EMPLOYMENT AGREEMENT

        This Employment Agreement is made effective as of March 1, 2000 between
Farmland Industries, Inc., a Kansas cooperative corporation (the “Company”) and
H. D. Cleberg, who is presently the President and Chief Executive Officer of the
Company, (“Executive”) and supersedes the Employment Agreement between the
parties dated May 1, 1999, which is hereby terminated in its entirety.

        WHEREAS, Executive is the principal officer of the Company and an
integral part of its management and the Company desires to retain the services
of Executive.

        NOW THEREFORE, it is hereby agreed by and between the parties as
follows:

1. Employment. The Company hereby employs Executive as Chief Executive Officer
and Executive hereby accepts employment with the Company, subject to the terms
and conditions hereinafter provided.

2. Term. The employment of Executive hereunder will be for the period commencing
on the effective date of this Agreement and ending on December 31, 2002,
provided, however, that either party may terminate the employment relationship
prior to the expiration date as hereinafter provided.

3. Position, Duties, Responsibilities. The employment of Executive hereunder
will be for the period commencing on the effective date of Executive shall be
employed as the Chief Executive Officer. Executive shall exercise authority and
perform duties and services consistent with such position as may be assigned to
him from time to time by the Board of Directors (the "Board").

4. Devotion of Time and Best Efforts. Except for vacations and absences due to
temporary illness, Executive shall devote his full time, best efforts and
undivided attention and energies during his employment to the performance of his
duties and to advance the Company’s interests, as determined by the Board.
During his employment, Executive shall not, without the prior approval of the
Board, be engaged in any other business activity which conflicts with the duties
of Executive hereunder, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage. Executive may continue his current
civic and charitable activities and his current service on various boards.

5. Early Termination.

(a) Death. Executive's employment shall terminate upon Executive's death.

(b) Termination by the Company.

.

  (1) Request For Resignation. The Company, by action of the Board, may request
Executive’s resignation at any time and for any reason whatsoever, without
cause, effective in accordance with the delivery of a written request for
resignation to Executive or in accordance with the terms of a Board-approved
Chief Executive Officer succession decision.

  (2) For Cause. The Company, by action of the Board, may terminate the
Executive’s employment at any time for Cause, effective upon delivery of written
notice of termination to Executive. If such termination by the Company is
asserted to be for Cause, such termination notice shall state the grounds that
the Board claims constitute Cause.

  As used herein, “Cause” shall mean (a) willful misconduct by Executive which
is damaging or detrimental to the business and affairs of the Company,
monetarily or otherwise, as determined by the Board in the exercise of its good
faith business judgment; (b) a material breach of this Agreement by Executive,
(c) chronic alcoholism or any other form of substance addiction on the part of
Executive, (d) the commission by Executive of any act involving fraud or
dishonesty or moral turpitude, (e) the indictment for, being bound over for
trial following a preliminary hearing, or the conviction of Executive of any
felony in either a state or federal court proceeding, or (f) willful refusal to
implement policies promulgated by the Board.

  (3) Disability. The Company, by action of the Board, may terminate the
Executive’s employment if Executive sustains a disability which is serious
enough that Executive is not able to perform the essential functions of
Executive’s job, with or without reasonable accommodations, as defined and if
required by applicable state and federal disability laws. Executive shall be
presumed to have such a disability for purpose of this Agreement if Executive
qualifies, because of illness or incapacity, to begin receiving disability
income insurance payments under the long-term disability income insurance policy
that Company maintains for the benefit of Executive. If there is no such policy
in effect at the date of Executive’s potential disability, or if Executive does
not qualify for such payments, Executive shall nevertheless be presumed to have
such a disability if Executive is substantially incapable of performing
Executive’s duties for a period of more than twelve (12) weeks.

(c) Termination by Executive.

  (1) Voluntary Resignation. Executive may terminate the Employment Period and
Executive's employment at any time and for any reason whatsoever, effective upon
delivery of written notice of termination to the Company.

  (2) Good Reason Resignation. Executive may terminate the Employment Period and
Executive’s employment at any time for Good Reason, effective upon delivery of
written notice of termination to the Company. If such termination by Executive
is asserted to be for “Good Reason”, such termination notice shall state the
grounds that Executive claims constitute Good Reason. As used herein “Good
Reason” shall mean a material breach of this Agreement by the Company, or a
demotion such that Executive does not serve as the Chief Executive Officer of
the Company.

