>3089
<IRS-NUMBER>931143627
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-18259
<FILM-NUMBER>03848666
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2320 SE AG BAG LN
<CITY>WARRENTON
<STATE>OR
<ZIP>97146
<PHONE>5038611644
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2320 SE AG BAG LANE
<CITY>WARRENTON
<STATE>OR
<ZIP>97146
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>AB HOLDING GROUP INC
<DATE-CHANGED>19901106
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>ab_q30630.txt
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q


Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934


For the quarterly period ended:          June 30, 2003


Commission file Number:  0-18259


                  AG-BAG INTERNATIONAL LIMITED
     (Exact name of registrant as specified in its charter)


         Delaware                                 93-1143627
(State or other jurisdiction                  (I.R.S. Employer
 of incorporation or organization)             Identification No.)


2320 SE Ag-Bag Lane, Warrenton  OR                  97146
(Address of principal executive offices)          (Zip Code)


                                  (503)861-1644
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                    YES  [ X ]      NO [   ]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2)
                    YES  [   ]      NO [ X ]


     The registrant has one class of Common Stock with 11,956,991 shares
outstanding as of July 29, 2003.




                                       1
<PAGE>
                         PART 1 - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                    AG-BAG INTERNATIONAL LIMITED
                      CONDENSED BALANCE SHEETS



                              ASSETS

                                       June 30          December 31
                                                       (Unaudited)
                                   2003        2002         2002
                               ----------   ----------   ----------

Current assets:
 Cash and cash equivalents    $   275,956  $   106,393  $    67,526
 Accounts receivable            2,395,522    6,084,715    1,158,927
 Inventories                    7,223,000    7,994,519    6,051,720
 Other current assets             325,775      285,755      198,877
 Deferred income tax              392,000      305,000      388,000
                               ----------   ----------   ----------


    Total current assets       10,612,253   14,776,382    7,865,050

 Deferred income tax              717,000      161,000      625,000
 Intangible assets, less
  accumulated amortization         20,019       15,202       11,511
 Property, plant and equipment
  less accumulated depreciation 3,585,951    4,327,335    3,958,473
 BAW Joint-venture                266,520      305,438      397,938
 Other assets                     476,417      458,513      490,628
                                ---------   ----------   ----------

Total assets                  $15,678,160  $20,043,870  $13,348,600
                               ==========   ==========   ==========



                           (Continued)



                                       2
<PAGE>
                    AG-BAG INTERNATIONAL LIMITED
                     CONDENSED BALANCE SHEETS

                LIABILITIES AND SHAREHOLDERS' EQUITY

                                       June 30          December 31
                                     (Unaudited)
                                  2003         2002         2002
                               ----------   ----------   ----------
Current liabilities:
 Notes payable to bank        $ 1,871,328  $ 4,187,082  $   384,725
 Current portion of long term
  debt and capital lease
  obligations                     201,810      390,812      351,974
 Accounts payable               2,129,440    2,530,549      903,309
 Accrued expenses and other
  current liabilities           1,318,430    1,081,200    1,135,608
 Income tax payable                 2,210      126,535        2,210
                               -----------  -----------  -----------

   Total current liabilities    5,523,218    8,316,178    2,777,826

 Long-term debt and capital
  lease obligation, less
  current portion               1,156,659    1,631,906    1,459,138
                                ---------    ----------   ----------
   Total liabilities            6,679,877    9,948,084    4,236,964
                                ---------    ----------   ----------
Commitments

Shareholders' equity:
 Preferred stock, $4LV 8 1/2%
  nonvoting                       696,000      696,000      696,000
 Common stock, $.01 par value     120,619      120,619      120,619
 Additional paid-in capital     9,210,211    9,210,211    9,210,211
 Treasury stock                  ( 31,500)     (31,500)    ( 31,500)
 Retained earnings (deficit)     (997,047)     100,456     (883,694)
                                ---------    ---------   ----------
   Total shareholders' equity   8,998,283   10,095,786    9,111,636
                                ---------    ---------   ----------
Total liabilities and
 shareholders' equity         $15,678,160  $20,043,870  $13,348,600
                               ==========   ==========   ==========







          See Notes to Condensed Financial Information

                                       3
<PAGE>
<TABLE>
<CAPTION>
                                         AG-BAG INTERNATIONAL LIMITED
                                    CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                                                    (Unaudited)



                            Preferred Stock        Common Stock       Treasury Stock       Paid-In   Accumulated
                            Shares    Amount     Shares     Amount   Shares     Amount     Capital     Deficit       Total
                            ------    ------     ------     ------   ------     ------     -------     --------   -----------
<S>                        <C>      <C>       <C>         <C>         <C>     <C>        <C>          <C>         <C>
Balance December 31, 2002  174,000  $696,000  12,061,991  $120,619    105,000 ($31,500)  $9,210,211   $(883,694)  $9,111,636

Preferred stock dividends                                                                               (14,790)     (14,790)
Net loss                                                                                                (49,287)    ( 49,287)
                           -------   -------  ----------   -------   --------   -------    ---------   --------   -----------
Balance March 31, 2003     174,000  $696,000  12,061,991  $120,619    105,000 ($31,500)  $9,210,211   $(947,771)  $9,047,559

Preferred stock dividends                                                                               (14,790)     (14,790)
Net loss                                                                                                (34,486)     (34,486)
                           -------   -------  ----------   -------   --------   -------    ---------   --------   -----------
Balance June 30, 2003      174,000  $696,000  12,061,991  $120,619    105,000 ($31,500)  $9,210,211   $(997,047)  $8,998,283
                           =======   =======  ==========   =======   ========   =======   ==========   ========   ===========

</TABLE>






































                  See Notes to Condensed Financial Information

                                       4
<PAGE>
                       AG-BAG INTERNATIONAL LIMITED
                      CONDENSED STATEMENTS OF OPERATIONS

                                                           Three Months
                                                          Ended June 30
                                                           (Unaudited)
                                                      ----------------------
                                                         2003         2002

Net sales                                            $ 5,959,541  $ 9,929,227
Cost of sales                                          4,737,946    7,355,322
                                                       ---------    ---------
Gross profit from operations                           1,221,595    2,573,905

