UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form 10-K

   X     Annual  Report  Pursuant to Section 13 or 15(d) of the  Securities
-------  Exchange  Act of 1934 for the fiscal year ended August 31, 2005

                                       or

         Transition Report Pursuant to Section 13 or 15(d) of the Securities
-------  Exchange Act of 1934


                  For the transition period from _____ to _____

                        Commission File Number: 000-21788


                           DELTA AND PINE LAND COMPANY
             (Exact name of registrant as specified in its charter)

Delaware                                        62-1040440
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)

One Cotton Row, Scott, Mississippi              38772
(Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code:  (662) 742-4000

           Securities registered pursuant to Section 12(b) of the Act:

                                                Name of each exchange
Title of each class                             on which registered
Common Stock, $0.10 par value                   New York Stock Exchange, Inc.

           Securities registered pursuant to Section 12(g) of the Act:

                                      None

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes X No ___

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes X  No ___

The  aggregate  market  value of  Common  Stock  held by  non-affiliates  of the
Registrant,  based upon the closing  sale price of the Common  Stock on February
28,  2005,  as  reported  on the New  York  Stock  Exchange,  was  approximately
$930,500,000.  Shares of Common  Stock held by each  officer and director and by
each  person  who owns 5% or more of the  outstanding  Common  Stock  have  been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate  status is not  necessarily  a conclusive  determination  for other
purposes.

As of October 31, 2005,  Registrant had 36,083,334  outstanding shares of Common
Stock.

                    DOCUMENTS TO BE INCORPORATED BY REFERENCE

Registrant incorporates by reference portions of the Delta and Pine Land Company
Proxy Statement for the Annual Meeting of Stockholders to be held on January 16,
2006. (Items 10, 11, 12, 13 and 14 of Part III).

<PAGE>

PART I

ITEM 1. BUSINESS

Domestic

Delta and Pine Land Company, a Delaware  corporation,  and subsidiaries ("D&PL")
is primarily engaged in the breeding, production,  conditioning and marketing of
proprietary  varieties of cotton  planting  seed in the United  States and other
cotton producing nations. We also breed,  produce,  condition and market soybean
planting seed in the United States.

Since 1915, we have bred,  produced and/or  marketed upland picker  varieties of
cotton planting seed for cotton varieties that are grown primarily east of Texas
and in Arizona.  D&PL also breeds and markets varieties of stripper  cottonseed,
which  are  grown  primarily  in the  Texas  high  plains, and  Acala  and  Pima
cottonseed,  which are grown primarily in California. We have used our extensive
classical plant breeding programs to develop a gene pool necessary for producing
cotton  varieties with improved  agronomic  traits important to farmers (such as
crop   yield)   and  to   textile   manufacturers   (such  as   enhanced   fiber
characteristics).

In 1980,  we added  soybean  seed to our product  line.  In 1996,  we  commenced
commercial  sales in the  United  States  of  cotton  planting  seed  containing
                                                               1
Bollgard(R) ("Bollgard") gene technology licensed from Monsanto which expresses
a protein toxic to certain  lepidopteran  pests. Since 1997, we have marketed in
the U.S.  cotton  planting seed that contains a gene licensed from Monsanto that
provides  tolerance  to  glyphosate-based  herbicides,  commonly  referred to as
Roundup  Ready(R)  ("Roundup  Ready") Cotton.  In 1997, we commenced  commercial
sales in the U.S. of soybean  planting  seed that  contains a gene that provides
tolerance to glyphosate-based herbicides ("Roundup Ready Soybeans"). In 1998, we
commenced  sales  of  cotton  planting  seed of  varieties  containing  both the
Bollgard and Roundup Ready genes.  In 2003, we began  selling  cotton  varieties
containing  Bollgard  II(R),   Monsanto's  insect  resistance  technology  which
contains two genes conferring resistance to lepidopteran insects.

International

During the 1980's, as a component of our long-term growth strategy,  we began to
market our products,  primarily  cottonseed,  internationally.  Over a period of
years, we have  strengthened  and expanded our  international  staff in order to
support our  expanding  international  business.  In foreign  countries,  cotton
acreage is often planted with  farmer-saved  seed which has not been delinted or
treated and is of low overall  quality.  We believe  that we have an  attractive
opportunity  to  penetrate  foreign  markets  because of our  widely  adaptable,
superior cotton varieties and hybrids,  technological  know-how in producing and
conditioning  high-quality  seed and our brand  name  recognition.  Furthermore,
Monsanto's  Bollgard,  Bollgard II and Roundup Ready gene technologies  (that we
either have licensed or have options to license) are effective in many countries
and could bring value to farmers.

We  sell  our  products  in  foreign  countries  through  (i)  export  sales  to
distributors and (ii) direct in-country operations through either joint ventures
or wholly-owned  subsidiaries.  The method varies and evolves,  depending on our
assessment of the potential size and  profitability of the market,  governmental
policies,  currency and credit  risks,  sophistication  of the target  country's
agricultural  economy,  and costs (as compared to risks) of commencing  physical
operations in a particular country. In 2005, the majority of international sales

------------------------------
1. On March 31, 2000, Monsanto Company consummated a merger with Pharmacia &
Upjohn Inc. and changed its name to Pharmacia Corporation. On February 9, 2000,
Monsanto Company formed a new subsidiary corporation, Monsanto Ag Company,
which, on March 31, 2000, changed its name to Monsanto Company. On August 31,
2002, Pharmacia distributed to its shareholders its remaining interest in the
new Monsanto Company. Pursuant to the closing of a merger on April 16, 2003,
Pharmacia Corporation merged with and into a wholly-owned subsidiary of Pfizer
Inc. Pharmacia survived the merger as a wholly-owned subsidiary of Pfizer Inc.

In this document, with respect to events occurring on or before March 31, 2000,
the term "Monsanto" refers to the entity then designated Monsanto Company and
renamed Pharmacia Corporation on that date. With respect to events occurring
between March 31, 2000 and April 16, 2003, this entity is referred to as
"Pharmacia". With respect to events occurring after April 16, 2003, the entity
referred to as "Pharmacia" is that entity which on that date became a
wholly-owned subsidiary of Pfizer Inc. With respect to events occurring after
March 31, 2000, the entity formed as Monsanto Ag Company and renamed Monsanto
Company (NYSE: MON) on March 31, 2000, is referred to as "Monsanto".
<PAGE>

came from direct in-country operations (primarily Argentina,  Australia, Brazil,
China, South Africa and Turkey).

See Note 13 of the Notes to Consolidated Financial Statements in Part II, Item 8
for further details about business segments.

Joint Ventures

In March 1995,  D&PL and  Monsanto  formed D&M  International,  LLC to introduce
cotton  planting seed in  international  markets  combining  our acid  delinting
technology and elite germplasm  (cottonseed  varieties) with Monsanto's Bollgard
and Roundup Ready gene technologies.  In May 2002,  Pharmacia  activated a cross
purchase provision in the operating agreement for D&M International, LLC, and we
elected to have D&M  International,  LLC redeem  Pharmacia's 50% interest in D&M
International,  LLC. As a result of the redemption of Pharmacia's  interest,  we
now own all of D&M International, LLC.

In November 1995,  D&M  International,  LLC formed a subsidiary,  D&PL China Pte
Ltd. ("D&PL China"). D&PL China is 80% owned by D&M International,  LLC, and 20%
owned by a Singaporean  entity. In November 1996, D&PL China formed Hebei Ji Dai
Cotton Seed  Technology  Company Ltd. ("Ji Dai") with parties in Hebei Province,
one of the major cotton producing  regions in the People's Republic of China. Ji
Dai is 67% owned by D&PL China and 33% owned by Chinese  parties.  In June 1997,
Ji Dai commenced construction of a cottonseed  conditioning and storage facility
in  Shijiazhuang,  Hebei,  China,  pursuant  to the terms of the  joint  venture
agreement.  The new facility was completed in December 1997 and seed  processing
and  sales  of seed of D&PL  cotton  varieties  containing  Monsanto's  Bollgard
technology commenced in 1998.

In October  1997,  D&M  International,  LLC formed a joint  venture  with Ciagro
S.R.L.  ("Ciagro"), a distributor of agricultural inputs in the Argentine cotton
region,  for the  production and sale of genetically  improved  cottonseed.  CDM
Mandiyu  S.R.L.  ("CDM")  is owned  60% by D&M  International,  LLC,  and 40% by
Ciagro. In September 1998, CDM began  construction of a cottonseed  conditioning
and storage facility in Avia Terai, Chaco, Argentina. Construction was completed
in June 1999.  CDM has been  licensed  to sell our cotton  varieties  containing
Monsanto's  Bollgard  and  Roundup  Ready gene  technologies.  Sales of Bollgard
varieties commenced in 1999 and sales of Roundup Ready varieties began in 2003.

In July 1998,  D&PL China and the Anhui  Provincial  Seed  Corporation  formed a
joint venture company,  Anhui An Dai Cotton Seed Technology  Company,  Ltd. ("An
Dai") which is located in Hefei City, Anhui,  China. An Dai is 49% owned by D&PL
China and 51% owned by  Chinese  parties.  Under the terms of the joint  venture
agreement, An Dai produces,  conditions and sells our varieties of acid-delinted
cottonseed,  which contain  Monsanto's  Bollgard gene.  Commercial  sales of our
cotton  varieties  containing  the Bollgard  gene  technology  began in 2000. In
January 2002, An Dai began construction of a cottonseed conditioning and storage
facility in Hefei City, Anhui, China. Construction was completed in October 2003
and the facility is now operational.

In November 1998, D&M International, LLC and Maeda Administracao e Participacoes
Ltda, an affiliate of Agropem - Agro Pecuria Maeda S.A.,  formed a joint venture
in Minas  Gerais,  Brazil.  The joint  venture,  MDM Sementes De Algodao,  Ltda.
("MDM"),  produces,  conditions and sells our varieties of acid-delinted  cotton
planting seed. In 2000, we began selling our conventional  cotton varieties.  On
March 17, 2005,  the  Brazilian  government  announced  approval of the Bollgard
trait  for sale in  cotton.  We have  received  approval  to  commercialize  one
Bollgard  cottonseed  variety  and expect to sell  limited  quantities  for seed
production purposes in 2006. MDM will introduce transgenic  cottonseed varieties
containing the Roundup Ready gene technology in the Brazilian  market as soon as
all required  government  approvals are obtained.  Monsanto is  responsible  for
obtaining and  maintaining  government  approvals for Bollgard and Roundup Ready
traits.  MDM is 51%  owned  by D&M  International,  LLC and 49%  owned  by Maeda
Agroindustrial S/A (formerly Maeda Administracao e Participacoes Ltda).

In October  2001,  we  announced  that we had signed  Letters of Intent with two
parties  in China to form two new joint  ventures  there,  one each in Hubei and
Henan provinces. A joint venture agreement was negotiated and agreed to with the
parties  in Henan  province  and the  agreement  was  submitted  to the  Chinese
government  authorities for approval.  However,  in April 2002,  China announced
rules  prohibiting new foreign  investment in seed companies that intend to sell
genetically  modified  seed,  which will  restrict  the  ability of  non-Chinese
companies,  including  us, from  investing  in such joint  ventures.  We plan to
continue to expand our business in China through our existing joint ventures, Ji
Dai and An Dai.

In May  2002,  we  established  DeltaMax  Cotton,  LLC  ("DeltaMax"),  a limited
liability  company  jointly  owned  with  Verdia,  Inc.  ("Verdia"),  which  was
purchased by DuPont on July 2, 2004. DeltaMax was formed to create,  develop and
commercialize  value-enhancing  traits  for  the  cottonseed  market  that  will
complement and/or compete with traits available today. It is currently  focusing
on glyphosate-tolerant, insect-resistance and nematode-resistance strategies for
use in cotton.  Commercialization of new traits developed by this venture is not
expected  until after 2010.  DeltaMax  will  contract  research and  development
activities to Verdia,  third parties and D&PL when appropriate,  and license its
products  to D&PL and  potentially  to others.  D&PL and Verdia  each own 50% of
DeltaMax.
<PAGE>

Subsidiaries

D&PL South Africa,  Inc. ("D&PL South  Africa"),  our  wholly-owned  subsidiary,
through a South African branch,  commercializes  cottonseed varieties containing
Monsanto's Bollgard and Roundup Ready technologies in South Africa. In addition,
D&PL South Africa  maintains  winter  nursery  facilities,  produces  cottonseed
varieties for export to other  countries and processes  foundation seed grown in
that country.

D&PL Semillas Ltda., our wholly-owned subsidiary, maintains a winter nursery and
foundation  seed operation in Canas,  Costa Rica and has a delinting plant there
to process  foundation  seed for export to the United  States.  Multiple  winter
nursery  locations are used to manage seed production risks. The use of Southern
Hemisphere  winter  nurseries  and seed  production  programs  such as these may
accelerate the  introduction of new varieties  because we can raise at least two
crops per year by taking advantage of the Southern Hemisphere growing season.

Deltapine Australia Pty. Ltd., our wholly-owned  Australian subsidiary,  breeds,
produces,  conditions  and markets  cotton  planting seed in Australia.  Certain
varieties  developed  in  Australia  are  well  adapted  to other  major  cotton
producing  countries  and  Australian-developed  varieties are exported to those
areas. We sell seed of both  conventional and transgenic  varieties,  containing
Monsanto's Bollgard II and Roundup Ready technologies, in Australia.

Turk Deltapine, Inc. ("Turk Deltapine"), our wholly-owned subsidiary,  through a
Turkish branch, produces, conditions and markets cotton planting seed in Turkey.
In addition,  Turk Deltapine produces conventional cottonseed varieties for sale
in Turkey and Europe.

In September  2004,  D&PL  established,  through  Indian  nominee  shareholders,
Deltapine  India Seed Private  Ltd.  ("Deltapine  India").  This company will be
wholly-owned  by D&PL (by itself or through  wholly-owned  affiliates),  pending
formal transfer of ownership from the nominee shareholders.  Deltapine India was
formed to breed, test, produce,  market and sell agricultural seeds and services
in India.

Employees

As of  October  31,  2005,  we  employed  a  total  of 522  full-time  employees
worldwide,  excluding  approximately 107 employees of joint ventures. Due to the
nature of our business,  we utilize  seasonal  employees in our delinting plants
and our research and foundation  seed  programs.  The maximum number of seasonal
employees  approximates 175 and typically occurs in October and November of each
year. We consider our employee relations to be good.

Biotechnology

Insect Resistance for Cotton

Monsanto Company

Collaborative  biotechnology  licensing  agreements,  which were  executed  with
Monsanto in March 1992 and  subsequently  revised in April 1993,  October  1993,
February  1996,  December  1999,  January  2000 and March 2003,  provide for the
commercialization of Monsanto's Bollgard ("Bacillus thuringiensis" or "Bt") gene
technology in our varieties in the United States. The selected Bt gene is from a
bacterium  found  naturally  in soil and  produces  proteins  toxic  to  certain
lepidopteran  larvae,  the principal  cotton pests in many cotton growing areas.
Monsanto  created a  transgenic  cotton  plant by inserting Bt genes into cotton
plant  tissue.  The  resulting  transgenic  plant  tissue is  lethal to  certain
lepidopteran  larvae  that  consume  it. The gene and  related  technology  were
patented or licensed  from  others by Monsanto  and were  licensed to us for use
under the trade name Bollgard.  In our primary markets, the cost of insecticides
is  a  major   expenditure  for  many  cotton  growers.   The  insect  resistant
capabilities  of transgenic  cotton  containing the Bollgard gene may reduce the
amount of  insecticide  required to be applied by cotton  growers using planting
seed   containing  the  Bollgard  gene.  In  October  1995,  the  United  States
Environmental  Protection Agency ("EPA")  completed its initial  registration of
the Bollgard gene technology.  In 1996, we sold  commercially for the first time
two Deltapine  varieties,  which contained the Bollgard gene, in accordance with
the  terms of the  Bollgard  Gene  License  and  Seed  Services  Agreement  (the
"Bollgard  Agreement") among D&PL,  Monsanto and D&M Partners.  This initial EPA
registration had been set to expire on January 1, 2001 but was updated to expire
January 1, 2002.  In September  2001,  the EPA renewed the  registration  for an
additional  five years.  At the end of the five year period the EPA will,  among
other things,  reevaluate the effectiveness of the insect resistance  management
plan and decide whether to convert the  registration  to a non-expiring  (and/or
unconditional)   registration.   Monsanto  is  responsible   for  obtaining  and
maintaining  regulatory  approvals,  and is planning to seek  re-registration of
Bollgard.

Pursuant to the terms of the Bollgard Agreement,  farmers must buy a limited use
sublicense for the technology from D&M Partners, a partnership of D&PL (90%) and
Monsanto  (10%),  in  order  to  purchase  seed  containing  the  Bollgard  gene
technology.  Monsanto  determines  the  licensing  fee  growers  pay  for use of
Bollgard  technology.  Growers may receive discounts and/or rebates of licensing
fees under certain crop destruct,  crop replant and other programs. D&M Partners
contracts the billing and  collection  activities for Bollgard and Roundup Ready
licensing fees to Monsanto.  The  distributor/dealers  who coordinate the farmer
licensing  process  receive  a  portion  of  the  technology  sublicensing  fee,
presently approximately 13%. After the dealers and distributors are compensated,
D&M Partners  pays  Monsanto a royalty  equal to 71% of the net  sublicense  fee
(technology sublicensing fees less certain distributor/dealer  payments), and we
receive the remainder of net sublicense revenue for our services. The expiration
date of the Bollgard Agreement is determined by the last to expire of the patent
rights licensed under that agreement. On that basis (unless we terminate sooner,
as is permitted  after October 11, 2008),  the  expiration  date of the Bollgard
Agreement  will be June 13,  2012,  the date  the last of the  presently  issued
patents will expire.  This date may be extended in the event additional relevant
patents issue that have expiration dates later than June 13, 2012.

Pursuant  to the  Bollgard  Agreement,  Monsanto  must defend and  indemnify  us
against claims of patent infringement,  including all damages awarded or amounts
paid in  settlements.  Monsanto  must also  indemnify  us  against  (a) costs of
inventory and (b) lost profits on inventory which becomes  unsaleable because of
patent  infringement  claims.  Monsanto  must  defend  any  claims of failure of
performance of a Bollgard gene.  Monsanto and D&PL share the cost of any product
performance  claims in proportion  to each party's  share of the net  sublicense
fees.  The  indemnity  from Monsanto only covers  performance  claims  involving
failure of  performance  of the Bollgard gene and not claims  arising from other
causes.  Pharmacia remains liable for Monsanto's performance under these defense
and indemnity agreements.

In December  2000,  D&PL and Monsanto  executed the Bollgard II Gene License and
Seed Services Agreement (the "Bollgard II Agreement") for Monsanto's  subsequent
insect resistance  product.  The Bollgard II Agreement contains  essentially the
same terms as the Bollgard  Agreement.  On December 23, 2002, Monsanto announced
that it had received  U.S.  regulatory  clearance for Bollgard II, which expires
after the 2006 crop year.  Monsanto is responsible for obtaining and maintaining
regulatory  approvals and is planning to seek re-registration of Bollgard II. We
have  commercialized  limited  quantities of our Bollgard II cotton varieties in
the U.S.  beginning  in fiscal  2003.  The  expiration  date of the  Bollgard II
Agreement  is  determined  by the last to expire of the patent  rights  licensed
under that Agreement. On that basis (unless we terminate sooner, as is permitted
after October 11, 2008),  the expiration  date of the Bollgard II Agreement will
be November 4, 2018,  the date the last of the  presently  issued  patents  will
expire. This date may be extended in the event additional relevant patents issue
that have expiration dates later than November 4, 2018.

Syngenta Crop Protection AG

In August 2004, we executed a License  Acquisition  Agreement with Syngenta Crop
Protection AG ("Syngenta")  under which D&PL acquired worldwide licenses for the
commercialization  of  Syngenta's  VIP3A and Cry1Ab insect  resistance  genes in
cotton (the "VipCot Gene Licenses").  D&PL agreed to pay $46.8 million for these
licenses,  payable in installments,  of which $9.2 million represents contingent
payments.  These  licenses  provide for  commercialization  of insect  resistant
cotton  varieties  containing  Syngenta  insect  resistance  genes in the United
States  and  in  other  countries,   subject  to  government   approval  of  the
technologies.  Syngenta is responsible for obtaining such government approval in
the United States and, if instructed  by D&PL, in other  countries.  Syngenta is
required  to consult  with D&PL and to assist and support  commercialization  of
D&PL's products containing Syngenta's insect resistance genes.

Pursuant to the VipCot Gene Licenses, farmers will be sublicensed by D&PL to use
seed  containing   Syngenta's   insect  resistance   technologies.   The  VipCot
technologies  will be marketed on a competitive  basis with  alternative  insect
control costs and other available  technologies.  After dealers and distributors
are  compensated for their  services,  and after deduction of certain  marketing
expenses and other costs,  D&PL will pay Syngenta a royalty  equal to 30% of the
net revenue  obtained from  sublicensing of the VipCot gene  technologies.  D&PL
retains the balance of such net  sublicense  revenue.  Provisions for payment of
royalties under the VipCot Gene Licenses generally continue until the expiration
of  the  last  to  expire  of   Syngenta's   applicable   patent   rights  on  a
country-by-country  basis  or  for a  minimum  of  ten  years  after  the  first
commercial sale of a licensed product in the subject  country,  after which D&PL
will hold a permanent  paid-up license to Syngenta's  licensed patent rights for
use in  cotton.  D&PL has the  rights to  sublicense  its  affiliates  (and,  in
countries outside the United States, third parties) to commercialize  Syngenta's
insect  resistance  technologies.  In the  event  D&PL  elects  not to make  the
contingent payments,  and upon other termination events, D&PL will retain rights
to  commercialize  products  containing  VipCot  events which have then received
government approval for sale in the United States.

The VipCot Gene  Licenses make D&PL the primary  licensee of  Syngenta's  insect
resistance  technology.  To retain this status,  D&PL must meet  milestones  for
development of VipCot cotton varieties,  produce seed for commercial sale in the
United States and meet and maintain certain sales objectives.

Pursuant to the VipCot Gene  Licenses,  Syngenta is  responsible  for  obtaining
required  intellectual  property  rights  and for  defense  of  claims of patent
infringement.  The costs of  defense  and  indemnification  are borne  either by
Syngenta  alone or by Syngenta and D&PL  proportionately  based on the nature of
the claim.  D&PL is  responsible  for  managing  the  defense  of grower  claims
alleging failure of performance of a licensed gene.  Syngenta and D&PL will bear
the cost of product  performance  claims in  proportion to each party's share of
net sublicense fees. The product performance indemnity from Syngenta only covers
claims involving  failure of performance of the Syngenta insect resistance genes
and not claims arising from other causes.
<PAGE>

Dow AgroSciences

In January 2003, we announced a  collaboration  agreement with Dow  AgroSciences
LLC  ("DAS")  under  which we would  develop,  test and  evaluate  elite  cotton
varieties  containing DAS insect resistance traits. We continue to work with DAS
insect resistant  traits. On October 4, 2004, DAS announced it had received full
EPA  registration for its WideStrikeTM  Insect  Protection  technology and would
introduce  products from its subsidiary in 2005. We may commercialize  varieties
containing  DAS insect  resistance  technology  if we reach a  commercialization
agreement. To date, no such agreement has been reached.

Herbicide Tolerance for Cotton

Monsanto Company

In February  1996,  D&PL,  Monsanto and D&M Partners  executed the Roundup Ready
Gene License and Seed Services Agreement (the "Roundup Ready Agreement"),  which
provides for the commercialization of Roundup Ready cottonseed.  Pursuant to the
collaborative biotechnology licensing agreements executed in 1996 and amended in
July 1996,  December  1999,  January 2000 and March 2003, we have also developed
transgenic cotton varieties that are tolerant to Roundup(R),  a glyphosate-based
herbicide sold by Monsanto.  In 1996, such Roundup Ready plants were approved by
the Food and Drug  Administration,  the USDA,  and the EPA.  The  Roundup  Ready
Agreement  grants a license to D&PL and certain of our  affiliates  the right in
the United States to sell  cottonseed of our varieties  that contain  Monsanto's
Roundup  Ready gene.  The Roundup  Ready gene makes  cotton  plants  tolerant to
contact with Roundup  herbicide  applications  made during a finite early season
growth period.  Similar to the Bollgard Agreement,  farmers must execute limited
use  sublicenses  in order to purchase seed  containing  the Roundup Ready gene.
Monsanto  determines  the  licensing  fee growers  pay for use of Roundup  Ready
technology. Growers may receive discounts and/or rebates of licensing fees under
certain crop destruct, crop replant and other programs. The distributors/dealers
who coordinate the farmer licensing  process receive a portion of the technology
sublicensing   fee,   presently   approximately   13%.  After  the  dealers  and
distributors are compensated,  D&M Partners pays Monsanto a royalty equal to 70%
of  the  net  sublicense  fee   (technology   sublicensing   fees  less  certain
distributor/dealer  payments),  and we receive the  remainder of net  sublicense
revenue for our services.  The expiration date of the Roundup Ready Agreement is
determined  by the last to expire  of the  patent  rights  licensed  under  that
agreement.  On that basis  (unless we terminate  sooner,  as is permitted  after
October 11, 2008),  the expiration  date of the Roundup Ready  Agreement will be
April 18, 2017,  the date the last of the presently  issued patents will expire.
This date may be extended in the event  additional  relevant  patents issue that
have expiration dates later than April 18, 2017.

Pursuant to the Roundup Ready  Agreement,  Monsanto must defend and indemnify us
against claims of patent infringement,  including all damages awarded or amounts
paid in  settlements.  Monsanto  will  also  indemnify  us  against  the cost of
inventory that becomes  unsaleable  because of patent  infringement  claims, but
Monsanto is not required to indemnify us against lost profits on such unsaleable
seed.  In  contrast  with  the  Bollgard  Agreement,  where  the  cost  of  gene
performance  claims  will  be  shared  in  proportion  to  the  division  of net
sublicense  revenue,  Monsanto  must  defend  and must bear the full cost of any
claims of failure of  performance of the Roundup Ready Gene.  Pharmacia  remains
liable for Monsanto's  performance under these defense and indemnity agreements.
In both agreements,  generally, we are responsible for varietal/seed performance
issues, and Monsanto is responsible for failure of the genes.

