EMPLOYMENT AGREEMENT



     This Employment Agreement is made effective as of May 1, 1999 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").

     WHEREAS;

          A.Executive is the principal officer of the Company and an integral
            part of its management.

          B.The Company is contemplating the possible full consolidation of its
            business with the business of Cenex Harvest States Cooperatives
            ("CHS") through a merger or other similar transaction (the
            "Consolidation") and desires to assure both itself and Executive of
            continuity in the event of the Consolidation.

          C.This Employment Agreement is intended to provide to Executive,
            either a severance benefit in the event that his employment
            terminates under certain circumstances, as described herein, prior
            to December 31, 2000 or a transaction incentive payment if the
            Company successfully completes the Consolidation on or before
            December 31, 2000.

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

          1.Employment.  The Company hereby employs Executive 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, 2000, provided, however, that either party may
            terminate the employment relationship prior to the expiration date
            as hereinafter provided.  In the event of the Consolidation,
            Executive hereby agrees to tender his written resignation effective
            December 31, 2000.

          3.Position, Duties, Responsibilities.  Executive shall be employed as
            the Chief Executive Officer or, in the event of the Consolidation,
            may be employed as a co-Chief Executive Officer of the Consolidated
            Company.  Executive shall exercise such authority and perform such
            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)Without Cause.  The Company, by action of the Board, may
                      terminate Executive's employment, at any time and for any
                      reason whatsoever, without cause, effective upon delivery
                      of written notice of termination to Executive.

                   (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.  A demotion such that
                      Executive does not serve as the Chief Executive Officer,
                      or Co-Chief Executive Officer of the Company shall
                      constitute "Good Reason".

          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,
                 commencing on the effective date of this Agreement, 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 effective January 1, 1997; 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.Terminations Without Cause or Resignation for Good Reason.  In
                 the event that  Executive's employment is terminated prior to
                 December 31, 2000 by the Company without Cause or by Executive
                 for Good Reason, and the Executive 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 the termination, and honors all of
                 Executive's other obligations as required by this Agreement,
                 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. In
                 addition, Executive will be entitled to a Severance Payment
                 ("Severance Pay") in an amount equal to 2.99 x 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 Pay shall be paid on or before January
                 31, 2001.  Severance Pay 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 no event will Executive be
                 entitled to both Severance Pay and a Transaction Incentive.

               b.Termination For Cause, or Voluntary Resignation.  If
                 Executive's employment is terminated prior to December 31,
                 2000 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.

               c.Transaction Incentive.  If the Company and CHS complete the
                 Consolidation prior to December 31, 2000 and Executive remains
                 actively employed through December 31, 2000, Executive shall
                 become entitled to an incentive payment of 2.99 x his average
                 annual income from the Company includable in Executive's gross
                 income for the five calendar years ending December 31, 1999
                 (the "Transaction Incentive"). In the event that Executive's
                 employment is terminated by death or disability after the
                 Consolidation, Executive or Executive's estate shall be paid
                 the full Transaction Incentive.  In the event that Executive's
                 employment is terminated by death or disability prior to the
                 Consolidation, Executive, Executive's estate or any
                 beneficiary designated by Executive shall be entitled to a
                 partial Transaction Incentive, prorated for the period of his
                 employment between May 1, 1999 and the closing of the
                 Consolidation.  (For example, if Executive is terminated for
                 one of these reasons on November 30, 1999 and the
                 Consolidation occurs on June 1, 2000, Executive or Executive's
                 estate would be entitled to 7/13 of the Transaction
                 Incentive.) The Transaction Incentive shall be paid on or
                 before January 31, 2001.  The Transaction Incentive 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.

               d.Severance Pay or Transaction Incentive Limitation.  The amount
                 of Severance Pay or Transaction Incentive provided for herein
                 shall be reduced to the extent necessary to avoid any portion
                 thereof becoming non-deductible under Section 280 G of the
                 Internal Revenue Code of 1986, as amended from time to time,
                 or giving rise to excise tax under Section 4999 of the
                 Internal Revenue Code of 1986, as amended from time to time.

          9.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
                 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.

          10.Notices.  Notices hereunder shall be in writing and shall be
             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

         11.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;
            provided, however, that the provisions hereof shall inure to the
            benefit of, and be binding upon each successor in a change of
            control of the Company, whether by merger, consolidation, transfer
            of all or substantially all assets, sale or otherwise (and such
            successor shall thereafter be deemed the "Company" for purposes of
            this Agreement).

         12.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.

         13.Missouri Law.  This Agreement shall be governed by and construed in
            pre-empted by federal law.

         14.Captions and Section Headings.  Captions and paragraph headings
            Agreement and shall not be used in construing it.

         15.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.

         16.Waiver of Breach.  The failure to enforce at any time any of the
            provisions of this 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.

         17.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.


  /s/  H. D. CLEBERG                    By:    /s/  ALBERT SHIVLEY
_____________________							          	_______________________________
H. D. Cleberg                                Albert Shivley, Chairman of the
                                             Board of Directors

                                        By:    /s/  JODY BEZNER
                    													      _______________________________
                                             Jody Bezner, Vice-Chairman of the
                                             Board of Directors