Selling expenses                                         854,263      983,153
Administrative expenses                                  773,627      767,335
Gain on sale of assets                                  (172,919)        (500)
Research and development expenses                         67,051       43,672
                                                       ---------    ---------
Income (loss) from operations                           (300,427)     780,245

Other income (expense):
  Interest income                                           -          16,778
  Interest expense                                      ( 63,953)    ( 91,194)
  Miscellaneous                                          285,894      123,181
                                                       ---------    ---------
Income (loss) before provision for
 income taxes                                            (78,486)     829,010

Provision (benefit) for income taxes                     (44,000)     287,000
                                                       ---------    ---------

Net income(loss) and comprehensive income(loss)      $   (34,486) $   542,010
                                                       =========    =========
Basic and diluted net income(loss)
 per common share                                    $       .00  $       .04
                                                       =========    =========
Basic and diluted weighted average
 number of common shares outstanding                  11,956,991   11,963,589
                                                      ==========   ==========
















                  See Notes to Condensed Financial Information
                                       5
<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                       CONDENSED STATEMENTS OF OPERATIONS

                                                           Six Months
                                                           Ended June 30
                                                           (Unaudited)
                                                       ----------------------
                                                         2003         2002
                                                         ----         ----

Net sales                                            $13,125,126  $14,736,712
Cost of sales                                         10,396,586   11,116,937
                                                       ---------    ---------
Gross profit from operations                           2,728,540    3,619,775

Selling expenses                                       1,831,242    1,786,281
Administrative expenses                                1,430,268    1,398,485
Gain on sale of assets                                  (172,919)        (500)
Research and development expenses                         90,118       66,607
                                                       ---------    ---------
Income (loss) from operations                           (450,169)     368,902

Other income (expense):
  Interest income                                           -          25,994
  Interest expense                                      (111,454)    (157,328)
  Miscellaneous                                          381,850      188,549
                                                       ---------    ---------
Income (loss) before provision for
 income taxes                                           (179,773)     426,117

Provision (benefit) for income taxes                     (96,000)     135,535
                                                       ---------    ---------

Net income(loss) and comprehensive income(loss)      $   (83,773) $   290,582
                                                       =========    =========
Basic and diluted net income(loss)
 per common share                                    $      (.01) $       .02
                                                       =========    =========
Basic and diluted weighted average
 number of common shares outstanding                  11,956,991   11,957,409
                                                      ==========   ==========

















                  See Notes to Condensed Financial Information

                                       6
<PAGE>
                          AG-BAG INTERNATIONAL LIMITED
                         CONDENSED STATEMENTS OF CASH FLOWS

                                                     Six Months Ended June 30
                                                           (Unaudited)
                                                       ----------------------
                                                         2003         2002
                                                         ----         ----
Cash flows from operating activities:
 Net income (loss)                                   $   (83,773) $   290,582
 Adjustments to reconcile net income
  to net cash used in operating activities:
   Depreciation and amortization                         407,317      402,903
   Inventory obsolescence reserves                        60,000      (40,000)
   Deferred income taxes                                 (96,000)       9,000
  (Gain)/loss on disposition of equipment               (172,919)        (500)
 Changes in assets and liabilities:
    Accounts receivable                               (1,236,595)  (3,650,873)
    Inventories                                       (1,279,701)  (1,590,351)
    Other current assets                                (126,898)    ( 60,211)
    Accounts payable                                   1,226,131    1,857,986
    Accrued expenses and other current
     liabilities                                         182,822      104,898
    Other assets                                         (27,289)     (9,309)
    Income tax payable                                       -        126,535
                                                      ----------  -----------
Net cash used in operating
    activities                                        (1,146,905)  (2,559,340)
                                                     -----------  -----------

Cash flows from investing activities:
   Capital expenditures                                 ( 38,313)    (166,969)
   Intangible assets                                    ( 12,532)        -
   Proceeds from disposition of equipment                401,800          500
                                                        ---------    ---------
Net cash provided (used) in
   investing activities                                  350,955     (166,469)
                                                       ---------    ---------

Cash flows from financing activities:
   Net proceeds from line of credit                    1,486,603    2,899,227
   Principal payments on debt                           (452,643)    (201,971)
   Payment of preferred dividends                        (29,580)     (29,580)
                                                       ---------    ---------
Net cash provided by financing
   activities                                          1,004,380    2,667,676
                                                       ---------    ----------

Net increase/(decrease) in cash                          208,430     ( 58,133)

Cash and cash equivalents at beginning
 of period                                                67,526      164,526
                                                       ---------    ---------

Cash and cash equivalents at end of period           $   275,956  $   106,393
                                                       =========   ==========




                  See Notes to Condensed Financial Information

                                       7
<PAGE>
                   AG-BAG INTERNATIONAL LIMITED
              Notes to Condensed Financial Information
                           (Unaudited)

Note 1 - Description of Business and Summary of Significant
Accounting Policies
--------------------------------------------------------------------------------


The accompanying unaudited condensed financial statements have been prepared in
accordance with the instructions to Form 10-Q. They do not include all
information and footnotes necessary for a fair presentation of financial
position and results of operations and cash flows in conformity with accounting
principles generally accepted in the United States of America. These condensed
financial statements should be read in conjunction with the financial statements
and related notes contained in the Company's Annual Report on Form 10-K for the
year ended December 31, 2002. In the opinion of management, all adjustments of a
normal recurring nature that are considered necessary for a fair presentation
have been included in the interim period. Operating results for the period ended
June 30, 2003 are not necessarily indicative of the results that may be expected
for the year ending December 31, 2003.


