EMPLOYMENT AGREEMENT




     THIS AGREEMENT is made effective as of June 7, 1999 by and between Robert
Honse (hereafter "Honse") and Farmland Industries, Inc., a Kansas cooperative
corporation (together with all affiliates, the "Company").

     WHEREAS, Honse is an integral part of the Company's management; and

     WHEREAS, the Company is contemplating the possible full consolidation of
its business with the business of Cenex Harvest States Cooperatives through a
merger or other similar transaction (the "Consolidation") and desires to assure
both itself and Honse of continuity in the event of the Consolidation;

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


1.   Employment


The Company hereby agrees to, and does hereby, employ Honse as Executive Vice
President and Chief Operating Officer, and Honse hereby agrees to accept
employment with the Company in such position upon the other terms and conditions
set forth in this Agreement. It is understood that the Company or its successor
may appoint Honse to a different position, and that Honse may accept such a
position, subject to the other terms and conditions set forth in this Agreement.

2.   Period of Employment; Termination of Agreement

The period of employment shall commence on the date of this Agreement and
continue through December 31, 2000.  In the event of the Consolidation, the
period of employment shall continue for a rolling three (3) year period,
provided that Honse's employment may be earlier terminated by either party
subject to the rights and obligations of the parties set forth herein.

3.   Performance

Throughout the period of employment, Honse agrees to devote his full time and
attention during normal business hours to the business of the Company, except
for earned vacations and except for illness or incapacity.

4.   Compensation

		     (a)  For all services to be rendered by Honse in any capacity during the
period of employment, Honse shall be paid as annual compensation a base salary
of at least $481,224.00.  The Company will annually review Honse's annual
compensation and determine what is appropriate for a cost of living increase,
merit increase, and/or increase related to a change in Honse's responsibilities
or duties.

     (b)  During the term of his employment hereunder, Honse shall be eligible
to participate in all of the Company's variable pay programs.  Honse shall
further be entitled to any additional employee benefits separately made
available to him from time to time by the Company in its discretion.

     (c)  The Company shall bear such ordinary and necessary business expenses
incurred by Honse in performing his duties hereunder as the Company determines
from time to time, provided that Honse accounts promptly for such expenses to
the Company in the manner prescribed from time to time by the Company.

5.   Termination with Severance Allowance


     (a)  Termination by the Company Not for Cause.  In the event of termination
of the employment of Honse by the Company, prior to the applicable expiration
date, for any reason other than for cause, as defined in paragraph 6(a), death
or disability, the Company shall:

        (i) pay Honse a severance allowance in the amount of 2.99 times the
            "Annual Amount" as defined herein;

       (ii) continue his family health insurance for one (1) year; and

      (iii) continue his family health insurance thereafter up to age 65 (or
            any revised age for Medicare eligibility), upon Honse's payment of
            the retiree premium rate; provided that such coverage shall
            terminate if and when Honse becomes eligible for coverage, without
            any exclusions for preexisting conditions, through another group
            plan.

            Said severance allowance shall be in lieu of all other severance
            payable to Honse under Company severance policies.

     (b)  Termination by Honse if the Consolidation is closed on or before
December 31, 2000.  If the Consolidation is closed on or before December 31,
2000; and if (i) Honse is not offered the position of Chief Executive Officer of
the Company or its successor on or before June 1, 2001, or (ii) the Company or
its successor names someone other than Honse as its new Chief Executive Officer;
and if Honse thereafter resigns his employment on or before June 1, 2002, the
Company shall:

        (i) pay Honse a severance allowance in the amount of 1.99 times the
            "Annual Amount" as defined herein;

       (ii) continue his family health insurance for one (1) year; and

      (iii) continue his family health insurance thereafter up to age 65 (or
            any revised age for Medicare eligibility), upon Honse's payment of
            the retiree premium rate; provided that such coverage shall
            terminate if and when Honse becomes eligible for coverage, without
            any exclusions for preexisting conditions, through another group
            plan.

            Said severance allowance shall be in lieu of all other severance
            payable to Honse under Company severance policies.

