May 14--The road to prosperity for Oklahoma farmers might have been paved decades ago in the frosty fields of Minnesota.

Capitalizing on ethanol's promise was an elusive dream in the Gopher State until brave farmers like David Kolsrud came around.

The fourth-generation farmer is business development manager of CORN-er Stone Farmers Cooperative in Luverne, Minn. The co-op processes corn into ethanol through Agri-Energy LLC.

During his presentation in Oklahoma City at the recent Governor's Conference on Agriculture and Economic Development, Kolsrud said Minnesota has succeeded in boosting production of ethanol and passing the benefits down to farmers.

Twelve of 13 ethanol plants are owned by farmers, and collectively the plants generate $165 million a year.

During the mid-1990s, Minnesota became one of the earliest states to create markets and incentives for farmers to invest in ethanol facilities.

More than 200 people invested in the AgriEnergy Plant, located in southwestern Minnesota, near the border with Iowa.

"The (U.S. Department of Agriculture) is taking huge stock in farmer ownership of renewable energy," said Kolsrud, who has invested in 11 ethanol plants across the nation, as well as wind farms.

"That means farmers don't just end up supplying the corn."

But building the plant in Luverne, a small town of about 5,000, wasn't easy. In fact, the project was almost abandoned because of the difficulty raising $21 million in capital requirements.

More than 200 farmers had pledged about $15,000 each, but they were still $6 million short. Only help in the form of a USDA loan guarantee, financing from local banks, tax breaks and $4 million in personal guarantees from farmers secured the project.

AgriEnergy opened in 1998, and it's been a roaring success, Kolsrud said. The plant processes 21 million gallons of ethanol a year, most of which is shipped by rail to Los Angeles.

He said the plant is generating $12 million a year for farmers, and has an estimated economic impact of $30 million a year in and around Rock County in Minnesota.

Kolsrud estimated AgriEnergy has given back to investors over five times their original investment, and the value of their stock also has shot up.

Another benefit, he said, is that more educated young people are staying in rural Minnesota to work.

Whether corn prices are high or low, or gas prices are high or low, farmers entrenched in ethanol can stay afloat, Kolsrud said.

"We're hedged against some of our costs, which is what we can't control," Kolsrud told farmers during the conference.

One reason Oklahoma can play a major role in ethanol production, Kolsrud said, is its prominent cattle industry.

A lot of ethanol plants are being built closer to ranches today because byproducts from ethanol production -- called distiller's feed -- can be fed to cattle.

This summer, construction of Oklahoma's first ethanol plant will begin in Enid. The $80 million plant will produce at least 50 million gallons of ethanol a year.

Oklahoma is already becoming a player in the biodiesel production industry. And last week, officials celebrated the opening of another wind farm. The state is on its way to a $1 billion investment in wind energy, officials said.

Kolsrud believes Oklahoma farmers are progressive, and they can capitalize on the renewable energy market. But they should push for locally- or farmer-owned projects so the money is circulated in their communities.

"You have a huge opportunity here," he said.