Inventories
-----------

Inventories consist of the following:

                                       June 30,           December 31,
                                     (Unaudited)
                                 2003           2002           2002
                              ----------     ----------     ----------
         Finished goods       $5,747,958     $6,561,272     $4,830,332
         Work in process      $1,279,196     $1,030,998     $1,116,606
         Raw materials        $  195,846     $  402,249     $  104,782
                              ----------     ----------     ----------
             Total            $7,223,000     $7,994,519     $6,051,720
                              ==========     ==========     ==========


Seasonal Fluctuations
---------------------

The core business of the Company is historically seasonal due to the harvest
seasons in North America and Europe. The seasonal nature of the Company's
operations results in between 65-70% of the Company's revenue being generated
during the spring and summer (2nd and 3rd Quarters). In September 2002, the
Company took steps to counteract seasonality by developing and introducing a
Pre-Season ordering program, whereby the Company's dealers place their next
year's annual product requirements order in advance. This allows the Company to
know in advance its production mix which in turn allows leveling of production
and flexibility in customer shipments. The six-month results may not be
indicative of the estimated results for a full fiscal year.

                                       8
<PAGE>
BAW Joint Venture
-----------------

The Company has a 50% interest in the BAW (Budissa Agrodienstleistungen Und
Warenhandels) venture which is accounted for under the equity method. Condensed
income statements for the Company's BAW Joint Venture in Germany are as follows:


                                                   (Dollars in 000's)
                                                Six Months Ended June 30
                                                      (Unaudited)
                                       ----------------------------------------
                                                2003                 2002
                                                ----                 ----

Net sales                                      $ 1,178              $   897
Cost of goods sold                              (1,029)                (748)
                                       ----------------------------------------
Gross profit                                       149                  149
Selling & administrative expenses                 (165)                (107)
Other income (expense)                              33                   68
Income tax expense                                  (6)                 (44)
                                       ----------------------------------------
Net income*                                    $    11              $    66
                                       ========================================

*  Attributed to other shareholders            $     1              $     7

The condensed income statements have been translated from the Euro to the U.S.
dollar at average exchange rates in effect for the periods ended June 30, 2003
and 2002. The average exchange rates used at June 30, 2003 and 2002 were $1.10
and $.94 respectively.


Income Taxes
------------

Income taxes are lower than the expected statutory rates due to the Company's
recognition of the tax benefits of the research and development tax credit, the
non-taxability of income from the Company's investment in its BAW Joint Venture,
and the extraterritorial income exclusion.







                                       9
<PAGE>
Warranty
--------

At the time of sale, the Company accrues a liability for the estimated future
costs to be incurred under the provisions of its warranty agreements. The
Company reviews its historical warranty expense and current sales trends in
products covered under warranty, and adjusts its warranty reserves accordingly.

The activity in that account for the periods ended was as follows:
                                              June 30,          June 30,
                                                2003              2002
                                            ----------------  ----------------
Balance, beginning of the year
                                              $177,384          $124,482
Charged to expense                              70,400            99,247
Warranty costs incurred during the period      (84,142)         (101,975)
                                            ----------------  ----------------
Balance, end of period                        $163,642          $121,754
                                            ================  ================



Stock option plan
-----------------

The Company applies Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations in
accounting for its stock option plan. Accordingly, compensation expense related
to grants to employees would be recorded on the date of grant only if the
current market price of the underlying stock exceeded the exercise price. Had
compensation cost for the Company's stock option plan been determined based upon
the fair value at grant date for awards under the plan consistent with the
methodology prescribed under Statement of Financial Accounting Standards (SFAS)
No. 123, "Accounting for Stock-Based Compensation," additional compensation
expense would have been recognized.
























                                       10
<PAGE>
The Company has computed the value of all options granted during the six-month
period ended June 30, 2003 and 2002 using the Black-Scholes pricing model as
prescribed under SFAS 123. The pro-forma effect on net income of options granted
is as follows:

                                                 June 30,         June 30,
                                                   2003             2002
                                              --------------   --------------

              Net income (loss):
                  As reported                  $(83,773)        $ 290,582
                  Pro forma                    $(90,053)        $ 285,937

              Net income (loss)per share:
                  As reported                    (.01)              .02
                  Pro forma                      (.01)              .02


Contingencies
-------------

  The Company is involved in litigation matters that are in the normal course of
business. Management is of the opinion that these matters will not have a
material effect on the accompanying financial statements. Accordingly, no
provision for these matters is included in the financial statements for the
six-month period ended June 30, 2003.


Recently Issued Accounting Standards
------------------------------------

         In June 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 150, "Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity." This statement establishes standards regarding classification and
measurement of certain financial instruments with characteristics of both
liabilities and equity. It requires financial instruments within the scope of
this statement to be classified as liabilities (or an asset in some
circumstances). Many of these financial instruments were previously classified
as equity. This statement is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003. The Company's management
does not expect that the application of the provisions of this statement will
have a material impact on the Company's financial statements.















                                       11
<PAGE>
         In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement
133 on Derivative Instruments and Hedging Activities." This statement amends and
clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities under FASB Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement is effective for contracts
entered into or modified after June 30, 2003, except for hedging relationships
designated after June 30, 2003. The provisions of this statement relating to
Statement 133 implementation issues, that have been effective for fiscal
quarters that began prior to June 15, 2003, should continue to be applied in
accordance with their respective effective dates. In addition, paragraphs 7(a)
and 23(a), which relate to forward purchases or sales of when-issued securities
or other securities that do not yet exist, should be applied to both existing
contracts and new contracts entered into after June 30, 2003. The Company's
management does not expect that the application of the provisions of this
statement will have a material impact on the Company's financial statements.

         In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation--Transition and Disclosure--an amendment of FASB
Statement No. 123." This Statement amends FASB Statement No. 123, "Accounting
for Stock-Based Compensation," to provide alternative methods of transition for
a voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, this Statement amends the disclosure
requirements of Statement 123 to require prominent disclosures in both annual
and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. The
Company's management intends to continue using the intrinsic value method for
stock-based employee compensation arrangements and therefore does not expect
that the application provisions of this statement will have a material impact on
the Company's financial statements.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." This Statement addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." The statement
is effective for exit or disposal activities that are initiated after December
31, 2002. The Company's management does not expect that the application of the
provisions of this statement will have a material impact on the Company's
financial statements.