On January 7, 2005,  D&PL  executed the Roundup Ready Flex Gene License and Seed
Services Agreement (the "Roundup Ready Flex Agreement") for Monsanto's  advanced
herbicide   tolerance  product.   The  Roundup  Ready  Flex  Agreement  contains
essentially  the same  terms,  including  compensatory  terms,  as the  existing
Roundup Ready  Agreement  between D&PL and Monsanto.  The expiration date of the
Roundup  Ready Flex  Agreement is determined by the last to expire of the patent
rights under this Agreement which cover the licensed gene. On that basis (unless
we terminate sooner, as is permitted after October 11, 2008),  assuming that all
of the patents  identified by Monsanto in the addendum to the Roundup Ready Flex
Agreement cover the licensed gene, the expiration date of the Roundup Ready Flex
Agreement will be December 15, 2020,  the date the last of the presently  issued
patents will expire.  This date may be extended in the event additional relevant
patents issue that have expiration dates later than December 15, 2020.

On March 15, 2005, Monsanto announced it had obtained U.S. regulatory  clearance
for Roundup Ready Flex  technology.  We have  developed and produced  commercial
seed  quantities  of  several  Roundup  Ready  Flex  varieties  in 2005  and are
preparing to commercialize these cotton varieties in the U.S. beginning in 2006.

<PAGE>
Cotton Technology Licenses for Countries Outside the United States

In February 1996, D&PL and Monsanto  executed an Option Agreement  (subsequently
amended in December  1999) which provides us with option rights for an exclusive
license for  Monsanto's  Bollgard  and other genes active  against  lepidopteran
insects in each country outside the United States where Monsanto  commercializes
such  genes in  cotton  (except  for  Australia  where we have an  option  for a
non-exclusive  license to such genes and India where we have no option rights to
such genes),  option rights to non-exclusive  licenses to Roundup Ready genes in
cotton  in all  countries  outside  the  United  States,  and  option  rights to
non-exclusive licenses for all countries (except India) for any gene that may be
commercialized  by Monsanto that enhances the fiber  characteristics  of cotton.
The terms of such  licenses must be offered and  negotiated  in good faith.  All
such  licenses  that are  non-exclusive  must provide us most  favored  licensee
status. The Option Agreement remains in effect so long as the Bollgard Agreement
and Roundup Ready Agreement for the United States remain in effect.  Pursuant to
the Option  Agreement,  Monsanto and D&PL (or D&PL's affiliates or joint venture
companies)  have entered into exclusive  Bollgard  licenses for seven  countries
(Argentina, Brazil, China, Colombia, Mexico, South Africa, and Thailand) outside
the United States and a non-exclusive  license for lepidopteran active genes for
Australia,  as well as  non-exclusive  Roundup Ready licenses for five countries
(Argentina,  Australia,  Brazil,  Colombia and South Africa)  outside the United
States.

Herbicide Tolerance for Soybeans

In February  1997,  D&PL and Monsanto  executed a Roundup Ready Soybean  License
Agreement  which provided for  commercialization  of Roundup Ready soybean seed.
Effective  September  1, 2001,  D&PL and Monsanto  executed a new Roundup  Ready
Soybean  License  and  Seed  Services  Agreement  (the  "Roundup  Ready  Soybean
Agreement")  for 2001 and future  years.  The Roundup  Ready  Soybean  Agreement
grants a  non-exclusive  license  to D&PL to  produce  and to sell in the United
States soybean seed containing  Monsanto's Roundup Ready gene. The Roundup Ready
gene  makes  soybean   plants   tolerant  to  contact  with  Roundup   herbicide
applications when used in accordance with product  instructions.  Similar to the
Bollgard  Agreement  and the Roundup Ready  Agreement  for cotton,  farmers must
execute limited use sublicenses in order to purchase soybean seed containing the
Roundup Ready gene. The royalty charged to the seed partners, including D&PL, is
set annually by  Monsanto.  We receive a portion of the royalty for our services
under the Roundup Ready Soybean Agreement and may receive additional  incentives
based on a separate licensee incentive agreement. We have the right to terminate
the  Roundup  Ready  Soybean  Agreement  at our  option  upon 90 days  notice to
Monsanto; Monsanto may terminate the agreement only for cause. Unless terminated
sooner, the Roundup Ready Soybean Agreement will expire December 31, 2012.

Since  1987,  we have  conducted  research  to develop  soybean  plants that are
tolerant to certain DuPont Sulfonylurea  herbicides.  Such plants enable farmers
to apply these herbicides for weed control without  significantly  affecting the
agronomics  of the soybean  plants.  Since  soybean seed  containing  the STS(R)
herbicide-tolerant  trait is not genetically engineered,  sale of this seed does
not require  government  approval,  although the herbicide to which they express
tolerance must be EPA approved.

Transformation, Enabling and Other Technologies

In March 1998,  D&PL and the United  States of America,  as  represented  by the
Secretary of Agriculture (USDA) were granted United States Patent No. 5,723,765,
entitled  "Control Of Plant Gene  Expression".  Subsequently,  two other patents
(United States Patent Nos.  5,925,808 and 5,977,441) were granted under the same
title.  These  patents for the  Technology  Protection  System  resulted  from a
concept  developed  by  research  scientists  employed by both D&PL and the U.S.
Department of  Agriculture's  Agricultural  Research Service  ("USDA-ARS").  The
patents  broadly  cover all  species of plants  and seed,  both  transgenic  and
conventional,  for a system  designed to allow control of progeny seed viability
without harming the crop. One application of the technology  could be to control
unauthorized  planting of seed of proprietary varieties (sometimes called "brown
bagging") by making such a practice  non-economic  since unauthorized saved seed
will not  germinate,  and,  therefore,  would be useless for  planting.  Another
application  of the technology  would be to prevent the unlikely  possibility of
transfer of transgenes,  through  pollen,  to closely related species of plants.
These patents have the prospect of opening significant worldwide seed markets to
the sale of transgenic technology in varietal crops in which crop seed currently
is saved and used in  subsequent  seasons as  planting  seed.  D&PL and the USDA
executed a  commercialization  agreement  on July 6, 2001,  for this  technology
giving us the exclusive  right to market this  technology.  Once  developed,  we
intend  licensing  of this  technology  to be  widely  available  to other  seed
companies.

In July  1999,  United  States  Patent No.  5,929,300,  entitled  "Pollen  Based
Transformation  System  Using Solid  Media," was issued to the United  States of
America as  represented  by the  Secretary of  Agriculture  (USDA).  This patent
covers transformation of plants. The patent for the Pollen Transformation System
resulted from a research program  conducted  pursuant to a Cooperative  Research
and Development Agreement between D&PL and the USDA-ARS in Lubbock,  Texas. D&PL
and the USDA  executed on December  18,  2000,  a  commercialization  agreement,
providing  us  exclusive  rights to market  this  technology  to third  parties,
subject to certain rights  reserved to the USDA. We believe this  transformation
method uses techniques and plant parts that are not covered by currently  issued
plant transformation U.S. patents held by others. It is a method which should be
more  efficient and effective  than many other plant  transformation  techniques
currently  available.  This patent and the  marketing  rights apply to all plant
species on which this method of transformation is effective.

The  technologies  described above resulted from basic research and will require
further  development in order to be used in commercial seed. We estimate that it
will be several  years before  either of these  technologies  could be available
commercially. In addition, we have rights to other transformation,  enabling and
other  technologies that are useful to our research and commercial  efforts and,
in some cases, may be sublicensed to others.

Other

We have  licensing,  research  and  development,  confidentiality  and  material
transfer  agreements  with  providers of technology  that we are  evaluating for
potential  commercial  applications and/or  introduction.  We also contract with
third  parties  to  perform  research  on our  behalf  for  enabling  and  other
technologies that we believe have potential commercial  applications in varietal
crops around the world.

Commercial Seed

The following  table  presents the number of commercial  cottonseed  and soybean
seed varieties we sold in the years ended August 31, 2005 and 2004:

                                                2005                   2004
                                          --------------       ---------------
Cotton
     Conventional                                    11                    11
     Bollgard                                         2                     3
     Roundup Ready                                   14                    16
     Bollgard/Roundup Ready                          15                    14
     Bollgard II/Roundup Ready                        2                     1
     Bollgard II/Roundup Ready Flex                   2                     -
     Roundup Ready Flex                               1                     -
                                         ---------------       ---------------
                                                     47                    45
                                         ===============       ===============
Soybeans
     Conventional                                     1                     1
     Roundup Ready                                   18                    19
     STS                                              2                     2
     Roundup Ready/STS                                2                     -
                                         ---------------       ---------------
                                                     23                    22
                                         ===============       ===============

In addition to the varieties  indicated above, we have many experimental  cotton
and soybean varieties in late stage development prior to  commercialization.  We
also have  experimental  cotton  hybrids  that are being  developed  for certain
cotton markets in the world.

Seed of all commercial  plant species is either varietal or hybrid.  Most of our
cotton  and all of our  soybean  seed  are  varietals.  Varietal  plants  can be
reproduced from seed produced by a parent plant,  with the offspring  exhibiting
only minor  genetic  variations.  The Plant Variety  Protection  Act of 1970, as
amended in 1994, in essence prohibits,  with limited  exceptions,  purchasers of
varieties protected under the amended Act from selling seed harvested from these
varieties without permission of the plant variety protection  certificate owner.
Some foreign  countries  provide  similar legal  protection for breeders of crop
varieties.

Although cotton is generally varietal and, therefore,  can be grown from seed of
parent plants saved by the growers,  most farmers in our primary domestic market
purchase seed from commercial  sources each season because  cottonseed  requires
delinting prior to seed treatment with crop  protection  products in order to be
sown by modern planting equipment. Delinting and conditioning may be done either
by a seed  company  on its  proprietary  seed or by  independent  delinters  for
farmers.  Modern cotton farmers in upland picker areas  generally  recognize the
greater assurance of genetic purity, quality and convenience that professionally
grown  and   conditioned   seed  offers   compared  to  seed  they  might  save.
Additionally,  U.S. patent laws make unlawful any unauthorized  planting of seed
containing patented technology, such as Bollgard, Bollgard II and Roundup Ready,
saved  from  prior  crops.  In  addition,  we have  patented  many of our cotton
varieties which makes unauthorized planting or use of such varieties unlawful.

We farm approximately 5,500 acres globally,  primarily for research purposes and
for  production of cotton and soybean  foundation  seed.  Additionally,  we have
annual  agreements with various growers to produce seed for cotton and soybeans.
The growers plant parent seed  purchased  from us and follow  quality  assurance
procedures  required  for  seed  production.   If  the  grower  adheres  to  our
established quality assurance standards throughout the growing season and if the
seed meets our standards upon harvest, we may be obligated to purchase specified
minimum quantities of seed, usually in our first and second fiscal quarters,  at
prices equal to the commodity market price of the seed plus a grower premium. We
then condition the seed for sale.

The  majority  of our  sales are made from  late in the  second  fiscal  quarter
through the end of the third fiscal  quarter.  Varying  climatic  conditions can
change the quarter in which seed is delivered,  thereby  shifting  sales and our
earnings between  quarters.  Thus, seed  production,  distribution and sales are
seasonal and interim  results will not  necessarily be indicative of our results
for a fiscal year.

Revenues  from  domestic  seed sales are  recognized  when the seed is  shipped.
Revenues  from  Bollgard,  Bollgard  II and  Roundup  Ready  licensing  fees are
recognized when the seed is shipped. Domestically, the licensing fees charged to
farmers for  Bollgard,  Bollgard II and Roundup  Ready  cottonseed  are based on
pre-established  planting rates for nine geographic regions and, for years prior
to 2004,  considered  the estimated  number of seed  contained in each bag which
varied by variety, location grown, and other factors.  Effective in 2004, picker
and stripper  cottonseed  products  were sold in bags  containing  approximately
250,000 seed as well as bulk boxes  containing  approximately  8,000,000  seeds.
Acala and Pima cottonseed products continue to be sold in 50-pound bags.

International  export revenues are recognized upon the later of when the seed is
shipped or the date  letters of credit (or  instruments  with  similar  security
provisions) are confirmed.  International export sales are not subject to return
except in limited cases in Mexico and Colombia. All other international revenues
from the sale of  planting  seed,  less  estimated  reserves  for  returns,  are
recognized  when  the  seed  is  shipped,  except  in  Australia  where  certain
immaterial revenues are recognized when collected.

Domestically,  we promote  our cotton and soybean  seed  directly to farmers and
sell our  seed  through  distributors  and  dealers.  All of our  domestic  seed
products  (including  those containing  Bollgard,  Bollgard II and Roundup Ready
technologies)  are subject to return and credit risk,  the effects of which vary
from year to year.  The annual level of returns and,  ultimately,  net sales are
influenced  by  various  factors,   principally  commodity  prices  and  weather
conditions  occurring in the spring  planting season during our third and fourth
quarters.  We provide for estimated returns as sales occur. To the extent actual
returns differ from estimates, adjustments to our operating results are recorded
when such  differences  become  known,  typically  in our  fourth  quarter.  All
significant  returns  occur and are  accounted  for by fiscal  year end. We also
offer various sales incentive programs for seed and participate in such programs
related to the Bollgard,  Bollgard II and Roundup Ready  technology fees offered
by Monsanto.  Under these programs,  if a farmer plants his seed and the crop is
lost  (usually  due to  inclement  weather) by a certain  date, a portion of the
price of the seed and  technology  fees are forgiven or rebated to the farmer if
certain  conditions  are met.  The  amount of the  refund and the impact to D&PL
depends on a number of factors including whether the farmer can replant the crop
that was destroyed.  We record monthly  estimates to account for these programs.
The  majority of program  rebates  occur  during the second,  third,  and fourth
quarters.  Essentially all material claims under these programs have occurred or
are accounted for by fiscal year end.

Availability of Information on Our Website

Additional  information  (including  our annual  report on Form 10-K,  quarterly
reports  on Form  10-Q,  current  reports  on Form 8-K and  amendments  to those
reports  filed or furnished  pursuant to Section 13(a) and 15(d) of the Exchange
Act) is available  free of charge at our website at  www.deltaandpine.com  under
Media & News, as soon as reasonably  practicable  after we  electronically  file
such  material  with or furnish  such  material to the  Securities  and Exchange
Commission.
<PAGE>

Outlook

From  time to time,  we may make  forward-looking  statements  relating  to such
matters as  anticipated  financial  performance,  existing  products,  technical
developments,  new products,  research and  development  activities  and similar
matters.  The Private  Securities  Litigation Reform Act of 1995 provides a safe
harbor for forward-looking  statements. In order to comply with the terms of the
safe harbor,  we note that a variety of factors  could cause our actual  results
and  experience  to differ  materially  from the  anticipated  results  or other
expectations  expressed  in  our  forward-looking   statements.  The  risks  and
uncertainties  that may  affect the  operations,  performance,  development  and
results of our business include those noted elsewhere in this Item and in "Risks
and Uncertainties" in Item 7.

<PAGE>

ITEM 2.   PROPERTIES

We maintain  facilities  primarily used for research,  delinting,  conditioning,
storage  and  distribution.   Our  world   headquarters  is  located  in  Scott,
Mississippi.  This location is used for corporate  offices,  quality  assurance,
research and development,  sales and marketing, seed production,  and cottonseed
delinting, conditioning and storage.

Our other owned cottonseed delinting, conditioning and storage facilities in the
United States are in: Eloy, Arizona; Hollandale,  Mississippi; and Aiken, Texas.
We have additional leased storage  facilities in Lubbock,  Texas and Greenville,
Mississippi and own an additional  storage facility in Lubbock,  Texas. We own a
soybean  processing  plant  in  Harrisburg,  Arkansas.  We also  own  cottonseed
delinting  facilities in  Narromine,  New South Wales,  Australia;  Groblersdal,
South Africa; Canas, Costa Rica;  Shijiazhuang,  Hebei, China (through a Chinese
joint venture);  Hefei City, Anhui, China (through a Chinese joint venture); and
Avia Terai,  Chaco,  Argentina (through an Argentine joint venture).  We have an
additional  leased storage facility in Adana,  Turkey. We also own a facility in
Tunica, Mississippi that is not currently in use.

Our plant breeders  conduct  research at eight  company-owned  facilities in the
United States. We also own research facilities in Australia and Brazil and lease
additional  research  facilities in Brazil and Greece.  In  connection  with our
foundation  seed  program,  we  lease  land  in the  United  States,  Argentina,
Australia, Brazil, China, Costa Rica, South Africa, and Turkey.

All owned properties are free of encumbrances. We also may lease warehouse space
in other  locations.  We  believe  that  all of our  facilities,  including  our
conditioning, storage and research facilities, are well maintained and generally
adequate  to meet our needs for the  foreseeable  future.  (See  "Liquidity  and
Capital Resources" in Item 7).

PRINCIPAL COMPANY LOCATIONS, AFFILIATES AND SUBSIDIARIES:

World Headquarters
Scott, Mississippi, USA

Research Centers                           Operations Facilities
Scott, Mississippi, USA                    Scott, Mississippi, USA
Winterville, Mississippi, USA              Hollandale, Mississippi, USA
Maricopa, Arizona, USA                     Eloy, Arizona, USA
Tifton, Georgia, USA                       Harrisburg, Arkansas, USA
Hartsville, South Carolina, USA            Aiken, Texas, USA
Hale Center, Texas, USA                    Lubbock, Texas, USA
Haskell, Texas, USA                        Avia Terai, Chaco, Argentina
Lubbock, Texas, USA                        Narromine, New South Wales, Australia
Narrabri, New South Wales, Australia       Canas, Costa Rica
Capinopolis, Minas Gerais, Brazil          Hefei City, Anhui, People's Republic
Uberlandia, Minas Gerais, Brazil           of China
Canas, Costa Rica                          Shijiazhuang, Hebei, People's
Larissa, Greece                            Republic of China
                                           Groblersdal, South Africa
                                           Adana, Turkey

                                           Foreign Offices
                                           Narrabri, New South Wales, Australia
                                           Uberlandia, Minas Gerais, Brazil
                                           Canas, Costa Rica
                                           Thessaloniki, Greece
                                           New Delhi, India
                                           Mexicali, Mexico
                                           Mexico City, Mexico
                                           Wassenaar, The Netherlands
                                           Beijing, People's Republic of China
                                           Groblersdal, South Africa
                                           Seville, Spain
                                           Izmir, Turkey


<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

The following sets forth all known pending  litigation in which D&PL is named as
a defendant and a description of other legal matters.

Product Claims

D&PL and  Monsanto  were  named as  defendants  in a lawsuit  filed in the 106th
Judicial District Court of Gaines County, Texas, on April 27, 2000. In this case
the plaintiff alleges, among other things, that certain cottonseed acquired from
D&PL that  contained  the  Roundup  Ready gene did not perform as the farmer had
anticipated.  D&PL and Monsanto are  investigating  the claims to determine  the
cause or causes of the alleged problem. Pursuant to the terms of the February 2,
1996 Roundup Ready Gene License and Seed Service  Agreement  (the "Roundup Ready
Agreement"),  D&PL has  tendered  the  defense  of this  claim to  Monsanto  and
requested  indemnity.  Pursuant  to the  Roundup  Ready  Agreement,  Monsanto is
contractually  obligated to defend and indemnify D&PL against all claims arising
out of the failure of the Roundup  Ready gene and  Monsanto has agreed to do so.
D&PL will not have a right of indemnification  from Monsanto,  however,  for any
claim involving defective varietal  characteristics separate from or in addition
to  the  herbicide  tolerance  gene  and  such  claims  are  contained  in  this
litigation.

D&PL was named in two  lawsuits  filed in the  Circuit  Court of Holmes  County,
Mississippi.  One was filed March 14,  2002,  and the second was filed on August
19,  2002.  Both cases  include  numerous  plaintiffs  who allege  that  certain
cottonseed  sold by D&PL was improperly  mixed and blended and failed to perform
as advertised.  On December 14, 2004, an Order was entered in the March 14, 2002
case  severing  the  individual  claims  of  the  57  original  plaintiffs  into
fifty-seven  separate actions.  Fourteen of the fifty-seven cases will remain in
Holmes  County,  Mississippi.  The  venue  to  which  the  other  cases  will be
transferred has not yet been determined.  On January 24, 2005, the Supreme Court
of the State of  Mississippi  granted D&PL's  interlocutory  appeal of the trial
court's  denial of D&PL's motion to dismiss the claims of seven  plaintiffs  for
failure to comply with the Mississippi  Seed  Arbitration  Act. The briefing and
scheduling  order  has  been  entered  on  the  consolidated  appeals  and it is
anticipated  that the resolution of this matter will take  approximately  six to
nine months. The issue involved on these consolidated  interlocutory appeals, if
decided in D&PL's favor,  should dispose of 43 of the 57 original  plaintiffs in
the March 14, 2002 action and 15 of the original 17 plaintiffs in the August 19,
2002  action.  Motions are now pending in the August 19, 2002 case  identical to
those filed in the March 14, 2002 case. It is  anticipated  that the trial court
will withhold ruling on those motions until such time as the Mississippi Supreme
Court decides the  interlocutory  appeal of the March 14, 2002 case.  Neither of
these  lawsuits   alleges  that  the  Monsanto  gene  technology   failed,   and
accordingly,  it does not appear that D&PL has a claim for  indemnity or defense
under the terms of any of the gene licenses with Monsanto.

In  December  2002,  D&PL filed a suit in the  Circuit  Court of Holmes  County,
Mississippi,  against  Nationwide  Agribusiness  and other  insurance  companies
seeking a declaration  that the  allegations of the Holmes  County,  Mississippi
lawsuit  filed  March 14,  2002,  are  covered by D&PL's  comprehensive  general
liability  and  umbrella  liability  policies.  This  case  was  removed  by the
defendants  to the United  States  District  Court for the Southern  District of
Mississippi.  In this litigation, D&PL seeks a declaration that its insurers are
responsible for the cost of defending such actions,  and full indemnification of
D&PL in the event a  judgment  is  rendered  against  it based upon the seed mix
claim  alleged  by  plaintiffs.   D&PL  alleges  in  this  litigation  that  the
allegations  of  plaintiffs'  complaint  are  covered  by one or more of  D&PL's
insurance policies issued by the defendant insurance companies.  Both Nationwide
and D&PL have filed Motions for Summary  Judgment  which are now pending  before
the court.  Barring a ruling on those  motions in advance of trial,  the case is
scheduled to commence on November 14, 2005.

In the August 19,  2002  Holmes  County  lawsuit,  D&PL has filed a third  party
Complaint against  Nationwide  Agribusiness and other insurers alleging they are
responsible for the cost of defending the action and for full indemnification of
D&PL in the event a Judgment is entered  against it. The third party  defendants
removed this case to the United States District Court for the Southern  District
of  Mississippi,  but on  September  28,  2004,  the case was remanded to Holmes
County,  Mississippi where it remains pending. The decision in the December 2002
case filed by D&PL against  Nationwide  referenced in the immediately  preceding
paragraph may be dispositive of D&PL's third party complaint in this action.

D&PL,  Monsanto,  and another seed producer were named in a lawsuit filed in the
United  States  District  Court for the  Eastern  District  of  Texas,  Marshall
Division,  on October 6, 2005.  In this case,  multiple  plaintiffs  allege that
their growing  crops were damaged by the  application  of Roundup(R)  Glyphosate
within labeled  tolerances and that Monsanto and the other named defendants have
been guilty of false  advertising in the promotion of Roundup Ready  cottonseed.
D&PL is in the process of  investigating  the claims to  determine  the cause or
causes of the alleged  problem.  Pursuant  to the terms of the  February 2, 1996
Roundup  Ready Gene  License and Seed  Service  Agreement  (the  "Roundup  Ready
Agreement"),  D&PL has  tendered  the  defense  of this  claim to  Monsanto  and
requested  indemnity.  Pursuant  to the  Roundup  Ready  Agreement,  Monsanto is
contractually  obligated to defend and indemnify D&PL against all claims arising
out of the failure of the Roundup Ready gene.

All lawsuits related to product claims seek monetary damages. See Note 17 of the
Notes  to  Consolidated  Financial  Statements  in Part II,  Item 8 for  further
details about product claims.

Other Legal Matters

On  December  9,  2003,  Bayer  BioScience  N.V.  and  Bayer   CropScience  GmbH
(collectively  "Bayer") filed a suit in the Federal Court of Australia  alleging
that the  importing,  exporting,  selling and other  alleged  uses by  Deltapine
Australia  Pty  Ltd.,  D&PL's  wholly-owned  Australian  subsidiary  ("Deltapine
Australia"),  of Bollgard II cottonseed infringes Bayer's Australian patent that
claims an alleged invention entitled "Prevention of Bt Resistance  Development."
The suit  seeks an  injunction,  damages  and  other  relief  against  Deltapine
Australia.   Deltapine   Australia  disputes  the  validity,   infringement  and
enforceability  of  Bayer's  patent.  On April  16,  2004,  Deltapine  Australia
responded to the suit, denying  infringement and asserting  affirmative defenses
and cross claims. The suit is in pretrial proceedings.