6. Compensation.

(a) Base Salary. During his employment, the Company shall pay Executive an
initial “Base Salary” at the rate of Six Hundred, Thirty-Five Thousand, Six
Hundred Dollars ($635,600) per year, payable in accordance with the Company’s
regular payroll practices and policies which are in effect from time to time.
The Board shall annually review the amount of Base Salary. Such review and any
increase shall occur on the current customary schedule. Any such upward
adjustment shall not require a written amendment to this Agreement and shall not
affect any other provisions of this Agreement, which shall remain in effect
unless changed by a written amendment to this Agreement or terminated by either
party as provided herein.

(b) Annual Variable and Long-Term Incentive Compensation. During his employment,
Executive shall be entitled to receive compensation under the annual Variable
Compensation Plan and the Management Long-Term Incentive Plan payable within the
current customary time frame on terms that are no less favorable to Executive
than the terms currently in existence. In the event that either of these plans
is discontinued or amended effective during his employment, and the amount of
variable compensation due Executive under the replacement or amended plans is
less than Executive would have received under the current plans, the Executive
shall be entitled to receive the amount of variable compensation that would have
been payable under the current plans.

7. Benefit Plans.

(a) General. During the Employment Period, Executive shall be eligible to
participate in all executive compensation and employee benefit plans or programs
generally applicable to senior management employees of the Company pursuant to
the terms and conditions of such plans and programs. Nothing contained in this
Agreement shall preclude the Company from terminating or amending any such plan
or program.

(b) Qualified Plans. Executive shall be entitled to Company contributions and
benefits with respect to Base Salary under the Company’s qualified pension plans
determined in the same manner as for other participants in those plans, subject
to any contribution or benefit limitations. However, if such plans as in effect
on the date of execution of this Agreement are modified in a manner, which will
reduce future benefits under those plans for Executive, then, as a means to make
up for those reductions, the Company shall establish a new nonqualified plan or
amend an existing nonqualified plan which shall provide for any lost benefits
under the Company’s pension plan.

(c) Nonqualified Plans.

  (1) Deferred Compensation Plan. Executive shall continue to be eligible to
participate in the Deferred Compensation Plan. If this plan should be amended or
terminated prior to the end of the Employment Period, the terms of the plan will
be maintained with respect to Executive, unless Executive agrees to accept the
modified provisions of a revised plan or a new plan intended to replace the
plan.

  (2) Supplemental Executive Retirement Plan. Executive will be entitled to
benefits under this plan on terms no less favorable than those set forth in the
restatement of the plan that became effective in 1999; however, if this plan
should be amended or terminated prior to the completion of payments under it to
Executive, the terms of the plan will be maintained with respect to Executive,
unless Executive agrees to accept the modified provisions of a revised plan or a
new plan intended to replace that restatement.

8. Post-Termination Payments by the Company.

(a) Resignation Requested by Company or Resignation for Good Reason. In the
event that Executive's employment is terminated prior to December 31, 2002 by
the Company through a Request for Resignation or by Executive for Good Reason,
and the Executive:

      1) signs (and does not rescind, as allowed by law) a Release of Claims in
a form satisfactory to the Company which assures, among other things, that
Executive will not commence any type of litigation or other claims as a result
of his employment or termination of employment;

      2) agrees to be available to consult with the Company at no additional
compensation, other than reimbursement of costs, an average of forty (40) hours
per month for one year following his termination; and

      3) honors all of Executive's other obligations as required by this
Agreement.

The Company will provide Executive a severance benefit ("the Severance Benefit”)
by assisting Executive in purchasing life insurance under a split dollar
agreement. Under the split dollar agreement, the Company will pay premiums
having a present value cost to the Company (calculated using an 8% discount
rate) equal to two times Executive’s average annual income from the Company
included in Executive’s gross income for the five calendar years ending December
31, 1999. The Severance Benefit shall not be considered as income or
compensation in determining Executive’s benefits under any non-qualified benefit
plan, including the Supplemental Executive Retirement Plan. In addition, if such
Request for Resignation or Good Reason Resignation results in termination prior
to December 31, 2000, the Company will continue to pay Executive all of the
compensation provided for in Paragraph 6 of this Agreement as if he had remained
employed through December 31, 2000 provided that Executive agrees to be
available for consulting on a regular, full time basis through December 31,
2000..