         In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." This Statement rescinds FASB


                                       12
<PAGE>
Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and
an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt
Made to Satisfy Sinking-Fund Requirements." This Statement also rescinds FASB
Statement No. 44, "Accounting for Intangible Assets of Motor Carriers." This
Statement amends FASB Statement No. 13, "Accounting for Leases," to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. This Statement also
amends other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions. The Company's management does not expect that the application of the
provisions of this statement will have a material impact on the Company's
financial statements.

         In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses the accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. SFAS No. 143 is effective for the Company in
the first quarter of 2003. The Company's management does not expect that the
application of the provisions of this statement will have a material impact on
the Company's financial statements.

         In January 2003, FASB issued Interpretation No. 46 (FIN 46),
"Consolidation of Variable Interest Entities." This interpretation clarifies the
application of Accounting Research Bulletin No. 51, "Consolidated Financial
Statements," and requires existing unconsolidated variable interest entities to
be consolidated by their primary beneficiaries if the entities do not
effectively disperse risks among parties involved. The Company's management does
not expect that the application of the provisions of this interpretation will
have a material impact on the Company's financial statements.

         In November 2002, FASB issued Interpretation No. 45 (FIN 45),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." This interpretation elaborates
on the disclosures to be made by a guarantor in its financial statements about
its obligations under certain guarantees that it has issued. It also clarifies
that a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing a
guarantee. The Company has complied with the disclosure requirements of FIN 45.
The initial recognition and initial measurement provisions shall be applied on a
prospective basis to guarantees issued or modified after December 31, 2002. The
Company's management does not expect that the application of the provisions of
this interpretation will have a material impact on the Company's financial
statements.




                                       13
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

General
-------

         Reference is made to Item 7 of "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2002, on file with the
Securities and Exchange Commission ("SEC"). The following discussion and
analysis pertains to the Company's results of operations for the three-month
period ended June 30, 2003, compared to the results of operations for the
three-month period ended June 30, 2002, and to the results of operations for the
six-month period ended June 30, 2003, compared to the results of operations for
the six-month period ended June 30, 2002 and to changes in the Company's
financial condition from December 31, 2002 to June 30, 2003.

Critical Accounting Policies
----------------------------

      The Company's significant accounting policies are described in Note 1 to
the financial statements included in Item 15 of the Annual Report on Form 10-K,
filed with the SEC for the year ended December 31, 2002. The Company believes
its most critical accounting policies include inventory obsolescence reserves,
allowance for doubtful accounts, accounting for warranty reserves and accounting
for income taxes.

      The $791,322 estimate for inventory obsolescence reserves was developed
using inventory-aging reports for finished goods, combined with historical
usage, and forecasted usage and inventory shelf life. The Company's estimates of
market value incorporate projections of future sales volume by product class. In
estimating the market value of parts inventory items included in finished goods,
the Company reviews current inventory levels in relation to sales forecasts and
adjusts the valuation reserve accordingly. For the remaining categories of
inventory, the Company establishes a reserve balance based on the aging of the
specific inventory items. As trends in these variables change, the percentages
applied to the inventory aging categories are updated.

         The $160,571 estimate of allowance for doubtful accounts is comprised
of a specific account analysis and a general reserve. Accounts where specific
information indicates a potential loss may exist are reviewed and a specific
reserve against amounts due is recorded. As additional information becomes
available such specific account reserves are updated. Additionally, a general
reserve is applied based upon historical collection and write-off experience. As
trends in historical collection and write-offs change, the general reserve is
updated.



                                       14
<PAGE>
         The $163,642 estimate for warranty reserve is developed based upon the
estimated future costs to be incurred under the provisions of the Company's
warranty agreements on its bags and machines. The Company reviews its historical
warranty expense and current sales trends in specific products covered under
warranty, and reserves are updated as trends in these variables change.

      The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Valuation allowances are
established to reduce potential deferred tax assets when it is more likely than
not that all or some portion of potential deferred tax assets will not be
realized.

Forward-Looking Statements
--------------------------

         Certain statements in this Form 10-Q contain "forward-looking"
information (as defined in Section 27A of the Securities Act of 1933, as
amended) that involves risks and uncertainties that may cause actual results to
differ materially from those predicted in the forward-looking statements.
Forward-looking statements can be identified by their use of such verbs as
expects, anticipates, believes or similar verbs or conjugations of such verbs.
If any of the Company's assumptions on which the forward-looking statements are
based prove incorrect or should unanticipated circumstances arise, the Company's
actual results could differ materially from those anticipated by such
forward-looking statements. The differences could be caused by a number of
factors or combination of factors including, but not limited to, the factors
listed below and the risks detailed in the Company's Securities and Exchange
Commission filings, including the Company's Form 10-K for the fiscal year ended
December 31, 2002.

         Forward-looking statements contained in this Form 10-Q relate to the
Company's plans and expectations as to: timing of demand for bagging machines
and bags; reductions in U.S. milk prices; optimism in increased milk prices
within the U.S. farm economy for the remainder of 2003; availability of credit
in the farming sector; potential purchases of the Company's bagging machines,
bags and composting systems; anticipated inventory production; the level of
acceptance of the Company's new Pre-Season order program for 2003; the
availability of trade credit and working capital; the availability of third
party financing sources; consumer sentiment and health of the U.S. and global
economy; the Company's dependence on the dairy industry; and the outcome of
pending litigation against the Company.



                                       15
<PAGE>
         The following factors, among others, could cause actual results to
differ from those indicated in the forward-looking statements: a downturn in the
dairy industry; a sharp decline in U.S. milk prices; a reduction in availability
of credit in the farming sector or the Company's third party financing sources;
an increase in interest rates; adverse weather conditions; a sharp decline in
the health of the farming sector of the U.S. economy; a sharp decline in
government subsidies to the farming sector; disruption of the manufacturing
process of our sole bag manufacturer; increases in the price of bags; and an
adverse outcome in any of the pending litigation against the Company.