In July 2003, D&PL received a notice from Monsanto asserting that disputes exist
among Monsanto,  D&PL and D&M Partners, a partnership of D&PL (90%) and Monsanto
(10%),  pertaining to matters under the Bollgard and Roundup Ready  Licenses for
the United  States and matters under  license  agreements  for Argentina and the
Republic of South  Africa.  In August 2003,  D&PL and D&M Partners  responded to
Monsanto's positions on each issue and notified Monsanto of additional disputes,
each concerning  Monsanto's  compliance with its obligations  under the Bollgard
and Roundup Ready Licenses for the United States. In accordance with the dispute
resolution provisions of the subject agreements,  the issues raised in Monsanto,
D&PL and D&M Partners'  notices were  submitted to a panel of senior  executives
(the "Executive Panel"). Monsanto subsequently withdrew from the Executive Panel
the issue involving the license  agreements for the Republic of South Africa and
submitted to the Executive Panel one additional issue of  interpretation  of the
Bollgard and Roundup Ready Licenses for the United  States.  Issues arising from
operations in Argentina and issues  involving  technology fees and interest have
been settled without material  financial impact on the Company and are no longer
in dispute.  On May 20,  2004,  Monsanto  submitted  to  arbitration  before the
American Arbitration Association two unresolved issues: whether D&M Partners has
paid Monsanto all royalties due and whether D&PL has made unauthorized transfers
of materials  containing Monsanto  technology.  In this arbitration  proceeding,
Monsanto  seeks an  adjudication  of its alleged right to terminate the Bollgard
and Roundup Ready  Licenses,  to dissolve D&M Partners,  to obtain an accounting
and to  receive  monetary  damages  and a return  or  destruction  of  materials
containing Monsanto technologies. D&PL denies the claims asserted by Monsanto in
the arbitration filing and has filed appropriate  responses to Monsanto's claims
and filed  three  counterclaims  based on the  issues  submitted  by D&PL to the
Executive Panel. The parties are currently conducting discovery. The Arbitration
Panel has set an August 2006 final hearing  date. On November 8, 2004,  Monsanto
submitted  one new  claim  allegedly  involving  a  dispute  under  the  license
agreements to the Executive Panel. This issue has been resolved by the Executive
Panel.  On March 31, 2005,  D&PL submitted an issue  involving an  international
license under the 1996 Option Agreement between Monsanto and D&PL for resolution
by the Executive Panel. The Executive Panel has that claim under  consideration.
D&PL is committed to participating in good faith resolution of issues in dispute
through arbitration or through the Executive Panel, as applicable.

In October 2002,  Transportes Darkepe Ltda, a Brazilian trucking company,  filed
suit in a local  court in the State of Parana,  Brazil,  against an  employee of
D&PL Brasil Ltda. ("D&PL Brasil"),  a Brazilian subsidiary of D&PL, and Localiza
Rent a Car  ("LRC"),  alleging  that the  employee  had  caused a motor  vehicle
accident  resulting  in property  damage to a truck owned by the  plaintiff.  In
December  2002,  D&PL  Brasil  was joined as a  defendant  on the basis that the
rental car driven by the employee had been rented in its name.  The case remains
pending in pretrial  proceedings.  The damages sought,  including  interest,  is
approximately  $49,000.  The employee and D&PL Brasil are being defended and are
indemnified in this litigation by the respective  insurance carriers for LRC and
D&PL.

In January 2001,  Sure Grow Seed Inc. ("Sure Grow"),  an indirect  subsidiary of
D&PL, gave notice to Ozbugday Tarim Isletmeleri ve Tohumculuk A.S.  ("OTIT"),  a
Turkish seed  company,  of  termination  (effective  at the end of the 2001 crop
year) of OTIT's exclusive  distributorship for cottonseed of Sure Grow varieties
in the  Republic of Turkey.  OTIT  refused to  acknowledge  the validity of this
termination.  In  October  2002,  Sure  Grow  and  the  Turkish  Branch  of Turk
Deltapine, Inc. ("Turk Deltapine'"), D&PL's local affiliate in Turkey, commenced
a civil  action in a Turkish  commercial  court  seeking an  injunction  against
continued  sales of Sure  Grow  varieties  by OTIT.  OTIT  filed a  counterclaim
seeking an injunction  against Turk  Deltapine's  marketing of seed of Sure Grow
varieties  in alleged  violation  of OTIT's  exclusive  distribution  rights and
monetary  damages for lost profits in an amount to be  determined.  In May 2005,
the court in which the case is pending, reversing a prior advisory opinion, held
that  the law of the  State  of  Alabama,  governs  the  termination  of  OTIT's
distributorship  and the  January  2001  notice of  termination  was  timely and
effective.  Consistent  with this decision,  the court rejected OTIT claims that
Turk  Deltapine  has been  involved  in unfair  competition  against  OTIT.  The
decision of the court has been  appealed by OTIT.  Both OTIT and Turk  Deltapine
have  continued to distribute  cotton  planting  seed of Sure Grow  varieties in
Turkey.

In June 2004, D&PL filed an application with the Turkish Ministry of Agriculture
to gain intellectual property protection of certain of D&PL's proprietary cotton
varieties  under  Turkey's  new law  protecting  breeders'  rights for new plant
varieties,  which was enacted in January 2004. On November 3, 2004, the Ministry
of  Agriculture  denied  protection  under  Turkish law for all but one of these
varieties.  In  December  2004,  D&PL  filed a  petition  with the  Ministry  of
Agriculture requesting  reconsideration of its decision denying protection.  The
Ministry of Agriculture is still considering D&PL's petition.  D&PL also filed a
petition in January  2005 in the  Administrative  Court of Ankara  requesting  a
decision granting  intellectual  property  protection of D&PL's varieties.  This
petition is currently pending before the Administrative Court.

In December 1999,  Mycogen Plant Science,  Inc.  ("Mycogen") filed a suit in the
Federal Court of Australia  alleging that Monsanto  Australia  Ltd.,  Monsanto's
wholly-owned Australian subsidiary, and Deltapine Australia have been infringing
two of Mycogen's  Australian  patents by making,  selling,  and licensing cotton
planting seed expressing insect resistance. The suit seeks an injunction against
continued sale of seed containing  Monsanto's  Ingard(R) gene and recovery of an
unspecified amount of damages.  Trial of this matter commenced on March 7, 2005,
and  concluded  on April 6, 2005.  D&PL is  awaiting a decision  from the Court.
Consistent with its commitments, Monsanto has agreed to defend D&PL in this suit
and to indemnify D&PL against damages, if any are awarded. Monsanto is providing
separate  defense  counsel for D&PL.  D&PL is  assisting  Monsanto to the extent
reasonably necessary.

A corporation owned by the son of D&PL's former  Guatemalan  distributor sued in
1989  asserting  that D&PL violated an agreement  with it by granting to another
entity an  exclusive  license in certain  areas of Central  America and southern
Mexico. The suit seeks damages of 5,292,459 Guatemalan quetzales  (approximately
$696,329 at October 31, 2005 exchange  rates) and an injunction  preventing D&PL
from distributing seed through any other licensee in that region. The Guatemalan
court,  where this  action is  proceeding,  has twice  declined  to approve  the
injunction  sought.  D&PL  continues to make seed  available for sale in Central
America and Mexico.

D&PL vs. Monsanto Company and Pharmacia Corporation

On December  20,  1999,  Monsanto  withdrew its  pre-merger  notification  filed
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act")
effectively  terminating  Monsanto's efforts to gain government  approval of the
merger  of  Monsanto  with D&PL  under the May 8,  1998,  Merger  Agreement.  On
December  30,  1999,  D&PL  filed  suit  (the  "December  30 Suit") in the First
Judicial District of Bolivar County,  Mississippi,  seeking, among other things,
the  payment  of the $81  million  termination  fee due  pursuant  to the merger
agreement,  compensatory  damages and punitive damages. On January 2, 2000, D&PL
and Monsanto  reached an agreement  whereby D&PL would  withdraw the December 30
Suit without  prejudice  for the purpose of  negotiating  a settlement of D&PL's
claims, and Monsanto would immediately pay the $81 million.  On January 3, 2000,
Monsanto  paid to D&PL the  termination  fee of $81  million as  required by the
merger agreement.  On January 18, 2000, after  unsuccessful  negotiations,  D&PL
filed  a  suit  (the  "January  18  Suit")  reinstating  essentially  all of the
allegations  contained  in the  December  30 Suit.  The  January 18 Suit by D&PL
against  Monsanto  seeks,  among  other  things,  in  excess  of $1  billion  in
compensatory and $1 billion in punitive damages for breach of contract under the
merger agreement  between the parties.  D&PL alleges that Monsanto failed to use
its best  efforts,  commercially  reasonable  efforts,  and/or  reasonable  best
efforts to obtain  antitrust  approval from the U.S.  Department of Justice,  as
required  under the terms of the merger  agreement.  D&PL also seeks damages for
breach of the January 2, 2000,  agreement  pursuant to which the parties were to
negotiate  for two weeks to resolve  the dispute  over  failure of the merger to
close.

The parties  litigated for several months in 2000 over the appropriate  forum to
hear the  case.  On July 17,  2000,  the  Delaware  Court of  Chancery  rejected
Monsanto's  attempt to maintain  the action in Delaware and returned the parties
to the  Circuit  Court  for the  First  Judicial  District  of  Bolivar  County,
Mississippi.

On December 18, 2000, D&PL amended its complaint to include a claim for tortious
interference with prospective  business relations on the grounds that Monsanto's
unreasonable  delay prevented the  consummation of the merger and kept D&PL from
being in a position to enter into transactions and relationships  with others in
the industry.  In light of the merger of Monsanto into Pharmacia & Upjohn, Inc.,
after the filing of the original complaint, D&PL named both Pharmacia Corp. (the
renamed  existing  defendant) and Monsanto  Company as defendants in the amended
complaint.

In January,  2001, Monsanto filed a motion for summary judgment on the breach of
contract claims,  alleging that D&PL suffered no cognizable  damages as a result
of the  failed  merger.  Monsanto  also  filed a motion  to  dismiss  (or in the
alternative  for summary  judgment)  with respect to the  tortious  interference
claim, arguing that it was entitled to 1) dismissal of the action on the grounds
that D&PL's amended  complaint did not satisfy any of the elements of a tortious
interference  claim  and,  thus,  did not state a viable  claim;  and 2) summary
judgment  because D&PL has not  suffered  any damages as a result of  Monsanto's
actions.  On November 15, 2001, the Circuit Court denied the defendants'  motion
for summary  judgment on the breach of contract  claims,  holding  that the case
presents  issues  for  trial by jury  including  the  existence  and  extent  of
benefit-of-the-bargain  damages.  The Court also  denied  defendants'  motion to
dismiss or for summary judgment on D&PL's claim for tortious  interference  with
business relationships.

In June, 2003, the original trial judge to whom this case was assigned,  retired
and the case was assigned to a new trial court judge.

On September 12, 2003, Monsanto amended its answer to include four counterclaims
against D&PL, alleging breach of contract,  fraudulent inducement, and negligent
misrepresentation.  The fraudulent  inducement  and negligent  misrepresentation
claims allege that D&PL misrepresented the status of the Department of Justice's
investigation  into D&PL's 1996  acquisition of the Sure Grow companies prior to
the signing of the merger  agreement.  The breach of contract claim alleges that
D&PL  failed to notify  Monsanto  that D&PL had  sustained  a  material  adverse
change, where the alleged material adverse change relates to some of the matters
for which D&PL seeks  consequential  damages in this  litigation.  The breach of
contract  claim also alleges that D&PL failed to use its  contractually-required
efforts to inform  Monsanto that  Monsanto was not using  contractually-required
efforts to complete the transaction. Monsanto is seeking unspecified damages for
its  counterclaims,  including  the $81  million  paid by  Monsanto to D&PL as a
termination fee and related expenses.  D&PL answered the counterclaims,  denying
all liability, and intends to vigorously defend against these counterclaims.  On
December 21, 2004,  Monsanto  filed a motion to amend its answer to withdraw two
of its four counterclaims,  specifically the fraudulent inducement and negligent
misrepresentations counterclaims.

On  December  5, 2003,  Monsanto  filed a motion for  partial  summary  judgment
relating  to one method  that D&PL had used to  calculate  its  damages,  and on
October  8,  2004,  the  Court  granted  Monsanto's   motion.   D&PL  sought  an
interlocutory  appeal  of this  ruling  to the  Mississippi  Supreme  Court.  On
February 14, 2005, the Mississippi Supreme Court granted D&PL's petition to hear
its appeal. The Mississippi Supreme Court also agreed to hear D&PL's appeal of a
discovery  ruling relating to documents that Monsanto  claimed to be immune from
disclosure under the  attorney-client  privilege and work product doctrine.  The
original  trial judge had ordered  Monsanto to produce the documents and the new
trial judge has ordered D&PL to return a significant portion of them.

On January 3, 2005,  Monsanto filed two additional  motions for partial  summary
judgment.  Both  motions  seek  summary  judgment  on certain  aspects of D&PL's
damages. On February 17, 2005, D&PL filed a motion with the trial court to amend
its complaint to add a claim against Monsanto for fraudulently  inducing D&PL to
extend the  deadline  to  complete  the merger with  Monsanto.  The  Mississippi
Supreme  Court has  stayed  the  proceedings  in the  trial  court  pending  the
resolution of the two interlocutory appeals.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our stock trades on the New York Stock  Exchange  (the "NYSE") under the trading
symbol DLP. The range of closing prices for these shares for the last two fiscal
years, as reported by the NYSE, was as follows:

Common Stock Data          1st Qtr       2nd Qtr         3rd Qtr        4th Qtr
-----------------        ----------    ----------      -----------    ----------

FYE August 31, 2005
Market Price Range - Low   $25.22         $26.16           $24.76         $24.70
                   - High   27.48          30.49            28.82          27.48


FYE August 31, 2004
Market Price Range - Low   $22.62         $24.28           $22.80         $20.90
                   - High   25.40          26.63            25.82          25.80

Dividends totaling $0.51 and $0.46 per share on common and preferred shares were
paid in 2005 and 2004,  respectively.  The Board of Directors  anticipates  that
quarterly  dividends of $0.15 per share will  continue to be paid in the future;
however,  the  Board of  Directors  reviews  this  policy  quarterly.  Aggregate
dividends  paid  on  common  shares  in  2005  were  $19.1  million  and  should
approximate $21.7 million in 2006.  Aggregate dividends paid on preferred shares
in 2005 were $0.5 million and should  approximate  $0.6 million in 2006.  In the
first quarter of 2006, the Board of Directors authorized a quarterly dividend of
$0.15 per share to be paid on December 14, 2005,  to  shareholders  of record on
November 30, 2005.

On  October  31,  2005,  there were  approximately  20,000  shareholders  of our
36,083,334 outstanding common shares.

Equity Compensation Plan Information

The following table reflects the described information as of August 31, 2005:

<TABLE>
<S>                                                      <C>                         <C>                                <C>
                                        Number of securities
                                          to be issued upon              Weighted average               Number of securities
                                             exercise of                  exercise price               remaining available for
                                        outstanding options,         of outstanding options,        future issuance under equity
          Plan category                  warrants and rights           warrants and rights                compensation plan
----------------------------------     ------------------------     ---------------------------     -----------------------------

Equity compensation plans
approved by security holders
      Stock Options                           3,704,182                      $ 23.30                         2,397,676
      Restricted Stock & Restricted
        Stock Units                             167,748                            -                         1,932,252

Equity compensation plans not
approved by security holders                          -                            -                                 -
</TABLE>
Issuer Purchases of Equity Securities

On June 30, 2005,  D&PL's Board of Directors  authorized a new share  repurchase
program to buy up to an additional  $50 million of the  Company's  common stock.
The Company anticipates that repurchases will be implemented over time through a
variety of methods,  which  generally  will include open market  purchases.  The
timing  and  amount of  repurchases  under  the  program  will  depend on market
conditions,  legal restrictions and other factors. The adoption of the June 2005
repurchase  program  replaced  the previous  stock  repurchase  plan,  which was
adopted in February 2000.
<PAGE>

The following  table presents the number of shares  purchased  monthly under the
Company's stock repurchase  program for the three-month  period ended August 31,
2005:
<TABLE>
<S>                                                  <C>           <C>                     <C>                     <C>
                                                                                                              Approximate Dollar
                                                 Total                          Total Number of Shares       Value of Shares that
                                               Number of        Average          Purchased as Part of        May Yet Be Purchased
                                                Shares        Price Paid       Publicly Announced Plan          Under the Plan
                 Period                        Purchased       per Share
-----------------------------------------     ------------    ------------    --------------------------    -----------------------

June
(June 1, 2005 to June 30, 2005)                       -               -                         -                  $  2,494,671
July
(July 1, 2005 to July 31, 2005)                       -               -                         -                  $ 50,000,000
August
(August 1, 2005 to August 31, 2005)             110,000          $25.52                   110,000                  $ 47,192,594
                                              ------------                    --------------------------
Total                                           110,000          $25.52                   110,000                  $ 47,192,594
                                              ============                    ==========================

There were no shares  purchased  in the  quarter  other  than  those  authorized
pursuant to the June 2005 stock repurchase plan.
</TABLE>
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA
<TABLE>
<S>                                             <C>              <C>             <C>            <C>             <C>

FINANCIAL HIGHLIGHTS                           (In thousands, except per share amounts)
------------------------------------------------------------------------------------------------------------------------------------
                                               As of and for the Years Ended August 31,
------------------------------------------------------------------------------------------------------------------------------------

                                              2005            2004            2003            2002           2001
                                           -----------     ------------    -----------     -----------    ------------
Operating Results:
Net sales and licensing fees                 $366,085        $312,765        $283,799        $259,509       $307,092
Special charges and unusual
   items(1)                                         -               -            (962)              -         (6,301)
In-process research and development
   and related transaction costs(2)                 -         (38,532)              -               -              -
Net income                                     42,557           5,316          27,805          30,339         32,307
Balance Sheet Summary:
Current assets                               $356,679        $375,475        $355,261        $308,468       $337,737
Current liabilities                           263,013         226,225         204,050         174,124        208,041
Working capital                                93,666         149,250         151,211         134,344        129,696
Total assets                                  439,184         457,023         431,552         383,142        411,521
Long-term debt                                  7,271          16,486           1,557           1,176          2,836
Stockholders' equity                          164,023         209,726         217,107         202,207        188,408
Per Share Data:
Net income - Diluted                            $1.08           $0.13           $0.70           $0.76          $0.81
Book value                                       4.32            5.48            5.70            5.27           4.90
Cash dividends per common share                  0.51            0.46            0.27            0.20           0.15
Weighted average number of shares
used in net income per share
calculation -
   Diluted                                     39,370          39,670          39,594          39,781         40,111

------------------------------------------------------------------------------------------------------------------------------------

(1)  In 2003, we reported (a) a $0.6 million special charge for the closings of
     two U.S. locations and (b) a $0.4 million special charge for reductions in
     the number of employees at an international wholly-owned subsidiary and an
     international joint venture. In 2001, we reported (a) a $3.0 million
     special charge for the closing of a delinting plant and a write down of
     other long-lived assets to be disposed of and (b) a $3.3 million charge for
     severance pay related to the plant closing and reductions in operations and
     corporate staffs.
(2)  In 2004, we recorded a $38.5 million charge for a write off of in-process
     research and development and related transaction expenses related to our
     August 24, 2004 acquisition of global licenses to develop and commercialize
     Syngenta's insect resistance technology in cottonseed.
</TABLE>

<PAGE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

OVERVIEW/OUTLOOK

We  reported  record  revenues  for the second  year in a row for the year ended
August 31, 2005. In addition,  the  operating  results of our core business were
the highest in the Company's ninety year history. Our record results were due to
higher sales in both our domestic and international segments during 2005. In our
domestic  segment,  sales  increased  by 18% over 2004,  despite a reduction  in
soybean seed sales. Domestic licensing fees from cottonseed sales increased over
2004 due to trait fee price increases  enacted by Monsanto and higher unit sales
of stacked gene products.  Since we recognize  greater revenue and profitability
from stacked gene  products,  our  business has  benefited  greatly from farmers
increased purchases of these products over cottonseed products containing either
an  insect-resistant  trait or a herbicide  tolerant trait alone.  We also saw a
substantial increase in sales of our higher value products, such as DP 555 BG/RR
and DP 444 BG/RR. For the second  consecutive  year, these products were the two
most widely  planted  cottonseed  varieties,  making up almost  one-third of all
cotton acres planted in the U.S. according to the USDA. According to a September
2005 USDA report,  U.S. cotton plantings increased to 14.2 million acres in 2005
as compared to 13.7 million acres in 2004. Normally,  such as increase in cotton
acres would enhance our earnings and generate additional unit sales. However, we
believe  farmers  decreased  the amount of seeds  planted per acre this year and
therefore  our unit  sales  increased  only  slightly.  Soybean  seed  sales and
profitability  for 2005 were  lower  than 2004  which  diminished  our  domestic
results.  Soybean  seed  results  were lower due to a shortage  of  inventories,
primarily in our most popular Group V varieties  due to lack of seed  production
caused by inclement weather that occurred during the 2004 harvest.

International operating income increased almost 60% and sales increased over 11%
in 2005 as compared to the prior year,  primarily due to strong  revenue  growth
due to price  increases and higher unit sales in  Australia,  Brazil and Turkey,
and through  increased export sales to Greece,  Spain and Mexico.  Many of these
markets increased their area planted to cotton in 2005 and new product offerings
in some markets resulted in increased demand for our products.  In China,  sales
declined at both of our joint  ventures  due to a reduction  in cotton  acres as
well as strong competition from local varieties.

Strategic Transactions and Events

In August,  2004, we announced the acquisition of global licenses to develop and
commercialize  innovative insect  resistance  technology in cotton from Syngenta
Crop Protection AG  ("Syngenta").  In addition,  we obtained  licenses to a wide
range of other Syngenta  enabling  technologies  that may be used to develop new
products in both cottonseed and soybean seed. In return for these  licenses,  we
will pay Syngenta  $46.8 million in  installments  due  primarily  over the next
three years. A portion of this amount represents  contingent payments.  Once the
licensed  traits are  commercialized,  we will receive 70% of the net  licensing
revenues  generated from these products.  We have recently  decided to focus our
development efforts on a dual insect stack combination of these Syngenta traits,
which we expect to be a combination of VIP3A and Cry1Ab genes.  Depending on the
timing  of  regulatory  approval,  we plan to have a  limited  quantity  of seed
containing  these  traits  available  for sale as early as 2008.  We  expect  to
commercialize the dual insect traits with a glyphosate tolerance trait beginning
in 2009, subject to regulatory approval. We expect to incur incremental expenses
of approximately $3.0 million related to development of VipCot products in 2006.
See "Acquired  In-Process  Research and Development"  located in this Item 7 for
further discussion.

In January 2003, we announced a  collaboration  agreement with Dow  AgroSciences
LLC  ("DAS")  under which we will  develop,  test,  and  evaluate  elite  cotton
varieties containing DAS insect resistant traits. We are continuing to work with
these  traits.  In  October  2004,  DAS  announced  it  had  received  full  EPA
registration for its WideStrike Insect Protection technology. DAS commercialized
the  first   cottonseed   products   containing   Widestrike  in  2005.  We  may
commercialize  varieties containing DAS insect resistance technology if we reach
a commercialization  agreement. To date no such commercialization  agreement has
been reached.

In May  2002,  we  established  DeltaMax  Cotton  LLC  ("DeltaMax"),  a  limited
liability company jointly owned with Verdia,  Inc.  ("Verdia"),  a subsidiary of
Maxygen,  Inc. In July,  2004,  Verdia was acquired by DuPont,  which we believe
brings potential for additional investment capital, strategic focus and critical
mass to our collaboration,  which is aimed at developing  value-added traits for
cotton.  We are currently  developing traits for  insect-resistance,  glyphosate
tolerance and nematode  resistance  for cotton.  We are  currently  transforming
cotton plants for both the insect resistance and glyphosate tolerance traits. We
expect to invest up to $20 million over the next five to eight years to fund our
portion of DeltaMax.

Other Matters

We are continuing to rapidly develop new product offerings containing Monsanto's
second generation traits, Bollgard II and Roundup Ready Flex. On March 15, 2005,
Monsanto announced it had obtained U.S.  regulatory  clearance for Roundup Ready
Flex cotton.  We had  substantial  seed  production  this year of new  varieties
containing  these traits and are planning to commercially  launch these products
in 2006. We anticipate  commercializing  up to ten new products  containing both
the  Bollgard  II and Roundup  Ready Flex genes or the Roundup  Ready Flex genes
alone in 2006. We expect to have sufficient  seed of these  varieties  available
for  sale to plant  one to two  million  acres  next  season.  The  actual  seed
quantities  available of these new products  will depend on a number of factors,
including final raw material  purchases and quality assurance data. In addition,
we are continuing to develop products  containing  Syngenta's  VipCot technology
and  expanded  field  testing of VipCot  products in 2005.  We are  focusing our
efforts on developing  varieties  containing dual insect genes from Syngenta and
plan a limited  commercial launch of these varieties in 2008,  depending on when
full  regulatory  approval is  obtained.  In  addition,  our joint  venture with
Verdia,   Inc.  (a  subsidiary  of  DuPont),   DeltaMax  Cotton  LLC,  continues
development  of novel cotton  traits in the areas of  glyphosate  tolerance  and
insect resistance.

We are continuing to take steps to enhance value by returning excess cash to our
shareholders.  On May 24, 2005, we completed the purchase of 2,374,940 shares of
our common stock pursuant to a modified  "Dutch  auction"  tender offer that was
announced on April 20, 2005.  The shares were  purchased at $27.00 per share for
an  aggregate  purchase  price of  $64,123,380.  During  2005,  we  purchased an
aggregate 3.2 million  shares of our common stock for a total  purchase price of
$85.5 million.  This includes shares purchased in the open market as well as the
shares  repurchased  through the "Dutch auction"  tender offer. In addition,  on
June 30, 2005, our Board of Directors  authorized a new share repurchase program
to buy up to an  additional  $50  million  of our common  stock.  The timing and
amount of these repurchases will depend on market conditions, legal restrictions
and other factors. On October 20, 2005, the Board declared a first quarter, 2006
dividend of $0.15 per share,  payable on December  14, 2005 to  shareholders  of
record on November 30, 2005.  The Board will  continue to consider  alternatives
for uses of excess cash,  including  additional share  repurchases and increased
dividends as well as other options.