(b) Termination For Cause, or Voluntary Resignation. If Executive’s employment
is terminated prior to December 31, 2002 by the Company for Cause or by
Executive as a Voluntary Resignation, Executive shall be entitled only to his
rights (a) to receive the unpaid portion of his Base Salary, prorated to the
date of termination, (b) to receive reimbursement for any ordinary and
reasonable business expenses for which he had not yet been reimbursed, (c) to
receive payment for accrued and unused vacation days, (d) to receive his
incentive compensation for each full or partial (on a pro rata basis) year
during which he was employed, to the extent earned and accrued, pursuant to the
terms and conditions of the applicable incentive compensation plan(s), (e) to
receive payments under the Company’s pension, profit sharing, deferred
compensation or other benefit plans in which the Executive has participated, all
to the extent and in accordance with the terms of such plans, and (f) to
continue certain health insurance at his expense pursuant to COBRA.

9. Consulting. If Executive qualifies for the Severance Benefit , Executive
agrees to make himself available to the Company as needed to consult for a
period of one year following termination of employment. Such consulting shall be
without additional compensation, other than reimbursement of expenses, up to an
average of forty (40) hours per month. Executive shall be entitled to reasonable
compensation for his time in providing such consulting services to the extent he
provides services in excess of an average of forty (40) hours per month.

10. Other Executive Obligations. Executive agrees that the following provisions
will apply throughout Executive’s period of active or inactive employment, and
will continue to apply even if Executive’s employment and the Employment Period
are terminated under Paragraph 5, regardless of the reason for termination:

(a) Nondisclosure of Confidential Information. Except to the extent required in
furtherance of the Company’s business in connection with matters as to which
Executive is involved as an employee, Executive will not, during the term of his
employment and for an unlimited period thereafter, directly or indirectly: (1)
disclose or furnish to, or discuss with, any other person or entity any
confidential information concerning the Company or its business or employees,
acquired during the period of his employment by the Company; (2) individually or
in conjunction with any other person or entity, employ or cause to be employed,
any such confidential information in any way whatsoever or (3) without the
written consent of the Company, publish or deliver any copies, abstracts or
summaries of any papers, documents, lists, plans, specifications or drawings
containing any such confidential information.

(b) Non-Interference. Executive will not, during the term of his employment and
for an unlimited period thereafter, directly or indirectly attempt to encourage,
induce or otherwise solicit any employee or other person or entity to breach any
agreement with the Company or otherwise interfere with the advantageous business
relationship of the Company with any person or entity. Executive specifically
agrees not to solicit, on Executive’s own behalf or on behalf of another, any of
the Company’s employees to resign from their employment with the Company in
order to go to work elsewhere. Executive further specifically agrees not to make
any disparaging remarks of any sort or otherwise communicate any disparaging
remarks about the Company or any of its members, equity holders, directors,
officers or employees, directly or indirectly, to any of the Company’s
employees, members, equity holders, directors, customers, vendors, competitors,
or other people or entities with whom the Company has a business or employment
relationship.

(c) Non-Competition. Executive agrees that during the term of his employment and
thereafter for a period of two (2) years, Executive will not directly or
indirectly engage in or carry on a business that is in direct competition with
any significant business unit of the Company as conclusively determined by the
Board of Directors. Further, Executive agrees that during this same period of
time he will not act as an agent, representative, consultant, officer, director,
independent contractor or employee of any entity or enterprise that is in direct
competition with any significant business unit of the Company as conclusively
determined by the Board of Directors.

(d) Cooperation in Claims. During the term of his employment and for an
unlimited period thereafter, at the request of the Company, Executive will
cooperate with the Company with respect to any claims or lawsuits by or against
the Company where Executive has knowledge of the facts involved in such claims
or lawsuits. Executive shall be entitled to reasonable compensation for
Executive’s time and expense in rendering such cooperation. Further, Executive
will decline to voluntarily aid, assist or cooperate with any party who has
claims or lawsuits against the Company, or with their attorneys or agents. The
Company and Executive both acknowledge, however, that nothing in this paragraph
shall prevent Executive from honestly testifying at an administrative hearing,
arbitration, deposition or in court, in response to a lawful and properly served
subpoena in a proceeding involving the Company.

