The farmers organization will proceed with plans to form a cooperative and buy Michigan Sugar Co., officials for both decided during a meeting Monday.

The state has pledged aid to help farmers with the purchase.

The industry hit tough times after Texas-based Imperial Sugar Co. purchased the four Michigan Sugar plants in Carrollton Township, Caro, Sebewaing and Croswell, as well as its Saginaw Township offices, then filed Chapter 11 bankruptcy in January.

Farmers in the Great Lakes Sugar Beet Growers Association and Michigan Sugar officials rallied together, forging plans to raise and process the 2001 crop without other investment dollars.

Next they will form a sugar cooperative, starting with the 2002 crop.

This year, farmers signed contracts without paying the $200 co-op subscription fee, said Richard Leach Jr., executive vice president for the Saginaw Township-based Great Lakes Sugar Beet Growers Association, which represents 1,400 farmers. Next year, they will pay the fee.

Imperial will sell Michigan Sugar to the cooperative for $55 million in cash, a $10 million deferred-payment note to Imperial and a transfer of debt in the form of industrial development bonds, he said.

The state has offered a $5 million interest-free loan for five years to help farmers come up with their $22 million equity portion of the purchase.

That leaves the cooperative to raise $17 million for the down payment, with Michigan National Bank supplying the rest.

Imperial's debt is $18.5 million but could drop to half that amount during negotiations in bankruptcy court, Leach said. 

Dean Bohn is a staff writer for The Saginaw News. You may reach him at 776-9679.