We continue to seek opportunities to expand our International  business into new
markets,  including India and parts of Africa.  Our subsidiary,  D&PL India Seed
Private  Ltd.,  has  expanded  research  and  testing  of  our  hybrid  products
throughout  India in 2005.  In addition,  we recently  have started a new cotton
research program in the Punjab region of Northern India.  Results of our testing
programs from 2004 and 2005 have shown many of our products are  competitive  in
India in terms of both yield and fiber quality.

We continue to pursue our litigation against Monsanto Company and Pharmacia.  On
February 14, 2005, the Mississippi  Supreme Court granted our petitions  seeking
interlocutory  appeals of two rulings  issued by the Circuit Court for the First
Judicial District of Bolivar County,  Mississippi ("Circuit Court"). The appeals
were consolidated, and we expect that the Mississippi Supreme Court will rule on
these appeals  during 2006.  After their rulings are issued,  we anticipate  the
Circuit Court will set a trial date.  The  Mississippi  Supreme Court has stayed
the  proceedings  in the Circuit Court pending  resolution of the  interlocutory
appeals. See Part I, Item 3 for further discussion.

Separately,  we are in an  arbitration  with  Monsanto over a series of disputes
relating  to the  parties' Bollgard  and  Roundup  Ready  licenses  and  related
agreements. The arbitration,  which is being conducted according to the rules of
the American Arbitration Association, is in the discovery phase. The Arbitration
Panel has set an August  2006 final  hearing  date.  See Part I, Item 3 for more
information.

Outlook

Future growth in sales and earnings  will be dependent on (a) cotton  acreage in
the U.S.  and around the world,  (b) the  successful  development  and launch of
varieties  containing second  generation  traits from Monsanto,  Bollgard II and
Roundup  Ready Flex,  (c) our  ability to continue to develop and  commercialize
varieties that have increased yield potential and enhanced fiber qualities,  (d)
our ability to continue to profitably expand our international  operations,  (e)
the  successful  development  and  launch  of  the  Syngenta  insect  resistance
technology,  and (f) our ability to successfully develop and launch technologies
that we will own or have more  control  over (such as those being  developed  by
DeltaMax  Cotton,  LLC).  Due to our market  position in the U.S.,  U.S.  cotton
acreage has a significant effect on our sales and earnings.

As we have  previously  announced,  we expect to provide 2006 earnings  guidance
later this year. The commodity price of cotton has been lower in 2005 over price
levels for most of 2004.  We  anticipate  2005  cotton  yields to be near record
levels again despite  difficult  weather  conditions  during the growing  season
(hot, dry weather) and at harvest (three hurricanes) in much of the U.S. market.
We believe it is too early to estimate  2006 cotton  plantings at this time.  We
expect to have adequate supplies of seed of most of our popular cotton varieties
for 2006 plantings,  despite the impact of inclement  weather  conditions during
harvest this year. Due to inclement  weather  during  soybean  harvesting in our
Mid-South and Illinois soybean seed production  areas,  supplies of some popular
soybean  varieties may be limited.  However,  final  cottonseed and soybean seed
supply amounts are not yet available as processing and quality assurance testing
have not yet occurred for most of the 2006 product offerings.

Internationally,  we continue to expand our global  reach and we seek to improve
the operating  results of our existing ex-U.S.  operations.  In 2005,  operating
income   improved   significantly   due  to  increased  sales  in  most  of  our
international  locations.  Due to the strong  Brazilian  Real and weaker  cotton
prices in 2005,  we  expect  acreage  in 2006 in  several  of our  international
locations to be reduced as compared to 2005 planting levels.  In particular,  we
are already  seeing a reduction in cotton  plantings in Brazil due to the strong
Brazilian Real and because  farmers  experienced  lower overall cotton yields in
2005 due to poor weather  conditions  during the growing  season.  Despite early
indications  of lower sales in Brazil for 2006,  we believe  this  market  holds
great potential for strong earnings in the future because of the recent approval
of  Bollgard.  Although the Bollgard  gene was  approved for  planting,  we only
recently received approval to commercialize one Bollgard cotton variety, DP 90B,
as the  Brazilian  regulations  require  each  variety to be  approved  prior to
commercial sale. We have imported a small amount of DP 90B into Brazil, which we
intend to have planted to produce  commercial  seed quantities for sales in 2007
and beyond. In addition,  we continue to test additional  Bollgard  varieties in
order to obtain  government  approval to sell. We also  anticipate the Brazilian
government  will  approve  Monsanto's  Roundup  Ready gene in  cotton.  Once the
Roundup Ready gene is approved, we will seek approval of Roundup Ready varieties
for sale in Brazil. We are currently working with Monsanto to develop strategies
for  commercialization  of the  Bollgard  and Roundup  Ready traits in Brazil in
order to  minimize  farmer  saved  seed.  In  Australia,  we  believe  increased
competition  from local products will result in lower demand for our products in
2006 and thus  lower  sales  and  profitability.  Cottonseed  sales  and  farmer
plantings have only just begun in our Southern  Hemisphere  markets and will not
occur  until  the  Spring  and  Summer  of 2006  in  countries  in the  Northern
Hemisphere.  Thus, it is too early to accurately forecast  International results
for 2006. We will  continue to develop new  businesses in markets such as India,
Pakistan and portions of Africa.

We continue to develop  and test  varieties  containing  new  technologies  from
multiple sources.  We are developing  products with Monsanto's second generation
traits,  Bollgard II and Roundup  Ready Flex.  In addition,  we continue to work
with Syngenta's  VipCot traits so that these products may be  commercialized  as
quickly as regulatory  approval is received.  Both Monsanto and Syngenta  traits
are being  introgressed into our most elite cotton germplasm.  We believe we are
uniquely  positioned  to rapidly  introduce  new  technologies  to both U.S. and
ex-U.S.  cotton farmers due to the strength and breadth of our breeding programs
and  germplasm  base,  our  technical  services  capabilities,  know-how,  brand
recognition and market position.

Share Repurchase Program/Dividend Policy

In February 2000, the Board of Directors authorized a program for the repurchase
of up to $50 million of D&PL's common stock. The shares  repurchased  under this
program were used to provide for option exercises,  the potential  conversion of
D&PL's Series M Convertible  Non-Voting  Preferred  shares and for other general
corporate purposes. At August 31, 2005, D&PL had repurchased 2,229,900 shares at
an aggregate purchase price of approximately  $47,505,000 under this program. In
2005,  D&PL  purchased  676,700  shares  at  an  aggregate   purchase  price  of
$17,928,000  under this  plan.  This  repurchase  plan has been  terminated  and
replaced by the June 2005 plan discussed below.

On May 24, 2005,  D&PL completed the purchase of 2,374,940  shares of its common
stock pursuant to a modified  "Dutch auction" tender offer that was announced on
April 20, 2005, under a new plan separately  approved by the Board of Directors.
The shares were  purchased for $27.00 per share for an aggregate  purchase price
of $64,123,380.  The Company also incurred  associated expenses of approximately
$675,000 in connection with the acquisition of these shares  (primarily  related
to legal and  advisory  services)  that have been  recorded  as a  component  of
treasury stock.

On June 30, 2005,  D&PL`s Board of Directors  authorized a new share  repurchase
program to buy up to an additional $50 million of the Company's common stock. We
expect to  repurchase  shares under this plan over time and through a variety of
methods,  which  generally  will include open market  purchases.  The timing and
amount of repurchases under the program will depend on market conditions,  legal
restrictions and other factors. The adoption of the June 2005 repurchase program
replaced  the  February  2000 plan.  At August 31,  2005,  D&PL had  repurchased
110,000 shares at an aggregate purchase price of approximately  $2,807,000 under
this plan.

Currently,  the  quarterly  dividend is $0.15 per share.  The Board of Directors
reviews the dividend policy quarterly.  Assuming the dividend rate is maintained
through 2006, the aggregate payments will be $21.7 million to the holders of the
36.1 million common shares outstanding and $0.6 million to the holder of the 1.1
million  preferred  shares  outstanding.  In  addition,  the Board of  Directors
continues to review uses of the  Company's  cash position and  alternatives  for
maximizing its value to shareholders.  See "Risks and Uncertainties"  located in
this Item 7.
<PAGE>

RESULTS OF OPERATIONS

Net Sales and Licensing Fees

In 2005, our consolidated net sales and licensing fees increased 17.0% to $366.1
million from 2004 sales of $312.8 million. This increase was primarily driven by
the  following:  (a) an  increase  in the  licensing  fees  charged  per bag, an
increase in sales of  stacked-gene  picker  products and lower  payments on crop
loss and replant programs, (b) an increase in cottonseed prices and higher sales
of our higher-priced, elite varieties, (c) a slight increase in cottonseed units
sold, and (d) an increase in international  revenues,  primarily from in-country
sales in Australia and Brazil and from export sales to Mexico, Greece and Spain.
Sales in Australia  increased due to the introduction of additional  Bollgard II
varieties  and an  increase  in the area  planted  to  cotton.  Sales in  Brazil
increased due to stronger  demand for our products and higher  prices.  Mexico's
sales  increase  was  primarily  attributable  to  an  increase  in  demand  for
stacked-gene  products and higher cotton acreage, and the increase in Greece and
Spain was due to stronger sales to our  distributors to increase their inventory
levels.

In 2004, our consolidated net sales and licensing fees increased 10.2% to $312.8
million from 2003 sales of $283.8 million. This increase was primarily driven by
the  following:  (a) an increase in licensing fee revenues due to lower payments
on crop loss and replant programs, an increase in the licensing fees charged per
bag, and an increase in sales of stacked-gene  picker products,  (b) an increase
in cottonseed prices and higher sales of our higher-priced, elite varieties, (c)
an increase in units of soybean seed sold, and, (d) an increase in international
revenues,  primarily from in-country  sales in Australia,  Brazil and Turkey and
from export  sales to Mexico and  Colombia.  Australia,  Brazil and Turkey sales
increased due to stronger demand for our products and new product introductions.
Colombia  sales  increased due to the recent  approval of  transgenic  varieties
containing  Monsanto's  Bollgard  technology  while  Mexico's sales increase was
primarily attributable to higher cotton acreage.

Gross Profit

Our  consolidated  gross profit  increased to $132.0 million in 2005 compared to
$109.0  million  in  2004.   Consolidated   gross  profit  as  a  percentage  of
consolidated  net sales and  licensing  fees  increased to 36.1 % in the current
year, from 34.9% in 2004. The revenue  increase  attributable to price increases
and the adoption of higher  priced  products and  increased  licensing  fees was
partially  offset by lower  margins on soybean  sales  caused by higher costs of
soybean raw materials, as well as an increase in cottonseed production costs.

Our  consolidated  gross profit  increased to $109.0 million in 2004 compared to
$100.7  million  in  2003.   Consolidated   gross  profit  as  a  percentage  of
consolidated  net sales and licensing fees decreased  slightly to 34.9% in 2004,
from 35.5% in 2003. The revenue increase  attributable to the adoption of higher
priced products was more than offset by lower margins on soybean sales caused by
higher  costs of  soybean  raw  materials  and an  increase  in both  cottonseed
production  costs  and  in  the  provision  for  damaged,  obsolete  and  excess
cottonseed inventory.

Operating Expenses

Operating  expenses  decreased  to $60.3  million in 2005 from $87.4  million in
2004. The decrease in operating  expenses in 2005 versus 2004 was  approximately
$27.1  million.  This decrease  primarily  relates to a $38.5 million charge for
acquired in-process research and development costs related to the acquisition of
technology  licenses included in 2004, offset by higher research and development
costs  associated  with new  research  programs and new  technology  testing and
higher  general  and   administrative   costs,   primarily   related  to  higher
professional  fees  for  legal  matters  and  Sarbanes-Oxley   compliance,   and
additional compensation costs.

Operating  expenses  increased  to $87.4  million in 2004 from $44.0  million in
2003.  Operating  expenses for 2004 include a $38.5 million  charge for acquired
in-process  research  and  development  and  transaction  costs  related  to the
acquisition of technology licenses. Operating expenses for 2003 included special
charges of $1.0 million.  Excluding the in-process  research and development and
related  transaction costs in 2004 and the special charges recorded in 2003, the
increase  in  operating  expenses in 2004  versus  2003 was  approximately  $6.0
million.  This increase  primarily  relates to higher  research and  development
costs   associated  with  new  technologies  and  an  increase  in  general  and
administrative expenses, primarily related to higher professional fees.

Research and Development Expenses

Research and  development  expenses  increased 25% to $23.0 million in 2005 from
$18.4  million in 2004.  The increase was  primarily  attributable  to increased
costs of working with new breeding  programs and new technologies  (Bollgard II,
Roundup  Ready  Flex and  VipCot),  including  the  addition  of new  personnel,
increased testing program expenses and related compensation costs.

Research and development  expenses increased 10.2% to $18.4 million in 2004 from
$16.7  million in 2003.  The increase was  primarily  attributable  to increased
costs of working with new technologies,  including the addition of new personnel
and increased testing program expenses.
<PAGE>

Selling Expenses

Selling expenses  increased 15.4% to $13.5 million in 2005 from $11.7 million in
2004.  This  increase  was  primarily   attributable   to  higher   advertising,
promotional and compensation costs.

Selling  expenses  increased 6.4% to $11.7 million in 2004 from $11.0 million in
2003. This increase was primarily attributable to higher advertising costs.

General and Administrative Expenses

General and  administrative  expenses  increased  26.6% to $23.8 million in 2005
from $18.8  million in 2004.  The increase  primarily  related to an increase in
professional  fees  incurred,  mainly due to legal  matters  and  Sarbanes-Oxley
compliance and additional compensation costs.

General and  administrative  expenses  increased  22.1% to $18.8 million in 2004
from $15.4  million in 2003.  The increase  primarily  related to an increase in
professional fees.

In-Process Research and Development and Related Transaction Costs

In 2004, we recorded a $38.5  million  charge  associated  with the write-off of
acquired in-process  research and development and related  transaction  expenses
related to our August 24,  2004  acquisition  of global  licenses to develop and
commercialize Syngenta insect resistance technology in cottonseed. See "Acquired
In-Process  Research  and  Development"  located  in  this  Item  7 for  further
information.

Interest Income

Net interest income increased to $2.2 million in 2005,  compared to net interest
income of $1.5 million in 2004.  In 2005,  interest  income was $3.3 million and
interest  expense was $1.1  million.  Higher  interest  rates earned on our cash
balances  resulted in higher  interest  income  during  2005.  Interest  expense
increased  due to a note  payable  to  Syngenta  related  to the  2004  acquired
in-process research & development transaction.

Net interest income increased to $1.5 million in 2004,  compared to net interest
income of $1.1 million in 2003.  In 2004,  interest  income was $1.9 million and
interest  expense was $0.4  million.  Higher  interest  rates earned on our cash
balances resulted in higher interest income during 2004.

Other Income/Expense

Other  expense  decreased to $4.3 million in 2005,  compared to $10.5 million in
2004.  This  decrease is  primarily  attributable  to decreased  legal  expenses
related to our suit against  Pharmacia and  Monsanto.  In 2005, we incurred $4.3
million, or $0.07 per diluted share,  related to  Monsanto/Pharmacia  litigation
expenses,  compared to $10.9 million,  or $0.18 per diluted  share,  in 2004. In
2005, these expenses decreased due to the Mississippi  Supreme Court staying the
proceedings  pending the resolution of two matters.  See Part I, Item 3 for more
information.

Other expense  decreased to $10.5 million in 2004,  compared to $12.2 million in
2003.  This  decrease is  primarily  attributable  to decreased  legal  expenses
related to our suit against  Pharmacia and Monsanto.  In 2004, we incurred $10.9
million, or $0.18 per diluted share,  related to  Monsanto/Pharmacia  litigation
expenses, compared to $13.0 million, or $0.21 per diluted share, in 2003.

Net Income and Earnings Per Share

Net income  applicable to common  shares was $42.0  million,  $4.8 million,  and
$27.5  million  in 2005,  2004 and  2003,  respectively.  Net  income  per share
(diluted)  was  $1.08,  $0.13  and $0.70 in 2005,  2004 and 2003,  respectively.
<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

We do not currently utilize off-balance sheet arrangements.

CONTRACTUAL OBLIGATIONS (AMOUNTS IN THOUSANDS)

We have  certain  obligations  and  commitments  to make future  payments  under
contracts.  Current estimates of our future payments under these obligations are
shown in the following table.

<TABLE>
<S>                                                                                                 <C>
                                                         Payments Due in Fiscal Years Ending August 31,
                                  ----------------------------------------------------------------------------------------------

                                     Total             2006           2007         2008          2009         2010       2011
                                                                                                                         and
                                                                                                                         beyond
                                  -------------    -------------    ---------    ----------     --------     -------     --------

Long-Term Obligations (1)         $     20,550     $     11,050     $  7,050     $   2,450      $     -      $    -      $     -
Operating Lease Obligations              1,657              994          467            83           79          34            -
Purchase Obligations (2)                 4,330            4,330            -             -            -           -            -
                                  -------------    -------------    ---------    ----------     --------     -------     --------
Total                             $     26,537     $     16,374     $  7,517     $   2,533      $    79      $   34      $     -
                                  =============    =============    =========    ==========     ========     =======     ========

(1)  Long-Term  Obligations  are  comprised of payments  related to the Syngenta
transaction (see "Acquired  In-Process Research and Development" located in this
Item  7 for  information  concerning  non-contingent  payments  related  to  the
Syngenta transaction) and payments required under research and license contracts
with other third parties.

(2) The amount reported as "Purchase  Obligations"  for 2006 relates to payments
to be made to cotton  growers and  producers  for a portion of seed that we will
purchase in the first and second  quarters of 2006.  At August 31, 2005,  we had
open  purchase  contracts  with many cotton and soybean  growers,  producers and
conditioners  that may  require  us to  purchase  minimum  amounts of cotton and
soybean seed if that seed meets our quality assurance standards. The amount that
we will  pay for the  seed  that we  accept  is  based  on  market  prices  that
fluctuate.  The amount of seed that we will  accept and the unit  prices that we
will pay cannot be known until that seed is delivered to us (which  should occur
in the first and second quarters of 2006) and is tested for quality.
</TABLE>

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Overview

Management's  discussion and analysis of our financial  condition and results of
operations  should  be read  in  conjunction  with  our  consolidated  financial
statements  and related notes  appearing in Item 8 of this Annual Report on Form
10-K for the  fiscal  year ended  August  31,  2005.  The  preparation  of these
financial  statements requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements,  and
the reported amounts of revenues and expenses during the reporting period.

We have  identified  below the accounting  policies that involve those estimates
and  assumptions  that  we  believe  are  critical  to an  understanding  of our
financial statements. Our management has discussed the development and selection
of each critical  accounting  estimate with the Audit  Committee of our Board of
Directors,  and the Audit Committee has reviewed the related  disclosures below.
Since application of these accounting policies involves the exercise of judgment
and use of estimates, actual results could differ from those estimates.

Revenue Recognition

Revenues  from  domestic  seed sales are  recognized  when the seed is  shipped.
Revenues  from  Bollgard,  Bollgard  II and  Roundup  Ready  licensing  fees are
recognized when the seed is shipped. Domestically, the licensing fees charged to
farmers for  Bollgard,  Bollgard II and Roundup  Ready  cottonseed  are based on
pre-established  planting  rates for each of nine  geographic  regions  and, for
years prior to 2004,  considered the estimated  number of seed contained in each
bag which varied by variety,  location  grown,  and other factors.  Beginning in
2004,  picker and  stripper  cottonseed  products  were sold in bags  containing
approximately  250,000  seed or bulk boxes  containing  approximately  8,000,000
seed. Acala and Pima cottonseed products continue to be sold in 50-pound bags.

International  export revenues are recognized upon the later of when the seed is
shipped or the date  letters of credit (or  instruments  with  similar  security
provisions) are confirmed.  International export sales are not subject to return
except in limited cases in Mexico and Colombia. All other international revenues
from the sale of  planting  seed,  less  estimated  reserves  for  returns,  are
recognized  when  the  seed  is  shipped,  except  in  Australia  where  certain
immaterial revenues are recognized when collected.

All of our domestic seed products (including those containing Bollgard, Bollgard
II and Roundup Ready  technologies)  are subject to return and credit risk,  the
effects  of which  vary from year to year.  The  annual  level of  returns  and,
ultimately,  net sales are influenced by various factors,  principally commodity
prices and weather conditions occurring in the spring planting season during our
third and fourth quarters.  We provide for estimated  returns as sales occur. To
the extent actual  returns differ from  estimates,  adjustments to our operating
results are recorded when such differences become known, typically in our fourth
quarter.  All significant returns occur or are accounted for by fiscal year end.
Therefore,   the  application  of  this  estimate  could  affect  our  quarterly
information.

Domestically,  we promote  our cotton and soybean  seed  directly to farmers and
sell our seed through  distributors  and dealers.  We also offer  various  sales
incentive  programs for seed and  participate  in such  programs  related to the
Bollgard,  Bollgard II and Roundup  Ready  technology  fees offered by Monsanto.
Under these programs,  if a farmer plants his seed and the crop is lost (usually
due to inclement  weather) by a certain date, a portion of the price of the seed
and technology fees are forgiven or rebated to the farmer if certain  conditions
are met.  The amount of the refund and the impact to D&PL depends on a number of
factors including whether the farmer can replant the crop that was destroyed. We
record monthly estimates to account for these programs.  The majority of program
rebates occur during the second,  third,  and fourth  quarters.  Essentially all
material  claims under these  programs  have  occurred or are  accounted  for by
fiscal year end.

Provision for Damaged, Obsolete and Excess Inventory

Each year,  we record a provision  to adjust our  reserves  related to inventory
based on our  estimate of seed that will not pass our quality  assurance  ("QA")
standards at year end, or is deemed excess based on our desired seed stock level
for a particular  variety  ("dump  seed").  Seed can fail QA standards  based on
physical  defects  (i.e.,  cut seed,  moisture  content,  discoloration,  etc.),
germination  rates,  or transgenic  purities.  The amount  recorded as inventory
provision in a given year is calculated based on the total quantity of inventory
that has not  passed QA  standards  at any  fiscal  year  end,  any seed that is
expected to deteriorate  before it can be sold and seed deemed to be excess.  In
establishing  the  provision,  we  consider  the  scrap  value of the seed to be
disposed.  An initial  estimate of the needed provision is made at the beginning
of each year and recorded over the course of the year.  Adjustments  for changes
in our estimates are made monthly, if necessary.

See Note 2 of the Notes to Consolidated  Financial Statements in Part II, Item 8
for further details about inventory reserves.

Deferred Income Taxes

Deferred income taxes are estimated based upon temporary differences between the
income  and loss that we  report in our  financial  statements  and our  taxable
income and loss as determined  under  applicable tax laws. We estimate the value
of  deferred  income  taxes  based on  existing  tax  rates  and  laws,  and our
expectations  of future  earnings.  For  deferred  income  taxes,  we  applied a
composite statutory income tax rate of approximately 38%.

We are required to evaluate the likelihood of our ability to generate sufficient
future  taxable  income that will enable us to realize the value of our deferred
tax assets. If, in our judgment,  we determine that we will not realize deferred
tax assets,  then valuation  allowances are recorded.  As of August 31, 2005, we
had recorded net deferred tax assets of  approximately  $17.1 million  primarily
related to capitalizing  the licenses  acquired from Syngenta in 2004 for income
tax  reporting  purposes.  We  estimate  that our  deferred  tax assets  will be
realized;  therefore, we have not recorded any valuation allowances as of August
31, 2005.

We use management  judgment and estimates when estimating deferred taxes. If our
judgments and estimates prove to be inadequate, or if certain tax rates and laws
should change,  our financial results could be materially  adversely impacted in
future periods.

See Note 8 of the Notes to Consolidated  Financial Statements in Part II, Item 8
for further details about income taxes.

Contingent Liabilities

A liability is contingent if the amount is not presently  known,  but may become
known in the  future  as a result of the  occurrence  of some  uncertain  future
event. D&PL estimates its contingent liabilities based on management's estimates
about the  probability  of outcomes  and its  ability to  estimate  the range of
exposure.   Accounting  standards  require  that  a  liability  be  recorded  if
management  determines that it is probable that a loss has occurred and the loss
can be reasonably estimated. In addition, it must be probable that the loss will
be confirmed by some future event. As part of the estimation process, management
is required to make  assumptions  about  matters that are by their nature highly
uncertain.   The   assessment  of  contingent   liabilities,   including   legal
contingencies  and  income  tax  liabilities,   involves  the  use  of  critical
estimates, assumptions and judgments.  Management's estimates are based on their
belief that future  events will validate the current  assumptions  regarding the
ultimate  outcome of these  exposures.  However,  there can be no assurance that
future events, such as court decisions or I.R.S. positions, will not differ from
management's assessments.  Whenever practicable,  management consults with third
party experts (attorneys,  accountants,  claims administrators,  etc.) to assist
with  the  gathering  and  evaluation  of  information   related  to  contingent
liabilities.
<PAGE>

ACQUIRED IN-PROCESS RESEARCH & DEVELOPMENT

In August 2004, we entered into an agreement  with  Syngenta to purchase  global
licenses to develop and commercialize  Syngenta's insect resistance genes (known
as VIP3A and Cry1Ab) in cottonseed.  In addition, we purchased licenses to other
Syngenta  enabling  technologies  that may be useful in developing  valuable new
products for use in  cottonseed  and soybean  seed.  In return for the licenses,
D&PL is to pay  Syngenta  $46.8  million.  The  purchase  price  will be paid in
installments  over seven years.  Fixed payments of $37.6 million will be made in
installments  through the first quarter of 2008. In 2008, D&PL will make certain
decisions which will determine whether the additional $9.2 million in contingent
payments will be made.