Results of Operations
---------------------

     The core business of the Company is historically seasonal due to the
harvest seasons in North America and Europe. The Company's machinery tends to be
purchased in anticipation of the next harvest season, so most of the sales of
machinery occur in the spring and summer. This may require the Company to carry
significant amounts of inventory to meet rapid delivery requirements of
customers. Bag sales tend to occur as the harvest season approaches in the
summer, and during the harvest season in the fall. In September 2002 however,
the Company took steps to counteract seasonality by developing and introducing a
Pre-Season ordering program, whereby the Company's dealers place their next
year's annual product requirements order in advance. This allows the Company to
know in advance its production mix which in turn allows leveling of production
and flexibility in customer shipments.

     Approximately 95% of the Company's business is concentrated in the Northern
Hemisphere, historically resulting in between 65-70% of the Company's revenue
being generated during the spring and summer (2nd and 3rd Quarters). The
following table outlines the percentage of revenue over the past three years by
quarter:

         Quarter                 2000              2001             2002
         -------                 ----              ----             ----
         1st                     21%               15%              18%
         2nd                     31%               35%              37%
         3rd                     34%               35%              32%
         4th                     14%               15%              13%

     As a result of the introduction in September 2002 of the Company's new
Pre-Season order program, these historical revenue percentages may not be
indicative of future revenue percentage by quarter.

      Sales for the quarter ended June 30, 2003 decreased 39.98% to $5,959,541
compared to $9,929,227 for the quarter ended June 30, 2002. Sales for the
six-month period ended June 30, 2003 decreased 10.94% to $13,125,126 compared to
$14,736,712 for the six-month period ended June 30, 2002. Sales were down for
the quarter as a


                                       16
<PAGE>
result of the slow U.S. farm economy coupled with the new Pre-Season order
program, which has begun to change the Company's historical shipping patterns.
With the introduction of this Pre-Season program in September 2002, the Company
took steps to eliminate some of its seasonality and to be able to plan its
production mix in advance. This allowed the Company to begin leveling out
production and to increase flexibility in customer shipments.

         During the first six-months of 2003, milk prices continued at record
low levels, but optimism is beginning to show in the U.S. farm economy that milk
prices will begin moving upward during the remainder of 2003 and that farmers
should begin seeing increases in their monthly milk checks as early as August
2003. Farmers continue to be cautious, despite continued low interest rates, on
increasing their capital expenditures until there is sustained upward movement
in milk prices and they are able to repay their growing existing obligations.
During the quarter and six-month period, strong competition continued in the
silage bag market, as farmers look for the most economical bag, without
considering overall quality, customer service and recycling of the used plastic
silage bags offered by the Company.

         Machine sale revenue for the quarter declined 52.92% and bag sale
revenue declined 33.73% compared to the same period of 2002. Machine sale
revenue for the six-month period declined 15.77% and bag sale revenue declined
14.07% compared to the same period of 2002. Machine sale revenue for the quarter
declined as a result of farmers being cautious on capital expenditures given the
low milk prices. Bag sales declined for the quarter as a result of customers
waiting until they are ready to use their bags in the field before taking
delivery due to their tight cash constraints from the low milk prices. The
decline in both machine and bag sale revenue in the second quarter more than
offset the increases seen in the first quarter of 2003 from the Pre-Season
ordering program.

         The following table identifies revenue from each product line that
accounted for more that 15% of total revenue for the quarter and six-month
period as compared to the same quarter and six-month period in the prior year:


























                                       17
<PAGE>


                                                 Six-months        Six-months
                 2nd quarter   2nd quarter         ended             ended
 Product             2003          2002         June 30, 2003     June 30, 2002
 -------             ----          ----         -------------     -------------
Bags                 57%           52%               43%               45%
Machines             32%           40%               44%               47%
Other                11%            8%               13%                8%
                     ---            --               ---                --
Net Sales            100%          100%              100%              100%


         Machine sales are directly tied to farmers' income and therefore their
ability to purchase new equipment. The total number of bagging machines that are
in the marketplace drives the Company's bag and parts sales. However, there is
not a direct correlation between the Company's bag sales and machine sales, as
the Company's and competitors' bags are interchangeable on all bagging machinery
in the industry. The Company cannot estimate with any certainty the total number
of machines or bags used in the industry.

         Although the Company sells its products primarily through a worldwide
dealer network, certain sales are made directly to large volume customers when a
dealer is not present in the customer's geographic market. For each of the last
three years, the Company estimates that direct sales make up between 33-38% of
total sales. The gross margin realized on the Company's direct sales are
typically within 1-3% of those sales realized through the Company's dealer
network. However, various economic, volume and market factors in the geographic
area impact the ultimate margin. Beginning in 2002, the Company began focusing
its marketing efforts more on dealer development and expanding its dealer
network rather than a focus towards direct selling. As a result of this shift,
the Company anticipates its sales mix to begin to favor more dealer sales in the
future.

         Gross profit as a percentage of sales decreased 20.91% for the quarter
ended June 30, 2003 compared to the same period in 2002. Gross profit as a
percentage of sales decreased 15.35% for the six-month period ended June 30,
2003 compared to the same period in 2002. The decrease for the quarter was the
result of 1) lower margins on the Company's used equipment sold during the
quarter, 2) lower margins on bags in certain highly competitive, high volume
geographic areas, and, (3) lower sales volumes for the quarter to cover fixed
operating overheads. The decrease was partially offset by improved margins on
the Company's "core" smaller bagging machines from production improvements made
during 2002. The decrease for the six-month period was the result of the above
mentioned factors coupled with the mix of machine models sold during the first
quarter of 2003, which saw a 30% increase in unit sales of the Company's
larger-sized bagging machines. Larger-sized


                                       18
<PAGE>
bagging machines generate a lower overall margin for the Company than its "core"
small sized bagging machine.

         Selling expenses for the quarter ended June 30, 2003 decreased 13.11%
to $854,263 compared to $983,153 for the quarter ended June 30, 2002. Selling
expenses for the six-month period ended June 30, 2003 increased 2.52% to
$1,831,242 compared to $1,786,281 for the six-month period ended June 30, 2002.
The decrease in selling expenses for the quarter was the result of lower
commissions from lower sales volumes, coupled with lower advertising, personnel,
benefit, and travel costs associated with sales personnel reductions made in
late 2002 in connection with the shift more towards selling through the
Company's dealer network, partially offset by increased dealer incentive costs.
For the six-month period, the increase in selling expenses was the result of
increased dealer incentive costs partially offset by lower commissions,
advertising, personnel, benefit, and travel costs associated with sales
personnel reductions made in late 2002.