     (c)  Additional Payments.  In the event that Honse becomes entitled to
payments under paragraphs 5(a), 5(b), or 7 of this Agreement, the Company shall
cause its independent auditors promptly to review, at the Company's sole
expense, the applicability of Section 4999 of the Code to such payments.  If
such auditors shall determine that any payment or distribution of any type by
the Company to Honse or for his benefit, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the
"Total Payments"), would be subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then Honse shall be entitled to receive an
additional cash payment (a "Gross-Up Payment") within 30 days of such
determination equal to an amount such that after payment by Honse of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Honse would retain
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total
Payments.  For purposes of the foregoing determination, Honse's tax rate shall
be deemed to be the highest statutory marginal state and Federal tax rate (on a
combined basis) (including Honse's share of F.I.C.A. and Medicare taxes) then in
effect.  If no determination by the Company's auditors is made prior to the time
a tax return reflecting the Total Payments is required to be filed by Honse, he
will be entitled to receive a Gross-Up Payment calculated on the basis of the
Total Payments reported by Honse in such tax return, within 30 days of the
filing of such tax return.  In all events, if any tax authority determines that
a greater Excise Tax should be imposed upon the Total Payments than is
determined by the Company's independent auditors or reflected in Honse's tax
return pursuant to this Section 6, Honse shall be entitled to receive the full
Gross-Up Payment calculated on the basis of the amount of Excise Tax determined
to be payable by such tax authority from the Company within 30 days of such
determination.

     (d)  Request and Release.  In order to obtain any severance allowance
provided for in this Agreement, Honse must submit a request for severance and
must sign a complete release of all claims.  The Company shall have no
obligation to pay any severance allowance unless and until Honse shall have
submitted the request for severance and signed a full and complete release of
all claims, to be drafted by Legal Counsel for the Company.

6.   Termination without Severance Allowance

     (a)  Termination by the Company for Cause.  The Company may terminate
Honse's employment for cause without incurring further obligation.  For the
purpose of this Agreement, termination of  Honse's employment shall be deemed to
have been for cause only:

        (i) if termination of  Honse's employment shall have been the result
            of an act or acts of fraud, theft or embezzlement on the part of
            Honse which, upon conviction, would constitute a felony and which
            results or which is intended to result directly or indirectly in
            gain or personal enrichment of Honse at the expense of the Company;
            or

       (ii) if termination of Honse's employment results from Honse's willful
            and material misconduct, including willful and material failure to
            perform his duties, and Honse has been given written notice by the
            Company with respect to such and Honse does not cure within a
            reasonable time; or

      (iii) if there has been a breach by Honse during the period of
            employment of the provisions of Paragraph 3 above, relating to the
            time to be devoted to the affairs of the Company, and with respect
            to any alleged breach of Paragraph 3 hereof, Honse shall have
            substantially failed to remedy such alleged breach within thirty
            days from Honse's receipt of notice from the Company.

     (b)  Nonrenewal of Agreement.  In the event of the Consolidation, except as
otherwise provided in paragraph 5(b) above, the Company may elect not to renew
this Agreement, and thereby to terminate Honse's employment hereunder without
any severance obligations, upon at least three (3) year's prior written notice
to Honse.

     (c)  Termination by Honse.  Honse shall have the right to terminate his
employment in his sole discretion, with or without cause, by providing thirty
(30) days notice of his intent to resign.  Except as otherwise provided in
paragraph 5(b) above,  Honse shall in that event receive no further compensation
or severance allowance.

     (d)  Death.  In the event of Honse's death during the period of employment,
the legal representative of Honse shall be entitled to the base or fixed salary
provided for in Paragraph 4(a) above for the month in which death shall have
occurred, at the rate being paid at the time of death, and the period of
employment shall be deemed to have ended as of the close of business on the last
day of the month in which death shall have occurred but without prejudice to any
benefits, such as life insurance, otherwise due in respect of Honse's death.

     (e)  Disability

        (i) In the event of Honse's disability during the period of
            employment, Honse shall be entitled to an amount equal to the base
            or fixed salary provided for in Paragraph 4(a) above, at the rate
            being paid at the time of the commencement of disability, for the
            period of such disability but not in excess of twelve (12) months
            from the beginning of the period that establishes such disability,
            as described in Paragraph 6(e)(iii) below.