For the year  ended  August 31,  2004,  we  recorded  a charge of  approximately
$38,532,000  related to the write off of the  acquired  in-process  research and
development (IPR&D) and related transaction costs.  Approximately $36,225,000 of
the purchase  price  represents  the fair value of the  non-contingent  payments
related to the acquired  IPR&D  projects that had not yet reached  technological
feasibility  and had no  alternative  future use.  Accordingly,  this amount was
immediately  expensed  in the  2004  Consolidated  Statement  of  Income  on the
acquisition date. The remaining $2,307,000 of the charge incurred represents the
related  transaction costs,  primarily  professional fees. The assigned value of
each of the technologies acquired was as follows: VIP3A - $19,113,000;  Cry1Ab -
$16,812,000; Other - $300,000.

The VIP3A and Cry1Ab projects  ("VipCot")  represent new  technologies  that are
expected to compete with insect resistance technologies currently on the market,
including technologies that are currently contained in varieties sold by us. The
VIP3A and Cry1Ab genes produce  proteins that are toxic to certain  lepidopteran
larvae,  the principal  cotton pests in many cotton growing areas.  The acquired
VIP3A  gene  provides  for a novel mode of action  (for  attacking  larvae  that
consume the protein).  VipCot will require further  development by us, including
the introgression  into our elite germplasm.  We estimate that we will incur the
following costs to complete the projects: 2006 - $3,000,000;  2007 - $4,000,000;
2008  -  $4,000,000;  2009  -  $2,500,000.  These  projects  will  also  require
regulatory  approval  from  the Food and  Drug  Administration  (FDA),  the U.S.
Department of Agriculture (USDA), and the U.S.  Environmental  Protection Agency
(EPA)  before  commercialization  can begin.  Syngenta is  responsible  for U.S.
regulatory  approval.  Syngenta has advised us that they expect U.S.  regulatory
approval to be obtained for the selected  VIP3A/Cry1Ab  combination of events in
2008, prior to the planting season. If the regulatory  approval process proceeds
as expected,  we may begin limited introduction of the VIP3A/Cry1Ab  combination
of events in 2008. Once commercialization begins, we will owe Syngenta a royalty
equal to 30% of the net  license  fees  received,  after  deduction  of  certain
expenses,  from these technologies.  We will retain the remaining 70% of the net
license fees.

There is no assurance that these technologies will result in commercially viable
products or that such  technologies  are  developed in the time frame or for the
amounts  estimated to complete.  Also,  there is no  assurance  that  regulatory
approval will be obtained for the products.

LIQUIDITY AND CAPITAL RESOURCES

In the United  States,  we purchase seed from contract  growers in our first and
second fiscal quarters. Seed conditioning,  treating and packaging commence late
in the first  fiscal  quarter and  continue  through the third  fiscal  quarter.
Seasonal cash needs  normally  begin to increase in the first fiscal quarter and
cash  needs  peak in the  third  fiscal  quarter.  Cash is  generated  and  loan
repayments,  if  applicable,  normally  begin in the middle of the third  fiscal
quarter and are typically completed by the first fiscal quarter of the following
year.  In some cases,  we offer  customers  financial  incentives  to make early
payments.  To  the  extent  we  attract  early  payments  from  customers,  bank
borrowings, if any, are reduced.

In the U.S., we record revenue and accounts receivable for technology  licensing
fees on  transgenic  seed sales upon  shipment,  usually in our second and third
fiscal  quarters.  Receivables  from seed sales generally  become due in May and
June. The licensing fees are due in September, at which time we receive payment.
We then pay Monsanto its royalty for the Bollgard, Bollgard II and Roundup Ready
licensing  fees,  which is recorded as a component of cost of sales. As a result
of the timing of these events,  licensing fees receivable and royalties  payable
peak at our fiscal year end, August 31.

The seasonal nature of our business  significantly impacts cash flow and working
capital requirements.  Historically,  we have maintained credit facilities,  and
used early  payments  by  customers  and cash from  operations  to fund  working
capital  needs.  In the past,  we have  borrowed on a  short-term  basis to meet
seasonal working capital needs. However, since 2002, we have used cash generated
from  operations  and other  available cash to meet working  capital  needs.  We
continue  to evaluate  potential  uses of our cash for  purposes  other than for
working  capital needs.  On May 24, 2005, we completed the purchase of 2,374,940
shares of our common stock pursuant to a modified  "Dutch  auction" tender offer
that was announced on April 20, 2005.  The shares were  purchased for $27.00 per
share for an aggregate  purchase price of  $64,123,380.  Other potential uses of
our cash in the future may be the  acquisition  of, or funding  of,  alternative
technologies  (such as, or in addition to,  DeltaMax and Syngenta) that could be
used to enhance our product  portfolio and  ultimately  our  long-term  earnings
potential  and/or an investment  in new markets  outside the U.S. such as India.
Another  potential  use would be the  repurchase  of our shares  pursuant to our
recently  announced  $50 million  share  repurchase  program.  We are  currently
considering other potential uses of our cash,  including increasing the dividend
rate or repurchasing  additional shares depending on market  considerations  and
other factors. As a part of this analysis, we continue to evaluate the Company's
liquidity needs and its capital structure.

On April 15, 2005,  we entered into an unsecured  $75 million  credit  agreement
(the "Credit  Agreement")  with Bank of America,  N.A. (the "Bank").  The Credit
Agreement  provides  for  unsecured  revolving  loans up to a maximum  aggregate
amount outstanding of $75 million, plus Letters of Credit which were outstanding
prior to the execution of the Credit Agreement in the amount of approximately $2
million.  Of the total commitment,  $50 million represents a seasonal commitment
available  from October to July of each year.  The Credit  Agreement  expires on
July 31, 2006, at which time all outstanding  amounts under the Credit Agreement
would be due and payable,  subject to the Company's  right to request a one-year
extension and the Bank's  acceptance of that request.  On October 10, 2005,  the
Company  requested  an  extension  of  the  Credit  Agreement  and  negotiations
regarding this extension are underway.

In general,  borrowings  under the Credit Agreement will bear interest at a rate
calculated  according to a Eurodollar  rate, plus 0.55%.  The Eurodollar rate is
generally  the 30-day,  60-day or 90-day LIBOR rate. We will also be required to
pay unused fees of 0.125% annually calculated on the daily-unused portion of the
Credit Agreement.  The primary financial  covenant requires the Company's funded
indebtedness under the Credit Agreement to not exceed 50% of certain current and
long-term assets,  defined in the Credit Agreement and determined as of the last
day of each fiscal quarter.

As of  August  31,  2005,  there  were no loans  outstanding  under  the  Credit
Agreement, other than the existing Letters of Credit as discussed above.

Capital  expenditures  were $6.7  million,  $6.0 million and $8.3 million in the
years ended August 31, 2005,  2004 and 2003,  respectively.  We anticipate  that
capital expenditures will approximate $8.0 to $10.0 million in 2006.

Annual dividends of $0.51, $0.46 and $0.27 per share were paid in 2005, 2004 and
2003,  respectively.  Aggregate dividends paid on common and preferred shares in
2005,  2004 and 2003 were  $19.6  million,  $18.1  million  and  $10.6  million,
respectively.  On November 2, 2005, we announced that our Board of Directors had
declared a $0.15 per share  dividend  for the first  quarter of 2006.  The first
quarter  dividend will be paid on December 14, 2005 to shareholders of record on
November 30, 2005. The Board  anticipates that quarterly  dividends of $0.15 per
share will  continue to be paid in the future;  however,  the Board of Directors
reviews this policy quarterly.  Based on a quarterly dividend of $0.15 per share
in 2006, aggregate preferred and common stock dividends should approximate $22.3
million in 2006.

The  Company  purchases  its common  stock in the open  market from time to time
depending on market conditions and other factors.  The shares repurchased may be
used to provide for option  exercises,  conversion  of our Series M  Convertible
Non-Voting  Preferred  shares and for other  general  corporate  purposes.  From
September 1, 2004 to August 31, 2005, the Company  purchased  approximately  3.2
million  shares of its  common  stock at an  aggregate  purchase  price of $85.5
million. This includes shares purchased in the open market as well as the shares
repurchased through the "Dutch auction" tender offer discussed above.

Cash provided from  operations,  cash on hand, early payments from customers and
borrowings under the credit facility, if necessary, should be sufficient to meet
the Company's 2006 working capital needs.

RISKS AND UNCERTAINTIES

Various  statements  included  herein  constitute  "forward-looking  statements"
within the  meaning of the  Private  Securities  Litigation  Reform Act of 1995.
Forward-looking  statements are based on current  expectations and are indicated
by words or  phrases  such as  "anticipate,"  "estimate,"  "expect,"  "project,"
"believe," "is or remains optimistic,"  "currently  envisions" and similar words
or phrases and involve known and unknown risks,  uncertainties and other factors
which may cause actual  results,  performance or  achievements  to be materially
different  from any future  results,  performance or  achievements  expressed or
implied by such forward-looking  statements.  Forward-looking statements include
statements  relating  to  such  matters  as  anticipated  financial  performance
(including when earnings estimates are discussed),  existing products, technical
developments,   new  products,   new  technologies,   research  and  development
activities,  and similar  matters.  These  forward-looking  statements are based
largely  on  our  expectations  and  are  subject  to  a  number  of  risks  and
uncertainties, many of which are beyond our control. Actual results could differ
materially from these  forward-looking  statements as a result of, among others,
changes  in the  competitive  marketplace,  including  the  introduction  of new
products or pricing changes by our competitors, changes in the economy and other
similar  events.  We undertake no  obligation  to publicly  update or revise any
forward-looking  statements,  whether  as a result  of new  information,  future
events or otherwise. In light of these risks and uncertainties, we cannot assure
you  that  the  forward-looking   information  contained  herein  will  in  fact
transpire.   The  risks  and  uncertainties  that  may  affect  the  operations,
performance,  development  and  results  of our  business  include  those  noted
elsewhere herein and the following:

     Demand for our seed will be affected by  government  programs  and policies
     and by weather in all countries where we sell products and operate.  Demand
     for seed is also  influenced  by commodity  prices,  the cost of other crop
     inputs, and the demand for a crop's end-uses such as textiles, animal feed,
     cottonseed oil, food and raw materials for industrial use.  Weather impacts
     crop yields,  commodity prices and the planting decisions that farmers make
     regarding  both  original   planting   commitments   and,  when  necessary,
     replanting   levels.   These  factors  all  also  influence  the  cost  and
     availability of seed for subsequent seasons.

     The  planting  seed market is highly  competitive,  and our  products  face
     competition  from a number of seed companies,  diversified  crop protection
     product  companies,   agricultural  biotechnology  companies,  governmental
     agencies and academic and scientific institutions.  In addition, several of
     our  distributors/customers  have also  entered  the cotton  planting  seed
     business.  A number of crop protection product and biotechnology  companies
     have seed  production  and/or  distribution  capabilities  to ensure market
     access for new seed products and new technologies that may compete with the
     Bollgard,  Bollgard II and Roundup Ready gene technologies of Monsanto, our
     principal  licensor of such technology.  Our seed products and technologies
     contained therein may encounter substantial  competition from technological
     advances  by others  or  products  from new  market  entrants.  Many of our
     competitors are, or are affiliated with, large  diversified  companies that
     have substantially greater resources than we have.

     We currently are engaged in a dispute  resolution and  arbitration  process
     with  Monsanto,  the  principal  licensor  of  our  cotton  technology  and
     competitor  of  ours  in  the  cotton   planting  seed  business.   In  the
     arbitration,  Monsanto is seeking a determination by the arbitrators of its
     right to terminate certain agreements between our companies,  including the
     Bollgard and Roundup Ready licenses.  In addition, we are currently engaged
     in litigation  with Monsanto  (the January 18 Suit)  concerning  the failed
     merger of the companies.  The result of this litigation (and the process of
     litigating) may materially affect the results of our business. (See Part I,
     Item 3.)

     There is no assurance  that new  technologies  such as the DeltaMax and the
     Syngenta  technologies will result in commercially  viable products or that
     such  technologies  will be  developed in the time frame or for the amounts
     estimated  to  complete  development.  Also,  there  is no  assurance  that
     regulatory approval will be obtained for the products.

     The production,  distribution or sale of crop seed in or to foreign markets
     may  be  subject  to  special  risks,  including  fluctuations  in  foreign
     currency, exchange rate controls, expropriation,  nationalization and other
     agricultural,  economic, tax and regulatory policies of foreign governments
     and shipping disruptions. Particular policies which may affect our domestic
     and  international  operations  include  the use of and the  acceptance  of
     products  that  were  produced  from  plants  that  have  been  genetically
     modified,  the testing,  quarantine and other restrictions  relating to the
     import and export of plants and seed products and the availability (or lack
     thereof) of proprietary  protection for plant products. The absence or lack
     of enforcement of  intellectual  property laws may lead to counterfeit  and
     farmer-saved seed which negatively  impacts our sales. In addition,  United
     States government policies,  particularly those affecting foreign trade and
     investment, may impact our international operations.

     The  publicity  related  to  genetically  modified  organisms  ("GMOs")  or
     products made from plants that contain GMOs may have an effect on our sales
     in the future.  In 2005,  approximately 95% of our cottonseed that was sold
     in the  United  States  contained  either or both of  Monsanto's  Bollgard,
     Bollgard II and  Roundup  Ready gene  technologies,  and 96% of our soybean
     seed sales  contained  the Roundup  Ready gene  technology.  Although  many
     farmers  have  rapidly  adopted  these  technologies,  the  concern of some
     customers and  governmental  entities  over finished  products that contain
     GMOs could impact demand for crops (and  ultimately  seed) raised from seed
     containing such traits.  In addition,  regulatory  approvals for Monsanto's
     Bollgard  and  Bollgard  II  technologies   expire  in  2006.  Monsanto  is
     responsible  for  obtaining  and  maintaining  regulatory  approvals and is
     planning to seek  re-registration  of both  Bollgard  and  Bollgard II, but
     there is no assurance that their efforts will be successful.

     Due to the varying  levels of  agricultural  and social  development of the
     international markets in which we operate and because of factors within the
     particular international markets we target, international profitability and
     growth may be less stable and predictable than domestic  profitability  and
     growth. Furthermore, recent action taken by the U.S. government,  including
     that taken by the U.S.  military in the  aftermath of the tragic  events of
     September 11, 2001,  the war in Iraq,  and  conflicts  between major cotton
     producing  nations,  may serve to further complicate our ability to execute
     our long range ex-U.S.  business  plans because those plans include  future
     expansion into Uzbekistan,  Pakistan and India. World health concerns about
     infectious diseases also affect the conduct of our international business.

     Our customers in many markets,  including the U.S., benefit from government
     subsidy  programs.  The Farm  Security  and  Rural  Investment  Act of 2002
     expires on January 1, 2007  (although  the bill  includes  the 2007  cotton
     planting  season),  and future U.S.  farm subsidy  programs are  uncertain.
     Various  other  countries,  including  Brazil,  have  challenged,  and  may
     continue to challenge,  the  appropriateness of U.S. farm subsidies through
     the World Trade  Organization  ("WTO") or other forums. In particular,  the
     WTO has  ruled  in  Brazil's  favor  in its  challenge  that  certain  U.S.
     subsidies  violate the  provisions of the WTO. It is not clear if, when, or
     to what extent, U.S. subsidies will be modified as a result of this ruling.
     However,  in the event changes to subsidies are made,  they may  negatively
     impact U.S.  farmers.  U.S.  farm  programs,  government  subsidies and WTO
     rulings  impacting such programs may  materially  affect the results of our
     business.

     Overall  profitability  will depend on the factors noted above,  as well as
     worldwide   commodity   prices,   our  ability  to  successfully  open  new
     international  markets,  our  ability to  penetrate  the Texas High  Plains
     market,  the  technology  partners'  ability  to obtain  timely  government
     approval  (and  maintain  such  approval)  for existing and for  additional
     biotechnology  products  on which they and D&PL are  working,  the terms of
     such government approvals, our technology partners' ability to successfully
     defend  challenges  to  proprietary  technologies  licensed  to us and  our
     ability  to  produce  sufficient  commercial  quantities  of  high  quality
     planting seed of these products.  Any delay in or inability to successfully
     complete  these  projects  may affect  future  profitability.  In addition,
     earnings  forecasts do not  consider the impact of potential  transactions,
     their related accounting and other factors, that may be under consideration
     by the Company,  but have not yet been completed or their effect determined
     at the date of a particular filing.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED

In May 2005, the Financial  Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards  ("SFAS") No. 154,  "Accounting  Changes and
Error  Corrections,  a replacement  of APB Opinion No. 20 and SFAS No. 3". Among
other  changes,  SFAS No. 154  requires  that a voluntary  change in  accounting
principle be applied  retrospectively with all prior period financial statements
presented based on the new accounting  principle,  unless it is impracticable to
do so.  SFAS No. 154  provides  that (1) a change in method of  depreciating  or
amortizing  a  long-lived  nonfinancial  asset be  accounted  for as a change in
estimate  (prospectively) that was effected by a change in accounting principle,
and (2) correction of errors in previously issued financial statements should be
termed a  "restatement."  SFAS No. 154 is effective for  accounting  changes and
correction of errors made in fiscal years beginning after December 15, 2005. The
Company does not expect the adoption of this statement to have a material impact
on D&PL's consolidated financial statements.

In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions".  This  statement's  amendments  are based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  Further, SFAS No. 153 eliminates the narrow exception for
nonmonetary  exchanges  of  similar  productive  assets and  replaces  it with a
broader  exception  for  exchanges  of  nonmonetary  assets  that  do  not  have
commercial  substance.  Provisions  of this  statement  are effective for fiscal
periods  beginning after June 15, 2005. The Company does not expect the adoption
of this  statement to have a material  impact on D&PL's  consolidated  financial
statements.

In November 2004, the FASB issued SFAS No. 151,  "Inventory  Costs, an amendment
of ARB No. 43,  Chapter  4," which  clarifies  the types of costs that should be
expensed rather than capitalized as inventory. This statement also clarifies the
circumstances  under  which  fixed  overhead  costs  associated  with  operating
facilities  involved  in  inventory   processing  should  be  capitalized.   The
provisions of SFAS No. 151 are effective for fiscal years  beginning  after June
15, 2005, and may impact certain  inventory costs D&PL incurs after September 1,
2005.  The Company has not  determined  the impact,  if any, that this statement
will have on D&PL's  consolidated  financial  position or results of operations.

SFAS No. 123(R),  "Share-Based  Payment," issued in December 2004, is a revision
of FASB No.  123,  "Accounting  for  Stock-Based  Compensation"  and  supersedes
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees,"  and its related  implementation  guidance.  The  Statement  focuses
primarily on accounting for  transactions  in which an entity  obtains  employee
services in share-based payment transactions.  SFAS No. 123(R) requires a public
entity to measure the cost of  employee  services  received  in exchange  for an
award of equity  instruments  based on the  grant-date  fair  value of the award
(with limited  exceptions).  That cost will be recognized over the period during
which an employee is required to provide service in exchange for the award. This
statement  is  effective  as of the  beginning  of the first  interim  or annual
reporting  period that begins after June 15, 2005.  This statement will apply to
all awards  granted after the required  effective  date and to awards  modified,
repurchased, or cancelled after that date. SFAS No. 123(R) will be effective for
D&PL in the first quarter of fiscal year 2006.  The Company has not yet made any
decisions about how it will adopt SFAS 123(R). However, the pro forma net income
effect of using the fair value method for the years ended August 31, 2005,  2004
and  2003  is  presented  in  Note  1 of the  Notes  to  Consolidated  Financial
Statements  in Part II, Item 8. The pro forma  compensation  costs  presented in
Note 1 of the Notes to Consolidated  Financial  Statemens in Part II, Item 8 and
in our prior filings have been calculated  using a Black-Scholes  option pricing
model and may not be  indicative  of amounts  that  should be expected in future
years. D&PL has not made any decisions about which  option-pricing model is most
appropriate  for future awards.  The Company has not  determined the impact,  if
any, that this statement will have on D&PL's consolidated  financial position or
results of operations.
<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure  relative to  fluctuations in the price of soybean raw material
inventory, foreign currency fluctuations and interest rate changes. From time to
time we enter into various agreements that are considered  derivatives to reduce
our  soybean  commodity  price  risk.  During  the year ended  August 31,  2005,
derivative instruments have not been used to manage foreign currency or interest
rate  risks.  We do not enter into  speculative  hedges or  purchase or hold any
derivative financial instruments for trading purposes.

A  discussion  of  our  accounting  policies  related  to  derivative  financial
instruments  is  included  in  Note 1 of the  Notes  to  Consolidated  Financial
Statements  in Part II, Item 8.  Further  information  on our exposure to market
risk is included in Note 15 of the Notes to Consolidated Financial Statements in
Part II, Item 8.

The fair value of derivative commodity instruments  outstanding as of August 31,
2005, was $10,000. A 10% adverse change in the underlying  commodity prices upon
which  these  contracts  are  based  would  not have a  material  effect  on our
consolidated financial position.

Our earnings are also affected by  fluctuations  in the value of the U.S. dollar
compared to foreign  currencies as a result of transactions in foreign  markets.
We conduct non-U.S. operations through subsidiaries and joint ventures primarily
in Argentina,  Australia,  Brazil, China, South Africa and Turkey. At August 31,
2005,  the  result of a uniform  10%  strengthening  in the value of the  dollar
relative to the currencies in which our transactions  are denominated  would not
cause a material impact on earnings.

For the year ended August 31, 2005,  a 10% adverse  change in the interest  rate
that we earned on our excess cash that we invested  would not have resulted in a
material change to our net interest income or cash flow.

<PAGE>

PART II

ITEM 8.       CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                      INDEX

Financial Statements                                                     Page(s)

The following consolidated financial statements of Delta and Pine Land Company
and subsidiaries are submitted in response to Part II, Item 8:

  Reports of Independent Registered Public Accounting Firm...................32

  Management's Report........................................................34

  Consolidated Statements of Income - for each of the three years in the
     period ended August 31, 2005............................................35

  Consolidated Balance Sheets - August 31, 2005 and 2004.....................36

  Consolidated Statements of Cash Flows - for each of the three years in the
     period ended August 31, 2005............................................37

  Consolidated Statements of Stockholders' Equity and Comprehensive Income
     - for each of the three years in the period ended August 31, 2005.......38

  Notes to Consolidated Financial Statements.................................39

<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Delta and Pine Land Company:

We have audited the accompanying  consolidated  balance sheets of Delta and Pine
Land Company and subsidiaries  (the Company) as of August 31, 2005 and 2004, and
the related consolidated  statements of income,  changes in stockholders' equity
and comprehensive income, and cash flows for each of the years in the three-year
period ended August 31, 2005. These  consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Delta and Pine Land
Company  and  subsidiaries  as of August 31,  2005 and 2004,  and the results of
their  operations  and their cash flows for each of the years in the  three-year
period  ended  August 31,  2005,  in  conformity  with U.S.  generally  accepted
accounting principles.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States), the effectiveness of Delta and Pine
Land Company and subsidiaries  internal  control over financial  reporting as of
August 31, 2005, based on criteria  established in Internal Control - Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission  (COSO),  and  our  report  dated  November  14,  2005  expressed  an
unqualified  opinion on management's  assessment of, and the effective operation
of, internal control over financial reporting.

KPMG LLP

Jackson, Mississippi
November 14, 2005

<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Delta and Pine Land Company:

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Annual Report on Internal  Control Over  Financial  Reporting (see
Part II, Item 9A(c) of the August 31,  2005 Annual  Report on From 10-K of Delta
and Pine Land Company),  that Delta and Pine Land Company and subsidiaries  (the
Company)  maintained  effective internal control over financial  reporting as of
August 31, 2005, based on criteria  established in Internal Control - Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission  (COSO).  The Company's  management is  responsible  for  maintaining
effective  internal  control over financial  reporting and for its assessment of
the   effectiveness   of  internal   control  over  financial   reporting.   Our
responsibility  is to  express  an opinion  on  management's  assessment  and an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our  opinion,  management's  assessment  that Delta and Pine Land Company and
subsidiaries  maintained  effective internal control over financial reporting as
of August  31,  2005,  is fairly  stated,  in all  material  respects,  based on
criteria  established in Internal  Control - Integrated  Framework issued by the
Committee of Sponsoring  Organizations of the Treadway Commission (COSO).  Also,
in our opinion, Delta and Pine Land Company and subsidiaries maintained,  in all
material  respects,  effective  internal control over financial  reporting as of
August 31, 2005, based on criteria  established in Internal Control - Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission (COSO).

We also have audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
Delta and Pine Land Company and subsidiaries as of August 31, 2005 and 2004, and
the related consolidated  statements of income,  changes in stockholders' equity
and comprehensive income, and cash flows for each of the years in the three-year
period ending August 31, 2005,  and our report dated November 14, 2005 expressed
an unqualified opinion on those consolidated financial statements.


KPMG LLP

Jackson, Mississippi
November 14, 2005

<PAGE>

MANAGEMENT'S REPORT:

D&PL is  responsible  for preparing the  consolidated  financial  statements and
related  information  appearing in this Annual  Report on Form 10-K.  Management
believes that the financial statements present fairly D&PL's financial position,
its  results of  operations  and its cash flows in  conformity  with  accounting
principles  generally  accepted in the United States. In preparing its financial
statements, D&PL is required to include amounts based on estimates and judgments
that it believes are reasonable under the circumstances.

D&PL  maintains  accounting  and other  systems  designed to provide  reasonable
assurance  that  financial  records  are  reliable  for  purposes  of  preparing
financial statements and that assets are properly accounted for and safeguarded.
Compliance  with these systems and controls is reviewed by executive  management
and the accounting  staff.  Limitations  exist in any internal  control  system,
recognizing that the system's cost should not exceed the benefits derived.

The  Board  of  Directors  pursues  its   responsibility  for  D&PL's  financial
statements  primarily  through  the  efforts  of its Audit  Committee,  which is
composed  solely of  "independent"  directors  who are not  Company  officers or
employees. The Audit Committee meets as often as it determines is necessary, but
at least four times per year. In addition,  the Audit  Committee  meets with the
independent  auditor  at  least  quarterly.   The  Audit  Committee  also  meets
periodically  with  management  and the head of the internal  audit  function in
separate executive sessions.  The independent auditors have direct access to the
Audit Committee, with and without the presence of management representatives.