(e) Remedies. The parties recognize and agree that, because any breach by
Executive of the provisions of this Paragraph 9 would result in damages
difficult to ascertain, the Company shall be entitled to injunctive and other
equitable relief to prevent a breach or threatened breach of the provisions of
this Paragraph 9. Accordingly, the parties specifically agree that the Company
shall be entitled to temporary and permanent injunctive relief to enforce the
provisions of this Paragraph 9, that such relief may be granted without the
necessity of proving actual damages. The parties further agree that the right to
such relief shall be in lieu of any right to recover money damages for any such
breach.

(f) Enforceability. Executive agrees that considering Executive’s relationship
with the Company, and given the terms of this Agreement, the restrictions and
remedies set forth in Paragraph 9 are reasonable. Notwithstanding the foregoing,
if any of the covenants set forth above shall be held to be invalid or
unenforceable, the remaining parts thereof shall nevertheless continue to be
valid and enforceable as though the invalid or unenforceable parts have not been
included therein. In the event the provisions relating to time periods and/or
areas of restriction shall be declared by a court of competent jurisdiction to
exceed the maximum time periods or areas of restriction permitted by law, then
such time periods and areas of restriction shall be amended to become and shall
thereafter be the maximum periods and/or areas of restriction which said court
deems reasonable and enforceable. Executive also agrees that the Company’s
action in not enforcing a particular breach of any part of Paragraph 9 will not
prevent the Company from enforcing any other breaches that the Company
discovers, and shall not operate as a waiver by the Company against any future
enforcement of a breach.

11. Notices. Notices hereunder shall be in writing and shall be delivered
personally or sent return receipt requested and postage prepaid, addressed as
follows:

   If to Executive:                   H.D. Cleberg
                                                     c/o Farmland Industries, Inc.
                                                     3315 North Oak Trafficway
                                                     Kansas City, MO 64116

         If to the Company:                          Chairman of the Board
                                                     c/o Corporate Secretary
                                                     Farmland Industries, Inc.
                                                     3315 North Oak Trafficway
                                                     Kansas City, MO 64116

         with a copy to:                             Vice President and General Counsel
                                                     Farmland Industries, Inc.
                                                     3315 North Oak Trafficway
                                                     Kansas City, MO 64116

12. Assignment. This Agreement is personal in its nature and the parties hereto
shall not, without the consent of the other, assign or transfer this Agreement
or any rights or obligations hereunder.

13. Binding Agreement. The provisions of this Agreement shall be binding upon,
and shall inure to the benefit of, the respective heirs, legal representatives
and successors of the parties hereto.

14. Missouri Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri, unless otherwise pre-empted
by federal law.

15. Captions and Section Headings. Captions and paragraph headings used herein
are for convenience only and are not a part of this Agreement and shall not be
used in construing it.

16. Invalid Provisions. If any provision of this Agreement shall be unlawful,
void, or for any reason unenforceable, it shall be deemed severable from, and
shall in no way affect the validity or enforceability of, the remaining
provisions of this Agreement.

17. Waiver of Breach. The failure to enforce at any time any of the provisions
of the Agreement, or to require at any time performance by the other party of
any of the provisions hereof, shall in no way be construed to be a waiver of
such provisions or to affect either the validity of this Agreement or any part
hereof or the right of either party thereafter to enforce each and every
provision in accordance with the terms of this Agreement.

18. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties
with respect thereto. No modification or amendment of any of the provisions of
this Agreement shall be effective unless in writing specifically referring
hereto and signed by Executive and a member of the Board upon authorization of
the Board to do so.

        IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date set forth above.

EXECUTIVE                                            FARMLAND INDUSTRIES, INC.

________________________________    By:     ______________________________
H. D. Cleberg                                                 Albert Shivley, Chairman of the
                                                              Board of Directors

                                                     By:      ______________________________
                                                              Jody Bezner, Vice-Chairman of the
                                                              Board of Directors