         Administrative expenses for the quarter ended June 30, 2003 were flat
at $773,627 compared to $767,335 for the quarter ended June 30, 2002.
Administrative expenses for the six-month period ended June 30, 2003 increased
2.27% to $1,430,268 compared to $1,398,485 for the six-month period ended June
30, 2002. The increase for the six-month period was the result of higher
professional fees and increases in general office, administrative travel, and
insurance expense, partially offset by lower bad debt and employee benefit
expenses.

         During the second quarter of 2003, the Company recorded a gain from the
sale of assets of $345,837. The gain largely resulted from depreciated folding
equipment that was sold to its German joint venture. Under the equity method of
accounting with the Company's 50% ownership in the German joint venture, the
Company's share of the gain of $172,918 will be deferred and recognized as the
German joint venture depreciates the folding equipment over its useful life.

         Research and development expenses for the quarter ended June 30, 2003
increased 53.53% to $67,051 compared to $43,672 for the quarter ended June 30,
2002. Research and development expenses for the six-month period ended June 30,
2003 increased 35.30% to $90,118 compared to $66,607 for the six month period
ended June 30, 2002. The increase in research and development for the quarter
and six-month period was the result of continued development and ongoing testing
of the newer design of the Company's larger-sized silage bagging machine, in
addition to continuing ongoing research regarding new silage and nutritional
studies of bagged feed and their effects on animal production.

         Interest expense for the quarter ended June 30, 2003 decreased 29.87%
to $63,953 compared to $91,194 for the quarter ended June


                                       19
<PAGE>
30, 2002. Interest expense for the six-month period ended June 30, 2003
decreased 29.16% to $111,454 compared to $157,328 for the six-month period ended
June 30, 2002. The decrease for the quarter and six-month period was the result
of the Company utilizing a smaller portion of its credit facility as a result of
the Company changing its collection methods during the fourth quarter of 2002
whereby the Company's customers no longer have open account terms. The Company's
customers now have the option to pay in advance for their order, utilize their
own established credit, or utilize one of the Company's third-party financing
sources or programs offered for their purchases.

         Miscellaneous income for the quarter ended June 30, 2003 increased
132.10% to $285,894 compared to $123,181 for the quarter ended June 30, 2002.
Miscellaneous income for the six-month period ended June 30, 2003 increased
102.52% to $381,850 compared to $188,549 for the six month period ended June 30,
2002. The increase for the quarter and six-month period was the result of 1) a
special one-time folding royalty received from the Company's German joint
venture upon the sale of folding equipment to the German joint venture during
the quarter, which resulted in the termination of the folding lease agreement
and future folding royalties, and 2) an increase in general miscellaneous income
from foregone dealer deposits.

         For the quarter ended June 30, 2003, the company recorded a net tax
benefit of $44,000 compared to income tax expense of $287,000 for the quarter
ended June 30, 2002. For the six-month period ended June 30, 2003, the company
recorded a net tax benefit of $96,000 compared to income tax expense of $135,535
for the six-month period ended June 30, 2002. The Company's effective tax rates
were lower in 2003 due to 1) the fact the Company's income from its German joint
venture is not taxable in the United States, 2) the extraterritorial income
exclusion provisions of the current United States tax code, 3) the fact the
Company incurred a small net loss for the first quarter, and 4) the recognition
of research and development credits associated with the Company's activities.

         Net loss for the quarter ended June 30, 2003 was $(34,486) compared to
net income of $542,010 for the quarter ended June 30, 2002. Net loss for the
six-month period ended June 30, 2003 was $(83,773) compared to net income of
$290,582 for the six-month period ended June 30, 2002. The net loss for the
quarter was the result of lower sales and increased research and development
costs, partially offset by decreased selling and interest expenses and higher
miscellaneous income and gain from sale of assets. The net loss for the
six-month period was the result of lower sales coupled with increased selling,
administrative and research and development costs which were partially offset by
lower interest expense and higher miscellaneous income and gain from sale of
assets.




                                       20
<PAGE>
Liquidity and Capital Resources
-------------------------------

         The seasonal nature of the northern hemisphere farming industry, the
production time for equipment and the time required to prepare bags for use
requires the Company to manufacture and carry high inventories to meet rapid
delivery requirements. In particular, the Company must maintain a significant
level of bags during the spring and summer to meet the sales demands during the
harvest season. The Company uses working capital and trade credit to increase
its inventory so that it has sufficient inventory levels available to meet its
sales demands.

         The Company relies on its suppliers to provide trade credit to enable
the Company to build its inventory. The Company's suppliers have provided
sufficient trade credit to meet the demand to date and management believes this
will continue. No assurance can be given that suppliers will continue to provide
sufficient trade credit in the future.

         Accounts receivable decreased 60.63% at June 30, 2003 to $2,395,522
compared to $6,084,715 at June 30, 2002. The decrease for the quarter was the
result of the Company changing its collection methods during the fourth quarter
of 2002 whereby the Company's customers no longer have open account terms. For
new purchases, the Company's customers now have the option to pay in advance for
their order, utilize their own established credit, or utilize one of the
Company's third-party financing sources or programs offered for their purchases.
The Company's third-party financing sources generally provide funding to the
Company within 10 days of invoice processing.

         Inventory decreased 9.65% at June 30, 2003 to $7,223,000 compared to
$7,994,519 at June 30, 2002. The decrease in inventory resulted from the
Company's continued efforts to streamline its inventory and more closely match
its production with planned inventory requirements. Contributing to these
efforts was the implementation of the Company's new Pre-Season ordering program
introduced in September 2002.

         Other current assets increased 14.01% at June 30, 2003 to $325,775
compared to $285,755 at June 30, 2002. The increase was the result of an
increase in show deposits and prepaid insurance expense.