<PAGE>

                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                         FOR THE YEARS ENDED AUGUST 31,
                    (In thousands, except per share amounts)

<TABLE>
<S>                                                                            <C>                 <C>                  <C>
                                                                               2005                2004                 2003
                                                                         ------------------   -----------------    -----------------

NET SALES AND LICENSING FEES                                             $       366,085      $       312,765      $       283,799
COST OF SALES                                                                   (234,064)            (203,757)            (183,132)
                                                                         ------------------   -----------------    -----------------
GROSS PROFIT                                                                     132,021              109,008              100,667
                                                                         ------------------   -----------------    -----------------
OPERATING EXPENSES:
   Research and development                                                       23,015               18,436               16,669
   Selling                                                                        13,531               11,693               10,971
   General and administrative                                                     23,760               18,787               15,358
   Special charges                                                                     -                    -                  962
   In-process research and development and related transaction costs                   -               38,532                    -
                                                                         ------------------   -----------------    -----------------
                Total operating expenses                                          60,306               87,448               43,960
                                                                         ------------------   -----------------    -----------------

OPERATING INCOME                                                                  71,715               21,560               56,707
INTEREST INCOME, NET                                                               2,194                1,522                1,100
OTHER EXPENSE                                                                     (4,310)             (10,518)             (12,178)
EQUITY IN NET LOSS OF AFFILIATE                                                   (2,787)              (3,551)              (1,977)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES                                     (1,609)              (2,303)              (1,104)
                                                                         ------------------   -----------------    -----------------
INCOME BEFORE INCOME TAXES                                                        65,203                6,710               42,548
PROVISION FOR INCOME TAXES                                                       (22,646)              (1,394)             (14,743)
                                                                         ------------------   -----------------    -----------------
NET INCOME                                                                        42,557                5,316               27,805
DIVIDENDS ON PREFERRED STOCK                                                        (544)                (491)                (288)
                                                                         ------------------   -----------------    -----------------
NET INCOME APPLICABLE TO COMMON SHARES                                   $        42,013      $         4,825      $        27,517
                                                                         ==================   =================    =================
BASIC EARNINGS PER SHARE                                                 $          1.11      $          0.13      $          0.72
                                                                         ==================   =================    =================
WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - BASIC                                         37,958               38,250               38,113
                                                                         ==================   =================    =================
DILUTED EARNINGS PER SHARE                                               $          1.08      $          0.13      $          0.70
                                                                         ==================   =================    =================
WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - DILUTED                                       39,370               39,670               39,594
                                                                         ==================   =================    =================

The accompanying notes are an integral part of these consolidated statements.
</TABLE>


<PAGE>


                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                AS OF AUGUST 31,
               (In thousands, except share and per share amounts)
<TABLE>
<S>                                                                                     <C>                 <C>
                                                                                        2005                2004

                                                                                  -----------------   ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                         $         93,075    $        149,587
Receivables, net                                                                           228,800             184,759
Inventories                                                                                 26,625              30,151
Prepaid expenses                                                                             1,874               1,923
Deferred income taxes                                                                        6,305               9,055
                                                                                  -----------------   ------------------
    Total current assets                                                                   356,679             375,475
PROPERTY, PLANT AND EQUIPMENT, NET                                                          60,158              61,988
EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED                                        4,183               4,183
INTANGIBLES, net of accumulated amortization of $2,458 and $1,969                            5,960               5,471
OTHER ASSETS                                                                                 1,446               1,594
DEFERRED INCOME TAXES                                                                       10,758               8,312
                                                                                  -----------------   ------------------
TOTAL ASSETS                                                                      $        439,184    $        457,023
                                                                                  =================   ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Current maturities of long-term debt                                              $         10,078     $         5,639
Accounts payable                                                                            18,218              23,784
Accrued expenses                                                                           221,824             187,890
Income taxes payable                                                                        12,893               8,912
                                                                                  -----------------   ------------------
     Total current liabilities                                                             263,013             226,225
                                                                                  -----------------   ------------------
LONG-TERM DEBT                                                                               7,271              16,486
                                                                                  -----------------   ------------------
DEFERRED INCOME TAXES                                                                            -                   -
                                                                                  -----------------   ------------------
MINORITY INTEREST IN SUBSIDIARIES                                                            4,877               4,586
                                                                                  -----------------   ------------------
COMMITMENTS AND CONTINGENCIES (Notes 9 and 17)
                                                                                  -----------------   ------------------

STOCKHOLDERS' EQUITY:
Preferred stock, par value $0.10 per share; 2,000,000 shares authorized
   Series A Junior Participating Preferred, par value $0.10 per share;
          456,989 shares authorized; no shares issued or outstanding;                            -                   -
   Series M Convertible Non-Voting Preferred, par value $0.l0 per share;
          1,066,667 shares authorized, issued and outstanding                                  107                 107
Common stock, par value $0.10 per share; 100,000,000 shares authorized;
          40,928,929 and 40,162,820 shares issued;
          36,099,823 and 38,495,354 shares outstanding                                       4,093               4,016
Capital in excess of par value                                                              81,640              64,250
Retained earnings                                                                          199,742             176,808
Accumulated other comprehensive loss                                                        (4,305)             (3,736)
Treasury stock, at cost; 4,829,106 and 1,667,466 shares                                   (117,254)            (31,719)
                                                                                  -----------------   ------------------
TOTAL STOCKHOLDERS' EQUITY                                                                 164,023             209,726
                                                                                  -----------------   ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $        439,184    $        457,023
                                                                                  =================   ==================

The accompanying notes are an integral part of these consolidated statements.

</TABLE>

<PAGE>


                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED AUGUST 31,
                                 (in thousands)

<TABLE>
<S>                                                                            <C>                  <C>                  <C>
                                                                               2005                 2004                 2003
                                                                         ------------------   -----------------    -----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                             $         42,557     $          5,316     $         27,805
   Adjustments to reconcile net income to net cash provided by operating
      activities:
       Depreciation and amortization                                                8,661                8,364                7,759
       Loss (gain) on sale of assets                                                  115                  189                  (34)
       Noncash component of in-process research and development                         -               22,125                    -
       Equity in net loss of affiliate                                              2,787                3,551                1,977
       Foreign exchange (gain) loss                                                  (101)                 124                 (748)
       Accretion of debt discount                                                     777                    -                    -
       Minority interest in earnings of subsidiaries                                1,609                2,303                1,104
       Compensation expense of restricted stock                                       508                    -                    -
       Change in deferred income taxes                                              2,043              (12,294)               3,315
       Changes in assets and liabilities:
              Receivables                                                         (43,370)             (17,693)             (20,804)
              Inventories                                                           4,183                1,921                7,849
              Prepaid expenses                                                         43                  178                  144
              Intangibles and other assets                                           (540)                 (95)                (133)
              Accounts payable                                                     (6,068)               5,571                2,241
              Accrued expenses                                                     31,796               12,438               30,114
              Income taxes                                                          4,027                3,788               (1,557)
                                                                         ------------------   -----------------    -----------------
              Net cash provided by operating activities                            49,027               35,786               59,032
                                                                         ------------------   -----------------    -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                              (6,669)              (6,049)              (8,298)
  Sale of investments and property                                                    451                  161                   79
  Investment in affiliate                                                          (2,980)              (2,630)              (1,610)
                                                                         ------------------   -----------------    -----------------
              Net cash used in investing activities                                (9,198)              (8,518)              (9,829)
                                                                         ------------------   -----------------    -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments of short-term debt                                                      (5,800)                (277)              (2,109)
  Payments of long-term debt                                                            -               (1,607)                   -
  Dividends paid                                                                  (19,623)             (18,118)             (10,576)
  Proceeds from long-term debt                                                          -                    -                    -
  Proceeds from short-term debt                                                       247                  245                  467
  Minority interest in dividends paid by subsidiaries                              (1,318)              (1,336)                   -
  Payments to acquire treasury stock                                              (85,535)              (5,748)              (6,135)
  Proceeds from exercise of stock options                                          14,103                6,004                2,484
                                                                         ------------------   -----------------    -----------------
              Net cash used in financing activities                               (97,926)             (20,837)             (15,869)
                                                                         ------------------   -----------------    -----------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES                                          1,585                 (129)                 860
                                                                         ------------------   -----------------    -----------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                              (56,512)               6,302               34,194
CASH AND CASH EQUIVALENTS, beginning of year                                      149,587              143,285              109,091
                                                                         ------------------   -----------------    -----------------
CASH AND CASH EQUIVALENTS, end of year                                   $         93,075     $        149,587     $        143,285
                                                                         ==================   =================    =================

SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid during the year for:
      Interest, net of capitalized interest                              $              -     $             10     $             61
      Income taxes                                                       $         13,804     $          8,904     $         13,399
   Noncash operating activities:
      Deferred taxes resulting from change in minimum pension liability  $          1,276     $            339     $            678
   Noncash financing activities:
      Tax benefit of stock option exercises                              $          2,856     $          3,459     $            825

The accompanying notes are an integral part of these consolidated statements.
</TABLE>


<PAGE>


                           DELTA AND PINE LAND COMPANY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
               FOR THE YEARS ENDED AUGUST 31, 2003, 2004 AND 2005
                      (In thousands, except per share data)

<TABLE>
<S>                                           <C>    <C>                 <C>    <C>               <C>    <C>            <C>
                                                                                           Accumulated
                                                                Capital in                    Other                       Total
                                      Preferred      Common      Excess of     Retained   Comprehensive    Treasury    Stockholders'
                                        Stock        Stock       Par Value     Earnings   Income/(Loss)      Stock        Equity
                                     ------------ ------------- ------------ ----------- --------------- ------------- ------------

Balance at August 31, 2002           $      107   $      3,931  $    51,563  $   172,381 $     (5,939)   $    (19,836) $   202,207
                                                                                                                       ------------
Net income                                    -              -            -       27,805            -               -       27,805
Minimum pension liability
      adjustment, net of
      tax of $0.7 million                     -              -            -            -       (1,122)              -       (1,122)
Foreign currency translation
      adjustment                              -              -            -            -        1,661               -        1,661
Unrealized gain on hedging
      instruments                             -              -            -            -          (42)              -          (42)
                                                                                                                       ------------
      Total comprehensive income                                                                                            28,302
                                                                                                                       ------------
Exercise of stock options and tax
      benefit of stock option
      exercises                               -             22        3,287            -            -               -        3,309
Cash dividends, $0.27 per share               -              -            -      (10,576)           -               -      (10,576)
Purchase of common stock                      -              -            -            -            -          (6,135)      (6,135)
                                     ------------ ------------- ------------ ------------ -------------- ------------  ------------
Balance at August 31, 2003                  107         3,953        54,850      189,610       (5,442)        (25,971)     217,107
                                                                                                                       ------------
Net income                                    -             -             -        5,316            -               -        5,316
Minimum pension liability
      adjustment, net of
      tax of $0.3 million                     -             -             -            -          558               -          558
Foreign currency translation
      adjustment                              -             -             -            -        1,544               -        1,544
Unrealized loss on hedging
      instruments                             -             -             -            -         (396)              -         (396)
                                                                                                                       ------------
      Total comprehensive income                                                                                             7,022
                                                                                                                       ------------
Exercise of stock options and tax
      benefit of stock option
      exercises                               -            63         9,400            -            -               -        9,463
Cash dividends, $0.46 per share               -             -             -      (18,118)           -               -      (18,118)
Purchase of common stock                      -             -             -            -            -          (5,748)      (5,748)
                                     ------------ ------------- ------------ ------------ -------------- ------------  ------------
Balance at August 31, 2004                  107         4,016        64,250      176,808       (3,736)        (31,719)     209,726
                                                                                                                       ------------
Net income                                    -             -             -       42,557            -               -       42,557
Minimum pension liability
      adjustment, net of
      tax of $1.3 million                     -             -             -            -       (2,096)              -       (2,096)
Foreign currency translation
      adjustment                              -             -             -            -        1,169               -        1,169
Unrealized gain on hedging
      instruments                             -             -             -            -          358               -          358
                                                                                                                       ------------
      Total comprehensive income                                                                                            41,988
                                                                                                                       ------------
Exercise of stock options and tax
      benefit of stock option
      exercises                              -            77         16,882            -            -               -       16,959
Amortization of deferred compensation                                   508                                                    508
Cash dividends, $0.51 per share               -             -             -      (19,623)           -               -      (19,623)
Purchase of common stock                      -             -             -            -            -         (85,535)     (85,535)
                                     ------------ ------------- ------------ ------------ ------------- -------------  ------------
Balance at August 31, 2005           $      107   $     4,093   $    81,610  $   199,742  $    (4,305)  $    (117,254) $   164,023
                                     ============ ============= ============ ============ ============= ============== ============
</TABLE>


The accompanying notes are an integral part of these consolidated statements.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Delta and Pine Land Company and  subsidiaries  (the  "Company" or "D&PL") breed,
produce,  condition  and market  cotton and soybean  planting  seed.  D&PL farms
approximately  5,500 acres largely for research  purposes and the  production of
cotton and soybean foundation seed.

D&PL has annual  agreements  with various growers to produce seed for cotton and
soybeans.  The  growers  plant  seed  purchased  from  D&PL and  follow  quality
assurance  procedures  required for seed  production.  If the grower  adheres to
established  Company quality assurance  standards  throughout the growing season
and if the seed  meets  Company  quality  standards  upon  harvest,  D&PL may be
obligated to purchase  specified  minimum  quantities of seed at prices equal to
the  commodity  market  price of the  seed,  plus a grower  premium.  D&PL  then
conditions the seed for sale as planting seed.

Basis of Presentation

The  accompanying  financial  statements  include the accounts of Delta and Pine
Land  Company  and its  subsidiaries.  Significant  inter-company  accounts  and
transactions  have  been  eliminated  in  consolidation.  D&PL's  investment  in
50%-owned  affiliate  DeltaMax  Cotton,  LLC is  accounted  for using the equity
method.

Reclassifications

Certain  prior year  amounts  have been  reclassified  to conform  with the 2005
presentation.

Special Charges/Unusual Items

During 2003,  D&PL recorded a $1.0 million  charge  associated  with  additional
expenses  for the closing of its  Chandler,  Arizona  plant,  the closing of its
facility in Centre,  Alabama,  and  reductions in the number of employees at its
wholly-owned subsidiary in Australia and at its joint venture in Hebei Province,
People's  Republic of China.  These charges are included in "SPECIAL CHARGES" in
the accompanying Consolidated Statements of Income.

At August 31, 2003  essentially  all  amounts  related to the closing of the two
U.S. facilities and headcount reductions noted above had been utilized.

Cash Equivalents

Cash equivalents  include overnight  repurchase  agreements and other short-term
investments having an original maturity of less than three months.

Property, Plant and Equipment

Property,  plant and equipment are stated at cost. Depreciation and amortization
are provided for financial  reporting  purposes using the  straight-line  method
over the estimated useful lives of the assets.  Accelerated methods are used for
income tax  purposes.  The  estimated  useful  lives of the  various  classes of
property, in years, are as follows:

   Land improvements                                          5-20
   Buildings and improvements                                10-35
   Machinery and equipment                                    3-15
   Germplasm                                                 10-15
   Breeder and foundation seed                                  40

The  germplasm,   breeder  and  foundation   seed  were  purchased  as  part  of
acquisitions and include amounts for specifically  identified  varieties and for
breeding stocks.  The amounts  associated with specific  varieties are amortized
over the  expected  commercial  life of those  varieties.  Breeding  stocks  are
amortized  over 40 years,  since they can be  revitalized  from time to time and
remain viable indefinitely after such revitalization.
<PAGE>

Intangible Assets

Identifiable  intangible  assets  consist  of  trademarks,   patents  and  other
intangible assets and are being amortized using the straight-line  method over 5
to 40 years.

D&PL  incurred  in-process  research  and  development   ("IPR&D")  and  related
transaction costs of $38,532,000 in 2004, including amounts assigned to acquired
in-process technology of $36,225,000.  The value assigned to acquired in-process
technology  was determined by identifying  those  acquired  specific  in-process
research and  development  projects  that would be  continued  and for which (a)
technology  feasibility had not been  established at the  acquisition  date, (b)
there was no  alternative  future use, and (c) the fair value was estimable with
reasonable reliability.

Foreign Currency Translation

Financial  statements  of foreign  operations  where the local  currency  is the
functional  currency are translated using exchange rates in effect at period end
for assets and  liabilities  and average  exchange  rates  during the period for
results  of  operations.  Translation  adjustments  are  reported  as a separate
component  of  stockholders'  equity.  Gains and losses  from  foreign  currency
transactions are included in earnings.

Fair Value of Financial Instruments

The fair value of D&PL's  financial  instruments  at August  31,  2005 and 2004,
which include cash, receivables,  derivatives, accounts payable, and payments to
be made to Syngenta, approximates their carrying value.

Income Taxes

D&PL uses the  liability  method of  accounting  for  income  taxes.  Under this
method,  deferred tax assets and liabilities are determined based on differences
between  financial  reporting  and tax bases of assets and  liabilities  and are
measured using enacted tax rates and laws.

Revenue Recognition

Revenues from domestic seed sales are recognized when seed is shipped.  Revenues
from  Bollgard(R),  Bollgard  II(R)  and  Roundup  Ready(R)  licensing  fees are
recognized when the seed is shipped. Domestically, the licensing fees charged to
farmers for  Bollgard,  Bollgard II and Roundup  Ready  cottonseed  are based on
pre-established  planting rates for each of nine geographic regions and consider
the number of seed contained in each container (bag or bulk box).  International
export  revenues  are  recognized  upon the later of when seed is shipped or the
date  letters  of  credit  (or  other  instruments)  are  confirmed.  Generally,
international  export  sales are not  subject  to return.  Generally,  all other
international  revenues from the sale of planting seed, less estimated  reserves
for returns, are recognized when the seed is shipped.

All of D&PL's  domestic  seed products  (including  those  containing  Bollgard,
Bollgard II and  Roundup  Ready  technologies)  are subject to return and credit
risk,  the effects of which vary from year to year.  D&PL provides for estimated
returns as sales occur.  All  significant  returns occur or are accounted for by
fiscal year end. The Company  records  monthly  estimates to account for various
sales  incentive  programs  for seed and  Monsanto's  Bollgard,  Bollgard II and
Roundup  Ready  technologies.  The majority of program  rebates occur during the
second,  third and fourth quarters.  Essentially all material claims under these
programs have occurred or are accounted for by fiscal year end.

Research and Development

All research and  development  costs incurred to breed and produce  experimental
seed are expensed.  Costs incurred to produce sufficient  quantities of planting
seed needed for  commercialization  are carried as inventory  until such seed is
sold.  Cotton lint and other  by-products of seed production are also carried as
inventory until sold.

Accounting for Stock-Based Compensation

As permitted by both SFAS No. 123,  "Accounting for  Stock-Based  Compensation,"
and SFAS No. 148,  "Accounting  for  Stock-Based  Compensation  - Transition and
Disclosure -- an Amendment of FASB  Statement No. 123," D&PL applies  Accounting
Principles  Board  Opinion No. 25 in  accounting  for its employee  stock option
plans.  Therefore,  no  compensation  expense  for stock  options is deducted in
determining  net income,  as all options  granted had an exercise price equal to
the fair market value of the underlying common stock on the grant date. See Note
18  for a  description  of the  plans  and  our  disclosure  of the  assumptions
underlying the pro forma calculations below.
<PAGE>

The following table  illustrates the effect on net income and earnings per share
if D&PL had  recorded  compensation  expense in  accordance  with the fair value
provisions of SFAS No. 123.

<TABLE>
<S>                                                           <C>                  <C>                  <C>
                                                              2005                 2004                 2003
                                                        ------------------   -----------------    -----------------
Net income (in thousands):
  As reported                                           $         42,557     $         5,316      $         27,805
  Add:  Total stock-based compensation expense
        included in reported net income, net of
        related tax effects                                          327                  -                      -
  Less: Total stock-based compensation expense
        determined under the fair value based method
        for all awards, net of related tax effects                (5,442)             (2,979)               (3,600)
                                                        ------------------   -----------------    -----------------
  Pro forma                                             $         37,442     $         2,337      $         24,205
                                                        ==================   =================    =================

Basic earnings per share:
  As reported                                           $           1.11     $          0.13      $           0.72
                                                        ==================   =================    =================
  Pro forma                                             $           0.97     $          0.05      $           0.63
                                                        ==================   =================    =================

Diluted earnings per share:
  As reported                                           $           1.08     $          0.13      $           0.70
                                                        ==================   =================    =================
  Pro forma                                             $           0.95     $          0.06      $           0.62
                                                        ==================   =================    =================
</TABLE>

Derivative Financial Instruments

D&PL uses  various  derivative  financial  instruments  to mitigate  its risk to
variability in cash flows related to soybean  purchases and to  effectively  fix
the cost of a  significant  portion of its soybean raw material  inventory.  The
terms of the hedging  derivatives used by D&PL are negotiated to approximate the
terms of the forecasted  transaction;  therefore,  D&PL expects the  instruments
used in hedging  transactions  to be highly  effective in offsetting  changes in
cash flows of the hedged items. Realized and unrealized hedging gains and losses
are recorded as a component of other  comprehensive  income and are reclassified
into cost of sales in the  period in which the  forecasted  transaction  affects
earnings  (i.e.,  is sold or disposed of) which  generally  occurs during D&PL's
second  and third  fiscal  quarters.  Quantities  hedged  that do not exceed the
forecasted  transactions  are  accounted  for as cash flow  hedges in the manner
discussed above.  However,  to the extent that the quantities  hedged exceed the
forecasted  transactions due to intra-season changes to the sales forecast where
it is probable that the originally forecasted  transaction will no longer occur,
D&PL  accounts  for  gains  and  losses  on  these  derivative   instruments  as
discontinued  cash flow  hedges,  whereby  they are  immediately  recorded  as a
component  of net income.  D&PL does not enter into any  derivative  instruments
that extend beyond the close of the following  fiscal year.  D&PL does not enter
into speculative hedges or purchase or hold any derivative financial instruments
for trading purposes.

Impairment of Long-Lived Assets

D&PL assesses  recoverability  and impairment of identifiable  intangible assets
and other long-lived assets whenever events or changes in circumstances indicate
that the carrying  amount may not be  recoverable.  Recorded  goodwill is tested
annually  during  the fourth  quarter  of each  fiscal  year for  impairment  by
comparing its implied fair value to its carrying  value.  Based on  management's
impairment  tests  during  the  fourth  quarters  of 2005 and  2004,  management
determined that none of the goodwill was impaired.  For other long-lived assets,
D&PL determines if the unamortized  balance can be recovered  through  projected
future  operating  cash flows.  If the sum of the expected  future cash flows is
less than the carrying  amount of the asset,  an impairment  loss is recognized.
Otherwise, an impairment loss is not recognized,  and D&PL continues to amortize
its other long-lived assets based on the remaining estimated useful life.

Use of Estimates

The preparation of D&PL's consolidated  financial statements requires the use of
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities, the reported amounts of revenues and expenses and the disclosure of
contingent  liabilities.  Management  makes its best  estimate  of the  ultimate
outcome  for these  items  based on  historical  trends  and  other  information
available when the financial  statements are prepared.  Changes in estimates are
recognized in accordance  with the accounting  rules for the estimate,  which is
typically in the period when new  information  becomes  available to management.
Areas where the nature of the estimate makes it reasonably  possible that actual
results  could  materially  differ  from  amounts  estimated  include:  damaged,
obsolete and excess  inventory,  income tax  liabilities,  allowances  for sales
returns and  marketing  programs,  allowance  for  doubtful  accounts,  employee
benefit plans and contingent liabilities.
<PAGE>

Recently Issued Financial Accounting Standards

In May 2005, the Financial  Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards  ("SFAS") No. 154,  "Accounting  Changes and
Error  Corrections,  a replacement  of APB Opinion No. 20 and SFAS No. 3". Among
other  changes,  SFAS No. 154  requires  that a voluntary  change in  accounting
principle be applied  retrospectively with all prior period financial statements
presented based on the new accounting  principle,  unless it is impracticable to
do so.  SFAS No. 154  provides  that (1) a change in method of  depreciating  or
amortizing  a  long-lived  nonfinancial  asset be  accounted  for as a change in
estimate  (prospectively) that was effected by a change in accounting principle,
and (2) correction of errors in previously issued financial statements should be
termed a  "restatement."  SFAS No. 154 is effective for  accounting  changes and
correction of errors made in fiscal years beginning after December 15, 2005. The
Company does not expect the adoption of this statement to have a material impact
on D&PL's consolidated financial statements.

In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions".  This  statement's  amendments  are based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  Further, SFAS No. 153 eliminates the narrow exception for
nonmonetary  exchanges  of  similar  productive  assets and  replaces  it with a
broader  exception  for  exchanges  of  nonmonetary  assets  that  do  not  have
commercial  substance.  Provisions  of this  statement  are effective for fiscal
periods  beginning after June 15, 2005. The Company does not expect the adoption
of this  statement to have a material  impact on D&PL's  consolidated  financial
statements.

In November 2004, the FASB issued SFAS No. 151,  "Inventory  Costs, an amendment
of ARB No. 43,  Chapter  4," which  clarifies  the types of costs that should be
expensed rather than capitalized as inventory. This statement also clarifies the
circumstances  under  which  fixed  overhead  costs  associated  with  operating
facilities  involved  in  inventory   processing  should  be  capitalized.   The
provisions of SFAS No. 151 are effective for fiscal years  beginning  after June
15, 2005, and may impact certain  inventory costs D&PL incurs after September 1,
2005.  The Company has not  determined  the impact,  if any, that this statement
will have on D&PL's consolidated financial position or results of operations.