       (ii) The amount of any payments due under Paragraph 6(e)(i) shall be
            reduced by any payments to which Honse may be entitled for the same
            period because of disability under any disability or pension plan
            of the Company or of any division, subsidiary, or affiliate
            thereof, or as the result of workers' compensation or
            nonoccupational disability payments received from any government
            entity.

      (iii) The term "Disability" as used in this Agreement, shall mean an
            illness or accident occurring during the period of employment which
            prevents Honse from performing the essential functions of his job
            under this Agreement, with reasonable accommodations (as defined by
            federal and Missouri disability laws), for a period of six
            consecutive months.  The period of employment shall be deemed to
            have ended as of the close of business on the last day of such six-
            month period but without prejudice to any payments due Honse from
            any disability policy or disability insurance.

7.   Transaction Incentive


If the Company and Cenex Harvest States Cooperatives complete the Consolidation
prior to December 31, 2000, and Honse has not by December 31, 2000 resigned or
been terminated for cause, Honse shall become entitled to a Transaction
Incentive payment in the amount of 1.0 x the Annual Amount as defined herein.
In the event that Honse's employment is terminated by death or disability after
the Consolidation, Honse, his estate, or his designated beneficiary shall be
paid the full Transaction Incentive.  In the event that Honse's employment is
terminated by death or disability prior to the Consolidation, Honse, his estate
or any beneficiary designated by Honse 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 Honse is terminated
for one of these reasons on November 30, 1999 and the Consolidation occurs on
June 1, 2000, Honse or his estate would be entitled to 7/13 of Transaction
Incentive.) The Transaction Incentive shall be paid on or before January 31,
2001.  The Transaction Incentive, including any payments under paragraph 5(c)
herein, shall not be considered as income or compensation in determining Honse's
benefits under any non-qualified benefit plan, including the Supplemental
Executive Retirement Plan except that Honse may elect to defer all or part of
the Transaction Incentive under the Executive Deferred Compensation Plan or
comparable plan.

8.Annual Amount


     As used herein, the Annual Amount shall be determined as follows:

     (a)  For calculating the severance allowance in the event that the
Consolidation has not occurred at the time of the termination of employment, the
Annual Amount shall equal Honse's average annual "W-2 income" for the last five
complete calendar years.

     (b)  For calculating the severance allowance in the event the Consolidation
has occurred at the time of the termination of employment, or for calculating
the Transaction Incentive, the Annual Amount shall equal the greater of:

        (i) Honse's average annual "W-2 income" for the last five complete
            calendar years;

       (ii) An amount equal to John D. Johnson's then current base salary
            plus short-term and long-term target bonus (the "Target Bonus"); or

      (iii) An amount equal to John D. Johnson's base salary plus Target
            Bonus for calendar year 1999.

9.Noncompetition


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 Company.  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.  If Honse's employment terminates pursuant to paragraph 5(b), the
foregoing restrictions shall extend only for a period of one (1) year
thereafter.

10.  Successor in Interest

This Agreement and the rights and obligations hereunder shall be binding upon
and inure to the benefit of the parties hereto and their respective legal
representatives, and shall also bind and inure to the benefit of any successor
of the Company by merger or consolidation or any purchaser or assignee of all or
substantially all of its assets, but, except to any such successor, purchaser,
or assignee of the Company, neither this Agreement nor any rights or benefits
hereunder may be assigned by either party hereto.

11.  Construction

Whenever possible, each provision of this Agreement shall be interpreted in such
a manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement.

12.  Governing Laws


This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Missouri.

13.  Notices


Any notice required or permitted to be given under this Agreement shall be
sufficient if in writing, sent by Certified Mail, Return Receipt Requested:

If to Honse:        Robert Honse
                    2015 Hogan Drive
                    Lawrence, KS 66047

If to the Company:  Chief Executive Officer
                    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

14.  Entire Agreement


This Agreement shall constitute the entire agreement between the parties,
superseding all prior agreements, and may not be modified or amended and no
waiver shall be effective unless by written document signed by the Chief
Executive Officer, or the Chairman of the Board and Honse.


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

ROBERT HONSE                       FARMLAND INDUSTRIES, INC.

  /s/ ROBERT HONSE                   /s/  H.D. CLEBERG
___________________						____________________________________________
                                   By:  H.D. Cleberg
                                   Its:  President and Chief Executive Officer