         BAW joint venture asset decreased to $266,520 at June 30, 2003 compared
to $305,438 at June 30, 2002. The decrease was the result of the deferred gain
under the equity method of accounting, of the Company's share of gain from the
sale of folding equipment sold to the German joint venture.


                                       21
<PAGE>
         Intangible assets at June 30, 2003 increased 31.69% to $20,019 compared
to $15,202 at June 30, 2002. The increase was the result of new patents
developed on the Company's bagging machine technology, offset by normal
amortization expense.

      Other assets increased 3.91% at June 30, 2003 to $476,417 compared to
$458,513 at June 30, 2002. The increase for the quarter was the result of an
increase in the cash surrender value of life insurance policies maintained by
the Company under which it is the beneficiary.

         The Company has an operating line of credit with a limit of $3,000,000,
secured by accounts receivable, inventory, fixed asset blanket and general
intangibles, and bears interest at the bank's prime rate plus 1 3/4%. As of June
30, 2003, $1,871,328 had been drawn under the credit line. The line of credit is
subject to certain net worth and earnings covenants, and an annual capital
expenditure limit. Management believes that funds generated from operations and
the Company's operating line of credit will be sufficient to meet the Company's
cash requirements through the remainder of 2003. The Company's line of credit is
subject to renewal in May 2006.

         On December 18, 2000, the Company entered into an agreement with
Dresdner Bank to guarantee up to 511,292 Euro ($584,612 US) as security for an
additional cash credit facility of the Company's German joint venture. There was
250,000 Euro ($285,850 US) guaranteed by the Company under this additional cash
credit facility at June 30, 2003.

         Accounts payable decreased 15.85% at June 30, 2003 to $2,129,440
compared to $2,530,549 at June 30, 2002. The decrease for the quarter was the
result of the Company beginning to level out its production process and related
manufacturing payables, resulting from the Company's new Pre-Season order
program offered to its dealers, which was slightly offset by some extended term
payables provided by some of the Company's principal suppliers.

         Accrued expenses and other current liabilities increased 21.94% at June
30, 2003 to $1,318,430 compared to $1,081,200 at June 30, 2002. The increase for
the quarter was the result of increased dealer incentives resulting from the
Company's new Pre-Season order program, which were offset by lower payroll and
benefit costs from sales staff reductions made late in 2002.






                                       22
<PAGE>

         The following table outlines the Company's future contractual
obligations by type:

                                          Payments due by period
                        --------------------------------------------------------
Contractual                          Less than                        More than
Obligations                Total       1 year   1-3 years  3-5 years   5 years
                        --------------------------------------------------------

Long-term debt           $1,347,648   $190,989   $203,912   $148,848   $803,899
Capital lease obligation    $10,821    $10,821         $0         $0         $0
Operating leases           $268,481     $9,132    $40,181    $43,834   $175,334
Purchase obligations             $0         $0         $0         $0         $0
                        --------------------------------------------------------
Total                    $1,626,950   $210,942   $244,093   $192,682   $979,233
                        --------------------------------------------------------


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Market risk is the exposure to loss resulting from changes in interest
rates, foreign currency exchange rates, commodity prices and equity prices. The
primary market risk to which the Company is exposed is interest rates.

         The Company's exposure to changes in interest rates is minimal.
Primarily all of the Company's long-term debt is fixed rate. The Company's line
of credit is based on the prime rate plus 1 3/4%.


ITEM 4. CONTROLS AND PROCEDURES.

     In accordance with the Securities Exchange Act of 1934 Rules 13a-15 and
     15d-15, the Company's management, under the supervision of the Chief
     Executive Officer and Chief Financial Officer, conducted an evaluation of
     the effectiveness of the design and operation of the Company's disclosure
     controls and procedures as of the end of the period covered by this report.
     Based on that evaluation, the Chief Executive Officer and Chief Financial
     Officer concluded that the design and operation of the Company's disclosure
     controls and procedures were effective. There has been no change in the
     Company's internal controls over financial reporting that occurred during
     the Company's last fiscal quarter that has materially affected, or is
     reasonably likely to materially affect, the Company's internal control over
     financial reporting.




                                       23
<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

         The Company is a defendant in an alleged patent infringement lawsuit,
Versa Corporation v. Ag-Bag International Ltd., filed October 30, 2000 in the
United States District Court for the District of Oregon. The claim alleges
patent infringement upon Versa's U.S. Patent Nos. 5,799,472; 5,894,713;
5,345,744; 5,426,910; and 5,452,562 relating to a bag pan and density control
patent for an agricultural feed bagging machine and composting method patents.
Plaintiff seeks monetary damages. On April 2, 2002, the defendant was granted
its motion for summary judgment in the bag pan matter. The court concluded that
there was no infringement. Plaintiff appealed this decision. On May 30, 2003 the
U.S. Court of Appeals for the Federal Circuit, denied Versa's appeal. In the
composting method patent, the U.S. District Court recently interpreted Versa's
patent claims in a way that was virtually impossible for Ag-Bag to infringe.
Plaintiff's acknowledged the adversity of this ruling, asked the court to enter
judgment against Plaintiff, and Plaintiff is now appealing the court's
construction of the patent claims.

         On March 19, 2003, the Company received another alleged patent
infringement lawsuit, Versa Corporation v. Ag-Bag International Ltd., filed
March 11, 2003 in the United States District Court for the District of Oregon.
The claim alleges patent infringement upon Versa's U.S. Patent No.RE38020
relating to an adjustable anchor wing for an agricultural bagging machine.
Plaintiff seeks royalty payments as monetary damages. Discovery on this matter
is just beginning and the Company is vigorously defending itself against this
claim.

         The Company is one of three defendants named in a purported class
action lawsuit, S&S Forage & Equipment Co., Inc. v. Up North Plastics, et al.,
filed February 5, 1998, alleging conspiracy to fix prices and sales quotas
involving silage bag manufacturers and vendors. Class certification was denied
in this case. The defendants briefed and argued motions for summary judgment
which the court denied. Furthermore, the plaintiffs filed a motion before the
court appealing the May 2000 denial of class certification and in November 2002,
the U.S. District Court for the District of Minnesota denied the plaintiffs'
motion. On May 23, 2003, plaintiffs dismissed their complaint in its entirety
with prejudice, thereby concluding this litigation.


