SFAS No. 123(R),  "Share-Based  Payment," issued in December 2004, is a revision
of FASB No.  123,  "Accounting  for  Stock-Based  Compensation"  and  supersedes
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees,"  and its related  implementation  guidance.  The  Statement  focuses
primarily on accounting for  transactions  in which an entity  obtains  employee
services in share-based payment transactions.  SFAS No. 123(R) requires a public
entity to measure the cost of  employee  services  received  in exchange  for an
award of equity  instruments  based on the  grant-date  fair  value of the award
(with limited  exceptions).  That cost will be recognized over the period during
which an employee is required to provide service in exchange for the award. This
statement  is  effective  as of the  beginning  of the first  interim  or annual
reporting  period that begins after June 15, 2005.  This statement will apply to
all awards  granted after the required  effective  date and to awards  modified,
repurchased, or cancelled after that date. SFAS No. 123(R) will be effective for
D&PL in the first quarter of fiscal year 2006.  The Company has not yet made any
decisions about how it will adopt SFAS 123(R). However, the pro forma net income
effect of using the fair value method for the years ended August 31, 2005,  2004
and  2003  is  presented  in Note 1  above.  The pro  forma  compensation  costs
presented in Note 1 above and in our prior filings have been calculated  using a
Black-Scholes  option  pricing  model and may not be  indicative of amounts that
should be expected in future years.  D&PL has not made any decisions about which
option-pricing  model is most appropriate for future awards. The Company has not
determined  the  impact,  if any,  that  this  statement  will  have  on  D&PL's
consolidated financial position or results of operations.
<PAGE>

2.   INVENTORIES

Inventories at August 31, consisted of the following (in thousands):

                                             2005                   2004
                                      -------------------    -------------------

       Finished goods                 $          19,713      $          24,867
       Raw materials                             13,156                 14,333
       Growing crops                                818                  1,432
       Supplies                                   1,101                  1,040
                                      -------------------    -------------------
                                                 34,788                 41,672
       Less reserves                             (8,163)               (11,521)
                                      -------------------    -------------------
                                      $          26,625      $          30,151
                                      ===================    ===================

Finished goods and raw material inventory is valued at the lower of average cost
or market.  Growing crops are recorded at cost.  Elements of cost in inventories
include raw  materials,  direct  production  costs,  manufacturing  overhead and
immaterial  general and  administrative  expenses.  Inventory reserves relate to
estimated  damaged,  obsolete and excess inventory.  The provision  recorded for
damaged, obsolete and excess inventory for the years ended August 31, 2005, 2004
and 2003 was $12,997,000, $12,299,000, and $7,478,000, respectively. See Note 15
for a description of hedging activities.

3.   PROPERTY, PLANT AND EQUIPMENT

Property,  plant and  equipment  at August 31,  consisted of the  following  (in
thousands):

                                              2005                   2004
                                      -------------------    -------------------

       Land and improvements          $            6,263     $            5,981
       Buildings and improvements                 43,018                 42,228
       Machinery and equipment                    63,142                 59,125
       Germplasm                                   7,500                  7,500
       Breeder and foundation seed                 2,000                  2,000
       Construction in progress                    2,564                  2,538
                                      -------------------    -------------------
                                                 124,487                119,372
       Less accumulated depreciation             (64,329)               (57,384)
                                      -------------------    -------------------
                                      $           60,158     $           61,988
                                      ===================    ===================

Depreciation expense was approximately $8,250,000,  $7,980,000 and $7,490,000 in
2005, 2004, and 2003, respectively.

4.    INTANGIBLES

The components of identifiable  intangible assets at August 31, consisted of the
following (in thousands):

<TABLE>
<S>                                                    <C>                                   <C>
                                                       2005                                  2004
                                        ------------------------------------  ------------------------------------
                                             Gross                                 Gross
                                            Carrying          Accumulated         Carrying         Accumulated
                                             Amount           Amortization         Amount          Amortization
                                        -----------------  -----------------  -----------------  -----------------
       Trademarks                       $          3,182   $           (958)  $          3,182   $           (879)
       Commercialization agreements                  400               (121)               400                (93)
       Licenses                                    1,100               (192)             1,100                (83)
       Patents                                     1,640               (116)               772                (97)
       Other                                       2,096             (1,071)             1,986               (817)
                                        -----------------  -----------------  -----------------  -----------------
                                        $          8,418   $         (2,458)  $          7,440   $         (1,969)
                                        =================  =================  =================  =================
</TABLE>

Amortization  expense for identifiable  intangible assets during the years ended
August 31,  2005,  2004,  and 2003 was  approximately  $410,000,  $380,000,  and
$270,000,  respectively.  Identifiable  intangible asset amortization expense is
estimated  to be $500,000 in each of the fiscal years from 2006 through 2007 and
$400,000 in each of the fiscal years from 2008 through 2010.
<PAGE>

During the fourth  quarters  of fiscal  2005 and 2004,  "EXCESS OF COST OVER NET
ASSETS OF BUSINESS ACQUIRED" ("goodwill") was tested for impairment by comparing
its implied fair value to its carrying value.  Based on management's  impairment
test, management determined that none of the goodwill was impaired.

5. INVESTMENT IN AFFILIATE

D&PL owns a 50% interest in DeltaMax Cotton,  LLC, a limited  liability  company
jointly owned with Verdia,  Inc.  Verdia was acquired by DuPont on July 2, 2004.
Established  in May 2002,  the  DeltaMax  joint  venture  was  formed to create,
develop and commercialize herbicide tolerant and insect resistant traits for the
cottonseed  market.  D&PL has licensed from  DeltaMax the  developed  traits for
commercialization in both the U.S. and other  cotton-producing  countries in the
world. For the years ended August 31, 2005, 2004 and 2003,  D&PL's equity in the
net loss of DeltaMax was $2,787,000, $3,551,000, and $1,977,000, respectively.

6. LONG-TERM DEBT

The amounts reported in the Consolidated  Balance Sheets as "Current  Maturities
of Long-Term Debt" and "Long-Term  Debt" at August 31, 2005 primarily  relate to
payments to be made to Syngenta Crop Protection AG  ("Syngenta")  related to the
acquisition  of  certain  licenses.  See  Note 16 for  more  information  on the
transaction.

7. ACCRUED EXPENSES

Accrued expenses at August 31, consisted of the following (in thousands):

                                               2005                   2004
                                          ----------------     -----------------
    Bollgard, Bollgard II and Roundup
      Ready royalties and related
      expenses due to Monsanto            $       179,412      $        149,984
    Sales allowances                               15,106                12,281
    Dividends                                       5,419                 4,619
    Other accrued expenses                         21,887                21,006
                                          ----------------     -----------------
                                          $       221,824      $        187,890
                                          ================     =================

8.   INCOME TAXES

The provisions for income taxes for the years ended August 31,  consisted of the
following (in thousands):

                               2005                 2004                2003
                        -----------------   -----------------   ----------------
         Current-
           Federal      $         18,606    $         12,078    $        10,891
           State                   1,997               1,226              1,216
         Deferred-
           Federal                 1,813             (10,232)             2,347
           State                     230              (1,678)               289
                        -----------------   -----------------   ----------------
                        $         22,646    $          1,394    $        14,743
                        =================   =================   ================

The differences  between the statutory federal income tax rate and the effective
tax rate are as follows:

<TABLE>
<S>                                                                         <C>                 <C>                  <C>
                                                                            2005                2004                 2003
                                                                      -----------------   ------------------   ------------------
        Statutory rate                                                      35.0%               35.0%                35.0%
        Increases (decreases) in tax resulting from:
           State taxes, net of federal tax benefit                           2.2                (4.4)                 2.3
           Research and development tax credits                             (1.1)               (9.3)                (1.2)
           Foreign activities                                               (1.0)               (3.1)                (1.6)
           Other                                                            (0.4)                2.6                  0.2
                                                                      -----------------   ------------------   ------------------
        Effective tax rate                                                  34.7%               20.8%                34.7%
                                                                      =================   ==================   ==================
</TABLE>

The effective tax rate was reduced in 2004 primarily due to the impact of the
IPR&D charge (see Note 16). State taxes resulted in a net benefit in 2004 due to
state income tax credits and the recognition of certain state net operating
losses that had not previously been benefited.
<PAGE>

Deferred income taxes at August 31, consisted of the following (in thousands):

                                              2005                   2004
                                      -------------------    -------------------
 Deferred tax assets:
   Inventory                          $          2,954       $           4,048
   Litigation costs                                453                   1,129
   Pension                                       1,984                     955
   Capitalized licenses (Syngenta)              13,839                  14,541
   Other                                         1,932                   3,327
                                      -------------------    -------------------
                                      $         21,162       $          24,000
                                      ===================    ===================
 Deferred tax liabilities:
   Property and intangibles           $         (4,046)      $          (3,615)
   Other                                           (53)                 (3,018)
                                      -------------------    -------------------
                                                (4,099)                 (6,633)
                                      -------------------    -------------------
   Net deferred income taxes          $         17,063       $          17,367
                                      ===================    ===================

The Company has not provided for income taxes on the  undistributed  earnings of
certain foreign  subsidiaries  where the earnings are expected to be permanently
reinvested outside the United States.  However,  if taxes were provided on these
earnings,  such  taxes  are  not  expected  to  be  material  to  the  Company's
consolidated financial statements.

The American Jobs Creation Act of 2004 provides a one-time opportunity for U.S.
corporations to elect to deduct 85% of certain cash dividends from controlled
foreign corporations, provided certain qualifications are met as to the amounts
of the dividends and the use of the repatriated funds. The Company has not yet
completed its evaluation of these provisions, but will do so by the end of
calendar year 2005.

9.   LEASES

D&PL leases a portion of the real estate and machinery and equipment used in its
operations under operating lease arrangements. Substantially all rent expense is
recorded as cost of sales. D&PL does not have any capital leases. Future minimum
rental payments after 2005 under operating leases with initial or remaining
non-cancelable terms in excess of one year are as follows:

                                  2006     $ 511,000
                                  2007     $ 467,000
                                  2008     $  83,000
                                  2009     $  79,000
                                  2010     $  34,000

Rent and lease expense approximated  $3,059,000,  $2,558,000,  and $2,767,000 in
2005, 2004 and 2003, respectively.

10. Credit Facility

On April 15, 2005,  Delta and Pine Land Company and certain of its  subsidiaries
entered into an unsecured $75 million credit agreement (the "Credit  Agreement")
with Bank of America,  N.A.  (the  "Bank").  The Credit  Agreement  provides for
unsecured  revolving loans up to a maximum  aggregate amount  outstanding of $75
million, plus Letters of Credit which were outstanding prior to the execution of
the Credit  Agreement in the amount of  approximately  $2 million.  Of the total
commitment,  $50 million represents a seasonal commitment available from October
to July of each year.  The Credit  Agreement  expires on July 31, 2006, at which
time  all  outstanding  amounts  under  the  Credit  Agreement  would be due and
payable,  subject to the Company's right to request a one-year extension and the
Bank's acceptance of that request. On October 10, 2005, the Company requested an
extension of the Credit Agreement and negotiations regarding this extension are
underway.

In general,  borrowings  under the Credit Agreement will bear interest at a rate
calculated  according to a Eurodollar  rate, plus 0.55%.  The Eurodollar rate is
generally  the 30-day,  60-day or 90-day  LIBOR rate.  The Company  will also be
required  to pay an  annual  fee of 0.125% of the  daily-unused  portion  of the
Credit Agreement.  The primary financial  covenant requires the Company's funded
indebtedness under the Credit Agreement to not exceed 50% of certain current and
long-term assets,  defined in the Credit Agreement and determined as of the last
day of each fiscal quarter.

As of  August  31,  2005,  there  were no loans  outstanding  under  the  Credit
Agreement, other than the existing Letters of Credit discussed above.
<PAGE>

11.  EMPLOYEE BENEFIT PLANS

Defined Benefit Plan

Substantially all full-time  employees are covered by a noncontributory  defined
benefit  plan  (the  "Plan").   Benefits  are  paid  to   employees,   or  their
beneficiaries, upon retirement, death or disability based on their final average
compensation over the highest  consecutive five years.  D&PL's funding policy is
to make contributions to the Plan that are at least equal to the minimum amounts
required to be funded in accordance  with the provisions of ERISA.  D&PL expects
to contribute $2 million to the Plan in 2006.

Effective  January 1992, D&PL adopted a Supplemental  Executive  Retirement Plan
(the "SERP"),  which will pay supplemental pension benefits to certain employees
whose benefits from the Plan were decreased as a result of certain  changes made
to the Plan. The benefits from the SERP will be paid in addition to any benefits
the  participants  may  receive  under  the Plan and will be paid  from  Company
assets, not Plan assets. D&PL does not expect to contribute to the SERP in 2006.

The measurement of Plan and SERP assets and obligations was performed as of June
30. The following table provides a  reconciliation  of the changes in the Plan's
and SERP's benefit obligations and fair value of assets over the two-year period
ended  August 31, 2005,  and a statement  of the funded  status as of August 31,
2005 and 2004.

<TABLE>
<S>                                                             <C>    <C>                               <C>    <C>
                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2005                 2004                2005                 2004
                                                -----------------    -----------------   ------------------   ------------------
CHANGE IN BENEFIT OBLIGATIONS
Benefit obligation at beginning of year         $     17,866,000     $     16,848,000    $        607,000     $        616,000
     Service cost                                        853,000              832,000                  -                 9,000
     Interest cost                                     1,094,000              989,000              36,000               35,000
     Actuarial loss (gain)                             3,142,000             (121,000)             39,000               (4,000)
     Benefits paid                                      (691,000)            (682,000)            (49,000)             (49,000)
                                                -----------------    -----------------   ------------------   ------------------
Benefit obligation at end of year               $     22,264,000     $     17,866,000    $        633,000     $        607,000
                                                =================    =================   ==================   ==================

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year  $     13,215,000     $     10,188,000    $        339,000     $        362,000
     Actual return on plan assets                        356,000            1,101,000              10,000               27,000
     Company contributions                             1,500,000            2,700,000                   -                    -
     Benefits paid                                      (691,000)            (682,000)            (49,000)             (49,000)
     Expenses                                            (87,000)             (92,000)             (1,000)              (1,000)
                                                -----------------    -----------------   ------------------   ------------------
Fair value of plan assets at end of year        $     14,293,000     $     13,215,000    $        299,000     $        339,000
                                                =================    =================   ==================   ==================

Funded status                                   $     (7,971,000)          (4,651,000)           (334,000)            (268,000)
Unrecognized prior service cost                           15,000               36,000                   -                    -
Unrecognized net loss                                  9,354,000            5,781,000              56,000                    -
                                                -----------------    -----------------   ------------------   ------------------
Prepaid (accrued) pension cost                  $      1,398,000     $      1,166,000    $       (278,000)    $       (268,000)
                                                =================    =================   ==================   ==================

                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2005                 2004                2005                 2004
                                                -----------------    -----------------   ------------------   ------------------
AMOUNTS REFLECTED IN THE BALANCE SHEET AT
AUGUST 31:
     Prepaid (accrued) benefit cost             $      1,398,000     $      1,166,000    $       (278,000)    $      (268,000)
     Minimum pension liability                        (7,104,000)          (3,809,000)            (56,000)                  -
     Accumulated other comprehensive loss              7,089,000            3,773,000              56,000                   -
     Intangible asset                                     15,000               36,000                   -                   -
                                                -----------------    -----------------   ------------------   ------------------
                                                $      1,398,000     $      1,166,000    $       (278,000)    $      (268,000)
                                                =================    =================   ==================   ==================
</TABLE>
<PAGE>

The accumulated benefit obligation for the Plan was $19,999,000 and $15,858,000
as of August 31, 2005 and 2004, respectively. The accumulated benefit obligation
for the SERP was $633,000 and $607,000 as of August 31, 2005 and 2004,
respectively.

Periodic Pension Expense:
<TABLE>
<S>                                     <C>    <C>                  <C>    <C>                  <C>    <C>
                                                  Plan                                       SERP
                                 ----------------------------------------- -----------------------------------------
                                    2005          2004           2003         2005           2004          2003
                                 ------------  ------------  ------------- ------------  -------------  ------------
Service cost                     $   853,000   $   832,000   $    638,000  $         -    $    9,000    $      8,000
Interest cost on projected
 benefit obligation                1,094,000       989,000        915,000       36,000        35,000          38,000
Expected return on assets         (1,088,000)     (921,000)      (687,000)     (26,000)      (28,000)        (32,000)
Recognized loss (gain)               406,000       472,000        263,000       (2,000)       50,000         186,000
Amortization of prior
  service cost                         3,000         3,000          3,000            -             -               -
                                 ------------  ------------  ------------- ------------  -------------  ------------
Net periodic pension
  expense                        $ 1,268,000   $ 1,375,000   $  1,132,000   $    8,000   $    66,000    $    200,000
                                 ============  ============  ============= ============  =============  ============
Company contributions            $ 1,500,000   $ 2,700,000   $  1,500,000   $        -   $         -    $          -
                                 ============  ============  ============= ============  =============  ============
</TABLE>


<TABLE>
<S>                                                          <C>            <C>                <C>                  <C>
                                                                 Plan                                      SERP
                                                 --------------------------------------   ---------------------------------------
                                                       2005                2004                 2005                 2004
                                                 -----------------   ------------------   ------------------   ------------------
Weighted-average assumptions used to determine
benefit obligations at August 31:
     Discount rate                                        5.25%               6.25%                5.25%                6.25%
     Rate of compensation increases                       3.50%               4.00%                3.50%                4.00%

Weighted-average assumptions used to determine
net periodic benefit cost for years ended
August 31:
     Discount rate                                        6.25%               6.00%                6.25%                6.00%
     Expected long-term return on plan assets             8.50%               8.50%                8.50%                8.50%
     Rate of compensation increase                        4.00%               4.00%                4.00%                4.00%
</TABLE>

The  expected  long-term  rate of return  assumptions  for each asset  class are
selected  based on historical  relationships  between the assets classes and the
economic and capital market environments updated for current conditions.

D&PL's Plan and SERP asset  allocations as of the measurement  dates of June 30,
2005 and 2004 are as follows:

<TABLE>
<S>                                                     <C>                     <C>                     <C>             <C>
                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2005                 2004                2005                 2004
                                                -----------------    -----------------   ------------------   ------------------
Asset Category
     Common stocks                                            70%                  70%                 73%                  72%
     Preferred stocks                                         15%                  18%                 26%                  27%
     Temporary investments                                    15%                  12%                  1%                   1%
                                                -----------------    -----------------   ------------------   ------------------
     Total                                                   100%                 100%                100%                 100%
                                                =================    =================   ==================   ==================
</TABLE>

The Plan and SERP plan assets are managed by an independent portfolio manager as
balanced  accounts with assets  invested in fixed income  securities  (including
preferred stocks, corporate bonds and debentures) and equities (including common
stocks).  The target range for asset  allocation  is 20% to 40% for fixed income
securities and 60% to 80% for equities.

A primary  risk  control is the  limiting of any one equity  position to no more
than 8% of the value of the equity portion of the portfolio.  No derivatives are
used in  portfolio  construction.  No Plan or SERP assets were  invested in D&PL
common stock at June 30, 2005 or 2004.
<PAGE>

At August 31,  2005,  total  future  Plan and SERP  benefits  are  estimated  as
follows:

                                           Plan                 SERP
                                    -----------------    -----------------

     2006                           $        769,000     $         63,000
     2007                                    782,000               63,000
     2008                                    827,000               63,000
     2009                                    892,000               63,000
     2010                                    972,000               63,000
     Years 2011-2015                       5,388,000              314,000

Defined Contribution Plan

D&PL sponsors a defined  contribution  plan under Section 401(k) of the Internal
Revenue Code which covers  substantially all full-time  employees of D&PL. D&PL,
at its option, may elect to make matching contributions to the Plan. No matching
contributions were made in 2005, 2004 or 2003.

12. MAJOR CUSTOMERS

In fiscal 2005,  2004 and 2003,  seed sales to each of three  customers  and the
related  licensing  fees  ultimately  billed to farmers  for sales made by these
customers for  transgenic  products  comprised  more than 10% of total sales and
licensing fees. The table below presents the approximate  amount of annual sales
and  licensing  fees to each of the  customers.  These  amounts were reported in
D&PL's domestic segment.

     Customer            2005                  2004                  2003
 ---------------  ------------------   -------------------   -------------------
      A                $41,245,000           $38,820,000           $32,275,000
      B                 77,865,000            66,156,000            57,580,000
      C                 69,306,000            55,388,000            55,438,000

13. BUSINESS SEGMENT INFORMATION

D&PL is in a single line of business  and  operates  in two  business  segments,
domestic and international.  D&PL's reportable  segments offer similar products;
however,  the  business  units  are  managed  separately  due to the  geographic
dispersion of their operations.  D&PL breeds, produces,  conditions, and markets
proprietary  varieties of cotton and soybean planting seed in the United States.
The international segment offers cottonseed in several foreign countries through
both export sales and in-country operations.  D&PL develops its proprietary seed
products  through  research  and  development  efforts in the United  States and
certain foreign countries.

D&PL's chief operating decision maker utilizes revenue  information in assessing
performance  and making overall  operating  decisions and resource  allocations.
Profit and loss  information  is  reported  by  segment  to the chief  operating
decision  maker and D&PL's Board of Directors.  The  accounting  policies of the
segments  are  substantially  the  same as those  described  in the  summary  of
significant accounting policies.
<PAGE>

Information about D&PL's segments for the years ended August 31, is as follows
(in thousands):

<TABLE>
<S>                                          <C>                   <C>                   <C>
                                             2005                  2004                  2003
                                        ---------------       ---------------       ---------------
Net sales and licensing fees
     Domestic                           $     325,621         $      276,410        $      255,133
     International                             40,464                 36,355                28,666
                                        ---------------       ---------------       ---------------
                                        $     366,085         $      312,765        $      283,799
                                        ===============       ===============       ===============

Net sales and licensing fees
     Cottonseed                         $     342,918         $      282,233        $      257,158
     Soybean seed                              21,051                 26,951                21,670
     Other                                      2,116                  3,581                 4,971
                                        ---------------       ---------------       ---------------
                                        $     366,085         $      312,765        $      283,799
                                        ===============       ===============       ===============

Operating income
     Domestic                           $      64,786         $       17,199        $       55,170
     International                              6,929                  4,361                 1,537
                                        ---------------       ---------------       ---------------
                                        $      71,715         $       21,560        $       56,707
                                        ===============       ===============       ===============

Capital expenditures
     Domestic                           $       4,200         $        4,240        $        5,613
     International                              2,469                  1,809                 2,685
                                        ---------------       ---------------       ---------------
                                        $       6,669         $        6,049        $        8,298
                                        ===============       ===============       ===============

Depreciation and amortization
     Domestic                           $       6,836         $        6,762        $        6,559
     International                              1,825                  1,602                 1,200
                                        ---------------       ---------------       ---------------
                                        $       8,661         $        8,364        $        7,759
                                        ===============       ===============       ===============
</TABLE>

Information about the financial position of D&PL's segments as of August 31, is
as follows (in thousands):

                                             2005                  2004
                                        ---------------       ---------------
Long-term assets
    Domestic                            $      65,898          $     65,210
    International                              16,607                16,338
                                        ---------------       ---------------
                                        $      82,505          $     81,548
                                        ===============       ===============

Total assets
    Domestic                            $     408,784          $    428,444
    International                              30,400                28,579
                                        ---------------       ---------------
                                        $     439,184          $    457,023
                                        ===============       ===============

14.  RELATED PARTY TRANSACTIONS

The  chairman of the Board of  Directors of D&PL is also a director for Stephens
Group,  Inc. In October 2003, he retired as an officer of Stephens  Group,  Inc.
and as a director and officer for  Stephens,  Inc.,  a full  service  investment
bank;  however,  he remains a  consultant  and an employee  of these  companies.
Stephens Group,  Inc. and Stephens,  Inc. are stockholders of D&PL. During 2004,
D&PL paid consulting fees to Stephens,  Inc. of  approximately  $313,000 for the
evaluation of certain technology transactions.

During  2005,  2004 and 2003, a partner of a law firm that  represents  D&PL was
also a stockholder and D&PL's corporate secretary.  D&PL paid legal fees to this
firm of approximately  $962,000,  $929,000, and $633,000 in 2005, 2004 and 2003,
respectively.

During 2005,  2004 and 2003,  DeltaMax  paid  Temasek  Life  Science  Laboratory
("TLL") approximately  $1,465,000,  $1,118,000 and $811,000,  respectively,  for
research  activities  TLL  conducted  for  DeltaMax.  TLL is a related  party of
Temasek  Capital  and  Temasek  Holdings.  Dr.  Chua,  a member  of the Board of
Directors  of D&PL,  was the Chief  Scientific  Advisor of Temasek  Capital from
April 2001 to March 2003 and was  appointed to be  Corporate  Advisor to Temasek
Holdings in April 2003 through March 2006, and has advised TLL since April 2004.
Dr. Chua has been a paid  consultant to Pioneer Hi-Bred  International,  Inc., a
DuPont  subsidiary,  for several years and continues in this  capacity.  In July
2004, DuPont acquired Verdia, Inc., which owns 50% of DeltaMax (see Note 5).
<PAGE>

15. DERIVATIVE FINANCIAL INSTRUMENTS

Accumulated  other  comprehensive  loss  includes the  following  related to the
Company's  soybean  hedging program for the years ended August 31, 2005 and 2004
(in thousands):

                                                    2005                2004
                                                --------------    --------------

 Deferred net (loss) gain, beginning of year    $      (134)      $        262

   Net (losses) gains on hedging instruments
       arising during the year                         (116)                60
   Reclassification adjustment of losses(gains)
       on hedging instruments to earnings               474               (456)
                                                --------------    --------------
 Net change in accumulated other comprehensive
       loss                                             358               (396)
                                                --------------    --------------
 Deferred net gain (loss), end of year          $       224       $       (134)
                                                ==============    ==============

The deferred net gain of $224,000  included in accumulated  other  comprehensive
loss at August 31,  2005,  consists of net  realized  gains of $234,000  and net
unrealized  losses of $10,000,  which will be recognized in earnings  within the
next twelve months;  however, the actual amount that will be charged to earnings
may vary as a result of changes in market conditions.