                                       24
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         An Annual Meeting of Stockholders was held on June 2, 2003.

         Arthur P. Schuette and James C. DeMatteo were elected by plurality as
directors of the Company. Messrs. Inman, Cunningham, Weber and Foster continued
to serve as Directors after the meeting.

         The Board of Directors' appointment of Moss Adams LLP as the Company's
independent public accountants was ratified.

The results of the election were as follows:

                                           Votes
                                       Withholding
       Nominee          Votes For       Authority

Arthur P. Schuette     9,971,901          5,675
James C. Dematteo      9,971,901          5,675

                                          Votes                     Broker
                       Votes For         Against     Abstentions   Non-Votes

Ratify Appointment     9,828,446         159,000        2,555        -0-
 of Moss Adams LLP


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits:

          31.1      Rule 13a-14(a)/15d-14(a) Certification of Chief
                    Executive Officer

          31.2      Rule  13a-14(a)/15d-14(a)  Certification  of  Chief
                    Financial Officer

          32.1      Section 1350 Certification of Chief Executive Officer

          32.2      Section 1350 Certification of Chief Financial Officer

         (b) Reports on Form 8-K.

         No reports on Form 8-K were filed by the Company during the quarter
ended June 30, 2003.





                                       25
<PAGE>
                           SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                             AG-BAG INTERNATIONAL LIMITED,
                             a Delaware corporation
                                 (Registrant)



Date: August 12, 2003          By: /s/ Michael R. Wallis
                                   ---------------------------
                                   Michael R. Wallis
                                   Chief Financial Officer and
                                    Vice President of Finance

                                  (duly authorized and principal
                                   financial officer)




































                                       26
<PAGE>
                                  EXHIBIT INDEX


Exhibit
Number            Description of Exhibit
------            ----------------------


31.1              Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
                  Officer

31.2              Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
                  Officer

32.1              Section 1350 Certification of Chief Executive Officer

32.2              Section 1350 Certification of Chief Financial Officer











































                                       27

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>2
<FILENAME>ab_q30630x31.txt
<DESCRIPTION>CERTIFICATIONS
<TEXT>
                                                                    Exhibit 31.1
                                  Certification

I, Michael J. Schoville, certify that:

1.            I have reviewed this quarterly report on Form 10-Q of Ag-Bag
              International Limited;

2.            Based on my knowledge, this report does not contain any untrue
              statement of a material fact or omit to state a material fact
              necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other
              financial information included in this report, fairly present in
              all material respects the financial condition, results of
              operations and cash flows of the registrant as of, and for, the
              periods presented in this report;

4.            The registrant's other certifying officers and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-15(e) and
              15d-15(e)) for the registrant and have:

a)            designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;
b)            evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and
c)            disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              fiscal quarter in the case of an annual report) that has
              materially affected, or is reasonably likely to materially affect,
              the registrant's internal control over financial reporting; and

5.            The registrant's other certifying officers and I have disclosed,
              based on our most recent evaluation of internal control over
              financial reporting, to the registrant's auditors and the audit
              committee of registrant's board of directors (or persons
              performing the equivalent functions):
a)            all significant deficiencies and material weaknesses in the design
              or operation of internal controls over financial reporting, which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and
b)            any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.


Date: August 12, 2003

/s/MICHAEL J. SCHOVILLE
-----------------------
Chief Executive Officer
<PAGE>
                                                                    Exhibit 31.2
                                  Certification

I, Michael R. Wallis, certify that:


1.            I have reviewed this quarterly report on Form 10-Q of Ag-Bag
              International Limited;

2.            Based on my knowledge, this report does not contain any untrue
              statement of a material fact or omit to state a material fact
              necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading with respect to the period covered by this report;

3.            Based on my knowledge, the financial statements, and other
              financial information included in this report, fairly present in
              all material respects the financial condition, results of
              operations and cash flows of the registrant as of, and for, the
              periods presented in this report;

4.            The registrant's other certifying officers and I are responsible
              for establishing and maintaining disclosure controls and
              procedures (as defined in Exchange Act Rules 13a-15(e) and
              15d-15(e)) for the registrant and have:

a)            designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;
b)            evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and
c)            disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's most recent fiscal quarter (the registrant's fourth
              fiscal quarter in the case of an annual report) that has
              materially affected, or is reasonably likely to materially affect,
              the registrant's internal control over financial reporting; and

5.            The registrant's other certifying officers and I have disclosed,
              based on our most recent evaluation of internal control over
              financial reporting, to the registrant's auditors and the audit
              committee of registrant's board of directors (or persons
              performing the equivalent functions):
a)            all significant deficiencies and material weaknesses in the design
              or operation of internal controls over financial reporting, which
              are reasonably likely to adversely affect the registrant's ability
              to record, process, summarize and report financial information;
              and
b)            any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal control over financial reporting.


Date: August 12, 2003

/s/MICHAEL R. WALLIS
------------------------
Chief Financial Officer, Treasurer
and Vice President of Finance



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>3
<FILENAME>ab_q30630x32.txt
<DESCRIPTION>CERTIFICATIONS
<TEXT>
                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Ag-Bag International Limited (the
"Company") on Form 10-Q for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge:

         (1)      The Report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.




August 12, 2003                 /s/ MICHAEL J. SCHOVILLE   Chief Executive
                                ------------------------      Officer
                                    (Michael J. Schoville)



<PAGE>

                                                                    EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Ag-Bag International Limited (the
"Company") on Form 10-Q for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of
my knowledge:

         (1)      The Report fully complies with the requirements of section
                  13(a) or 15(d) of the Securities Exchange Act of 1934; and

         (2)      The information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company.



August 12, 2003                /s/ MICHAEL R. WALLIS  Chief Financial Officer,
                               ---------------------  Vice President of Finance,
                                (Michael R. Wallis)   and Treasurer


</TEXT>
</DOCUMENT>
</SUBMISSION>