For the years ended August 31, 2005 and August 31, 2004,  D&PL recorded no gains
or losses in earnings as a result of hedge  ineffectiveness or discontinuance of
cash flow hedges.

16. IN-PROCESS RESEARCH AND DEVELOPMENT

In August 2004,  D&PL entered into an  acquisition  agreement  with  Syngenta to
purchase  global  licenses  to  develop  and  commercialize   Syngenta's  insect
resistance technology in cottonseed.  In addition,  D&PL purchased licenses to a
wide  range of other  Syngenta  enabling  technologies  that  may be  useful  in
developing  new products for use in  cottonseed  and soybean seed. In return for
the  licenses,   D&PL  is  to  pay  Syngenta   approximately  $46.8  million  in
installments  due  primarily  through  the  first  quarter  of 2008.  Under  the
acquisition  agreement,  D&PL paid Syngenta $14.1 million at closing in 2004 and
paid Syngenta $5.8 million during 2005. D&PL is further  required to make future
payments of $10.15  million in 2006,  $5.95 million in 2007, and $1.6 million in
2008. Of the $46.8 million purchase price,  contingent  payments of $1.6 million
in 2008,  $3.1 million in 2009,  $3.0 million in 2010,  and $1.5 million in 2011
may also have to be made under the agreements.

At the  purchase  date,  an amount  equal to the present  value of the  payments
required to be made was capitalized as an intangible  asset of $36,225,000,  and
then immediately  expensed in the 2004 Consolidated  Statement of Income, as the
technologies  to which D&PL  purchased  licenses  were  in-process  research and
development (IPR&D) projects that had not yet reached technological  feasibility
and had no alternative  future use.  Payments to be made after the first quarter
of 2008 are contingent on certain events  occurring,  and thus were not included
in the amount  capitalized  and then written off as IPR&D.  Related  transaction
costs of approximately  $2,307,000  primarily  related to professional  fees are
also included in the caption  "In-process  research and  development and related
transaction costs" in the Consolidated Statement of Income.

The present  value of the amounts to be paid  through the first  quarter of 2008
was computed based on discount rates that approximated borrowing rates that D&PL
would incur on borrowings with similar maturities as the payments required to be
made.  Accordingly,  the discount rate used for the payments to be made one, two
and three and one-half years after the purchase date was 3.28%, 3.84% and 4.25%,
respectively.  The  amount due to  Syngenta  within  the next  twelve  months is
reported in the Consolidated  Balance Sheet as "Current  Maturities of Long-Term
Debt" under  Current  Liabilities.  The balance of the  remaining  payments  due
through the first quarter of 2008 is reported as "Long-Term Debt."
<PAGE>

17.   COMMITMENTS AND CONTINGENCIES

Product Liability Claims

D&PL is named as a  defendant  in various  lawsuits  that  allege,  among  other
                                                                               1
things, that certain of D&PL's products (including those containing  Monsanto's
technology) did not perform as the farmer had  anticipated or expected.  In some
of these cases,  Monsanto and/or the dealer or distributor who sold the seed are
also named as defendants.  In all cases where the seed sold contained  either or
both of Monsanto's  Bollgard and/or Roundup Ready gene  technologies,  and where
the  farmer  alleged a failure  of one or more of those  technologies,  D&PL has
tendered the defense of the case to Monsanto and requested  indemnity.  Pursuant
to the terms of the February 2, 1996  Bollgard  Gene  License and Seed  Services
Agreement (the "Bollgard Agreement") and the February 2, 1996 Roundup Ready Gene
License and Seed Services  Agreement  (the "Roundup Ready  Agreement")  (both as
amended  December  1999,  January  2000 and  March  2003 and the  Roundup  Ready
Agreement  as  additionally   amended  July  1996),  D&PL  has  a  right  to  be
contractually  indemnified  by Monsanto  against  all claims  arising out of the
failure of Monsanto's gene technology.  Pharmacia  remains liable for Monsanto's
performance  under these  indemnity  agreements.  Some of the product  liability
lawsuits  contain  varietal claims which are aimed solely at D&PL. D&PL does not
have a right to indemnification  from Monsanto for any claims involving varietal
characteristics  separate  from or in addition  to the  failure of the  Monsanto
technology.  D&PL believes that the  resolution of these matters will not have a
material  impact on the  consolidated  financial  statements.  D&PL  intends  to
vigorously defend itself in these matters.

Other Legal Matters

On  December  9,  2003,  Bayer  BioScience  N.V.  and  Bayer   CropScience  GmbH
(collectively  "Bayer") filed a suit in the Federal Court of Australia  alleging
that the  importing,  exporting,  selling and other  alleged  uses by  Deltapine
Australia  Pty  Ltd.,  D&PL's  wholly-owned  Australian  subsidiary  ("Deltapine
Australia"),  of Bollgard II(R) cottonseed  infringes Bayer's  Australian patent
that  claims  an  alleged  invention  entitled   "Prevention  of  Bt  Resistance
Development."  The suit seeks an  injunction,  damages and other relief  against
Deltapine Australia. Deltapine Australia disputes the validity, infringement and
enforceability  of  Bayer's  patent.  On April  16,  2004,  Deltapine  Australia
responded to the suit, denying  infringement and asserting  affirmative defenses
and cross claims. The suit is in pretrial proceedings. Due to the status of this
matter,  management  is unable to  determine  the  impact of this  matter on the
consolidated financial statements.

In July 2003, D&PL received a notice from Monsanto asserting that disputes exist
among Monsanto,  D&PL and D&M Partners, a partnership of D&PL (90%) and Monsanto
(10%),  pertaining to matters under the Bollgard and Roundup Ready  Licenses for
the United  States and matters under  license  agreements  for Argentina and the
Republic of South  Africa.  In August 2003,  D&PL and D&M Partners  responded to
Monsanto's positions on each issue and notified Monsanto of additional disputes,
each concerning  Monsanto's  compliance with its obligations  under the Bollgard
and Roundup Ready Licenses for the United States. In accordance with the dispute
resolution provisions of the subject agreements,  the issues raised in Monsanto,
D&PL and D&M Partners'  notices were  submitted to a panel of senior  executives
(the "Executive Panel"). Monsanto subsequently withdrew from the Executive Panel
the issue involving the license  agreements for the Republic of South Africa and
submitted to the Executive Panel one additional issue of  interpretation  of the
Bollgard and Roundup Ready Licenses for the United  States.  Issues arising from
operations in Argentina and issues  involving  technology fees and interest have
been settled and are no longer in dispute.  On May 20, 2004,  Monsanto submitted
to  arbitration  before the  American  Arbitration  Association  two  unresolved
issues:  whether D&M Partners has paid  Monsanto all  royalties  due and whether
D&PL  has  made  unauthorized   transfers  of  materials   containing   Monsanto
technology.  In this arbitration  proceeding,  Monsanto seeks an adjudication of
its alleged  right to  terminate  the Bollgard and Roundup  Ready  Licenses,  to
dissolve D&M Partners,  to obtain an accounting and to receive  monetary damages
and a return or destruction of materials containing Monsanto technologies.  D&PL
denies the claims asserted by Monsanto in the  arbitration  filing and has filed
appropriate  responses to Monsanto's claims and filed three  counterclaims based
on the  issues  submitted  by D&PL  to the  Executive  Panel.  The  parties  are
------------------------

1. On March 31, 2000, Monsanto Company consummated a merger with Pharmacia &
Upjohn Inc. and changed its name to Pharmacia Corporation. On February 9, 2000,
Monsanto Company formed a new subsidiary corporation, Monsanto Ag Company,
which, on March 31, 2000, changed its name to Monsanto Company. On August 31,
2002, Pharmacia distributed to its shareholders its remaining interest in the
new Monsanto Company. Pursuant to the closing of a merger on April 16, 2003,
Pharmacia Corporation merged with and into a wholly-owned subsidiary of Pfizer
Inc. Pharmacia survived the merger as a wholly-owned subsidiary of Pfizer Inc.

In this document, with respect to events occurring on or before March 31, 2000,
the term "Monsanto" refers to the entity then designated Monsanto Company and
renamed Pharmacia Corporation on that date. With respect to events occurring
between March 31, 2000 and April 16, 2003, this entity is referred to as
"Pharmacia". With respect to events occurring after April 16, 2003, the entity
referred to as "Pharmacia" is that entity which on that date became a
wholly-owned subsidiary of Pfizer Inc. With respect to events occurring after
March 31, 2000, the entity formed as Monsanto Ag Company and renamed Monsanto
Company (NYSE: MON) on March 31, 2000, is referred to as "Monsanto".

currently  conducting  discovery.  The Arbitration  Panel has set an August 2006
final  hearing  date.  On November  8, 2004,  Monsanto  submitted  one new claim
allegedly  involving a dispute  under the license  agreements  to the  Executive
Panel.  This issue has been resolved by the Executive  Panel. On March 31, 2005,
D&PL submitted an issue involving an international license under the 1996 Option
Agreement  between  Monsanto and D&PL for resolution by the Executive Panel. The
Executive  Panel  has that  claim  under  consideration.  D&PL is  committed  to
participating  in  good  faith  resolution  of the  issues  in  dispute  through
arbitration, or through the Executive Panel, as applicable. Due to the status of
this matter,  management is unable to determine the impact of this matter on the
consolidated financial statements.

In December 1999,  Mycogen Plant Science,  Inc.  ("Mycogen") filed a suit in the
Federal Court of Australia  alleging that Monsanto  Australia  Ltd.,  Monsanto's
wholly-owned Australian subsidiary, and Deltapine Australia have been infringing
two of Mycogen's  Australian  patents by making,  selling,  and licensing cotton
planting seed expressing insect  resistance.  The suit seeks injunction  against
continued sale of seed containing  Monsanto's  Ingard(R) gene and recovery of an
unspecified amount of damages.  Trial of this matter commenced on March 7, 2005,
and  concluded  on April 6, 2005.  D&PL is  awaiting a decision  from the Court.
Consistent with its commitments, Monsanto has agreed to defend D&PL in this suit
and to indemnify D&PL against damages, if any are awarded. Monsanto is providing
separate  defense  counsel for D&PL.  D&PL is  assisting  Monsanto to the extent
reasonably necessary. Due to the status of this matter,  management is unable to
determine the impact of this matter on the consolidated financial statements.

A corporation owned by the son of D&PL's former Guatemalan distributor sued D&PL
in 1989 asserting that D&PL violated an agreement with it by granting to another
entity an  exclusive  license in certain  areas of Central  America and southern
Mexico. The suit seeks damages of 5,292,459 Guatemalan quetzales  (approximately
$696,329 at October 31, 2005 exchange  rates) and an injunction  preventing D&PL
from distributing seed through any other licensee in that region. The Guatemalan
court,  where this  action is  proceeding,  has twice  declined  to approve  the
injunction  sought.  D&PL  continues to make  available seed for sale in Central
America and Mexico.  D&PL believes  that the  resolution of this matter will not
have a material impact on the consolidated financial statements.

D&PL vs. Monsanto Company and Pharmacia Corporation

On December  20,  1999,  Monsanto  withdrew its  pre-merger  notification  filed
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR Act")
effectively  terminating  Monsanto's efforts to gain government  approval of the
merger of Monsanto with D&PL under the May 8, 1998 Merger Agreement. On December
30,  1999,  D&PL filed suit in the First  Judicial  District of Bolivar  County,
Mississippi,  seeking,  among  other  things,  the  payment  of the $81  million
termination fee due pursuant to the Merger Agreement,  compensatory  damages and
punitive  damages.  On January 2, 2000,  D&PL and Monsanto  reached an agreement
whereby D&PL would  withdraw  the suit,  without  prejudice,  for the purpose of
negotiating a settlement of D&PL's claims,  and Monsanto would  immediately  pay
the $81 million.  On January 3, 2000,  Monsanto paid to D&PL the termination fee
of $81 million as required by the Merger  Agreement.  On January 18, 2000, after
unsuccessful  negotiations,  D&PL re-filed its suit.  D&PL seeks in excess of $1
billion in  compensatory  and $1 billion in  punitive  damages for breach of the
Merger Agreement between the parties.

On September 12, 2003, Monsanto amended its answer to include four counterclaims
against D&PL.  Monsanto is seeking  unspecified  damages for its  counterclaims,
including  the $81 million  paid by Monsanto  to D&PL as a  termination  fee and
related expenses.  D&PL answered the counterclaims,  denying all liability,  and
D&PL  intends to  vigorously  defend  itself  against  these  counterclaims.  On
December 21, 2004,  Monsanto  filed a motion to amend its answer to withdraw two
of its four  counterclaims.  On February 17, 2005,  D&PL filed a motion with the
trial  court  to  amend  its  complaint  to add a  claim  against  Monsanto  for
fraudulently  inducing  D&PL to extend the  deadline to complete the merger with
Monsanto.  The Mississippi Supreme Court has stayed the proceedings in this case
pending the  resolution of two  interlocutory  appeals filed by D&PL. Due to the
status of this  matter,  management  is unable to  determine  the impact of this
matter on the consolidated financial statements.
<PAGE>

18.   STOCKHOLDERS' EQUITY

Preferred Stock

The Board of Directors  of D&PL is  authorized,  subject to certain  limitations
prescribed  by law,  without  further  stockholder  approval,  to issue up to an
aggregate of 2,000,000 shares of Preferred Stock, in one or more series,  and to
determine or alter the designations, preferences, rights and any qualifications,
limitations or restrictions on the shares of each such series thereof, including
dividend rights,  dividend rates,  conversion  rights,  voting rights,  terms of
redemption  (including  sinking fund  provisions),  redemption  price or prices,
liquidation  preferences  and the  number of shares  constituting  any series or
designations of such series.

In  August  1996,  the Board of  Directors  adopted a  Stockholder  Rights  Plan
("Rights  Plan") and declared a dividend of one preferred  stock  purchase right
("right") for each outstanding share of D&PL's Common Stock. Similar rights have
been,  and  generally  will be,  issued in respect of Common Stock  subsequently
issued. Each right becomes  exercisable,  upon the occurrence of certain events,
for one  one-hundredth  of a share of  Series A Junior  Participating  Preferred
Stock,  $0.10 par value, at a purchase price of $175 per one  one-hundredth of a
Preferred Share, subject to adjustment.  In the event that D&PL is acquired in a
merger or other business  combination  transaction  not approved by the Board of
Directors, each holder of a right shall have the right to receive that number of
shares of common stock of the surviving  company which would have a market value
of two times the exercise  price of the right.  Under the Rights  Plan,  456,989
shares of Series A Junior Participating  Preferred Stock have been reserved. The
rights currently are not exercisable and will be exercisable only if a person or
group acquires beneficial  ownership of 15% or more of D&PL's outstanding shares
of Common Stock. The rights,  which expire on August 30, 2006, are redeemable in
whole,  but not in part,  at D&PL's  option at any time for a price of $0.01 per
right.

D&PL  issued  1,066,667  shares  (after  effect  of stock  splits)  of  Series M
Convertible  Non-Voting  Preferred Stock, as  consideration  for the purchase in
1996 of Hartz  Cotton,  Inc.  from  Monsanto.  The holders of Series M Preferred
Stock are  entitled to receive  dividends  at the same rate per share as is paid
from time to time on each share of the Common Stock of D&PL,  and no more,  when
and as  declared  by the Board of  Directors.  In the event of any  liquidation,
dissolution or winding up of D&PL, either voluntary or involuntary,  the holders
of Series M  Preferred  Stock  shall be  entitled  to  receive,  prior to and in
preference to any  distribution to holders of Common Stock or any other class of
security of D&PL,  $13.936 per share of Series M Preferred  Stock.  The Series M
Preferred Stock became convertible on February 2, 2003, the seventh  anniversary
of the date on which the Series M Preferred Stock was issued.

Long Term Incentive Plans

The 1993 Stock Option Plan  authorized the issuance of options to purchase up to
2,560,000 shares (after effect of all stock splits) of Common Stock at an option
price not less than the market price on the date of grant.

The 1995 Long-Term  Incentive  Plan, as amended and restated in March 2000, (the
"LTIP") allows for the awarding of stock options to officers,  key employees and
directors.  The amended and  restated  1995 plan  eliminates  the ability of the
Board of  Directors to award stock  appreciation  rights,  restricted  shares of
common stock and performance unit credits.  Under the LTIP,  options to purchase
5,120,000  shares  (after  effect of stock  splits) of Common Stock of D&PL were
available  for  grant.  Shares  subject  to  options  and  awards  which  expire
unexercised  are available for new option grants and awards under the LTIP.  New
members  of the  Board of  Directors  receive  automatic  grants of  options  to
purchase  62,222 shares upon being named to the Board and each director is given
an additional  annual grant of options to purchase  2,666 shares for each of the
second  through sixth year each  director  serves as such (which grants began in
1998).  At the March 30, 2000 Annual Meeting,  the Board of Directors  agreed to
grant  options to each  Director for 80,000  shares of D&PL Common  Stock.  Such
options are exercisable  ratably over five years  commencing after one year from
the date of grant.

The 2005 Omnibus Stock Plan ("2005 Stock Plan"), approved by the shareholders in
January 2005,  provides the grant of (a)  incentive  stock options as defined in
the Internal Revenue Code of 1986, as amended,  (b) non-qualified stock options,
(c)  restricted  stock,  and (d)  restricted  stock  units to D&PL's  employees,
independent contractors and members of the Board of Directors for the purpose of
encouraging  share ownership of D&PL. Up to 4,500,000  shares shall be available
for grants of awards under the Plan.  The maximum  number of shares which may be
issued for awards of restricted  stock and  restricted  stock units is 2,100,000
shares and the maximum for options is 2,400,000.  The Compensation  Committee of
the Board of Directors  administers the Plan and has sole  discretion  regarding
the  exercisability  of the option  grants.  Any lapsed  awards  shall  again be
available under this plan.

During 2005, approximately 1.1 million stock options were granted under the LTIP
and the 2005 Stock Plan, most of which were granted at exercise prices above the
fair market value of D&PL Common Stock at the time of grant.  These options were
all vested as of August 31, 2005.
<PAGE>

Additional  information  regarding  stock  options  granted and  outstanding  is
summarized below:

                                        Number of
                                         Shares              Price Range
                                      -------------     -----------   ----------
Outstanding at August 31, 2002         4,037,819        $    4.67      $  47.31
Granted                                  258,554            18.28         23.99
Exercised                               (213,545)            4.67         24.25
Lapsed or canceled                       (98,846)           17.85         41.69
                                      -------------     -----------   ----------
Outstanding at August 31, 2003         3,983,982             4.67         47.31
Granted                                   35,332            22.61         25.50
Exercised                               (637,704)            4.67         22.36
Lapsed or canceled                       (51,977)            4.67         22.67
                                      -------------     -----------   ----------
Outstanding at August 31, 2004         3,329,633            10.69         47.31
Granted                                1,170,548            26.02         30.06
Exercised                               (766,109)           10.69         26.82
Lapsed or canceled                       (29,890)           17.78         26.82
                                      -------------     -----------   ----------
Outstanding at August 31, 2005         3,704,182        $   10.69      $  47.31
                                      =============     ===========   ==========

The weighted  average fair values of options granted in 2005, 2004 and 2003 were
$4.64,  $6.14,  and  $6.41 per  share,  respectively.  The fair  value for these
options was estimated at the date of grant, using a Black-Scholes Option Pricing
Model with the following assumptions:

                                 2005                2004               2003
                           --------------     ---------------    ---------------
Expected dividend yield            1.48%               1.00%              1.00%
Expected option lives            4 years             8 years            8 years
Expected volatility               19.81%              16.01%             24.99%
Risk-free interest rates           3.96%               3.82%              3.07%

The  following  table  summarizes  certain  information  about  outstanding  and
exercisable stock options at August 31, 2005:

<TABLE>
<S>                              <C>                    <C>             <C>             <C>             <C>
                                           Options Outstanding                          Options Exercisable
                          -----------------------------------------------------    -------------------------------

                                            Weighted Average         Weighted                           Weighted
                                               Remaining             Average                            Average
Exercise Price                              Contractual Life         Exercise                           Exercise
      Range                  Number            in Years                Price            Number            Price
---------------------     -------------    -------------------    -------------    --------------    -------------
  $10.69 to 19.99            1,646,274            5.2             $      18.95         1,309,339       $ 19.06
  $20.00 to 29.99            1,771,791            4.9                    25.95         1,631,552         26.00
  $30.00 to 39.99              284,117            5.5                    31.74           284,117         31.74
  $40.00 to 47.31                2,000            2.7                    47.31             2,000         47.31
                          -------------                                            --------------
                             3,704,182            5.1                    23.30         3,227,008         23.70
                          =============                                            ==============
</TABLE>

On May 18, 2005, the Company issued  approximately  145,000 shares of Restricted
Stock to its employees under the provisions of the 2005 Stock Plan.  Pursuant to
the 2005 Stock  Plan,  Restricted  Stock is a Stock Award under which the shares
are subject to forfeiture  should the participant not be employed by the Company
on the date or dates  specified  in the Stock  Award or should  the  performance
goals, if any, specified in the Stock Award not be met. The Stock Award for this
particular  issuance did not contain any performance  goals.  Ownership of these
instruments vest to the holders over a three-year period, as follows: 40% on May
19, 2006; 30% on May 18, 2007; and 30% on May 18, 2008.

The  Company  also  issued  24,000   Restricted   Stock  Units  (RSU's)  to  its
non-employee  directors under the provisions of the 2005 Stock Plan. Pursuant to
the 2005 Stock Plan,  RSU means a Stock Award  subject to a period or periods of
time after which the participant will receive shares if the conditions contained
in such award have been met.  This  particular  issuance of RSU's  contained  no
conditions  other than the  passage of time.  The RSU's  issued vest on the same
schedule as the Restricted Stock discussed above.

Deferred  compensation  expense of  approximately  $4.4  million  related to the
Restricted Stock and RSU's will be recognized over the three-year vesting period
based on the  percentage  of the units  vesting  in each  respective  year.  The
deferred  compensation  expense was calculated  based on the market price of the
Company's  common  stock on the date of grant,  which was  $26.31.  For the year
ended  August  31,  2005,  the  Company  recognized  approximately  $508,000  of
compensation expense related to these instruments.
<PAGE>

Treasury Stock

In February 2000, the Board of Directors authorized a program for the repurchase
of up to $50 million of D&PL's common stock. The shares  repurchased  under this
program were used to provide for option exercises,  the potential  conversion of
D&PL's Series M Convertible  Non-Voting  Preferred  shares and for other general
corporate purposes. At August 31, 2005, D&PL had repurchased 2,229,900 shares at
an aggregate  purchase price of  approximately  $47,505,000  under this program.
This repurchase plan was terminated and replaced by the June 2005 plan discussed
below.

On May 24, 2005,  D&PL completed the purchase of 2,374,940  shares of its common
stock pursuant to a modified  "Dutch auction" tender offer that was announced on
April 20, 2005, under a new plan separately  approved by the Board of Directors.
The shares were  purchased for $27.00 per share for an aggregate  purchase price
of $64,123,380.  The Company also incurred  associated expenses of approximately
$675,000 in connection with the acquisition of these shares  (primarily  related
to legal and  advisory  services)  that have been  recorded  as a  component  of
treasury stock.

On June 30, 2005,  D&PL's Board of Directors  authorized a new share  repurchase
program to buy up to an additional  $50 million of the  Company's  common stock.
This program replaces the plan established in February 2000. At August 31, 2005,
D&PL  had  repurchased   110,000  shares  at  an  aggregate  purchase  price  of
approximately $2,807,000 under this plan.

Earnings Per Share

Dilutive  common  share  equivalents  consist  of  D&PL's  Series M  Convertible
Non-Voting  Preferred shares, the outstanding  options to purchase D&PL's common
stock that have been issued under the 1993 Stock Option Plan, the 1995 Long-Term
Incentive  Plan and the 2005 Omnibus Stock Plan and the  outstanding  Restricted
Stock and  Restricted  Stock Units which have been issued under the 2005 Omnibus
Stock Plan.  Approximately  599,000,  551,000 and 1,117,000  outstanding  common
stock options were not included in the computation of diluted earnings per share
for the years ended August 31, 2005,  2004 and 2003,  respectively,  because the
effect of their  exercise was not dilutive  based on the average market price of
D&PL's common stock for each  respective  reporting  period.  For the year ended
August 31,  2005,  the  Restricted  Stock and  Restricted  Stock  Units were not
included  in the  computation  of  diluted  earnings  per  share  as  they  were
anti-dilutive  in the period  presented.  The number of  dilutive  common  share
equivalents  issued in the current year to include or exclude in the computation
of diluted  earnings  per share is  calculated  based on the length of time they
have been outstanding. The excluded options expire at various dates from 2007 to
2015.
<PAGE>

The table below reconciles the basic and diluted per share computations:

<TABLE>
<S>                                                                                       <C>
                                                               For the Years Ended August 31,
                                                               -------------------------------
                                                          2005                2004               2003
                                                     ----------------    ---------------     -------------
Income (in thousands):
Net income                                           $       42,557      $       5,316       $     27,805
Less:  Preferred stock dividends                               (544)              (491)              (288)
                                                     ----------------    ---------------     -------------
Net income for basic EPS                                     42,013              4,825             27,517
Effect of Dilutive Securities:
Convertible Preferred Stock Dividends                           544                491                288
                                                     ----------------    ---------------     -------------
Net income available to common
stockholders plus assumed conversions - for
diluted EPS                                          $       42,557      $       5,316       $     27,805
                                                     ================    ===============     =============
Shares (in thousands):
Basic EPS shares                                             37,958             38,250             38,113
Effect of Dilutive Securities:
Options to purchase common stock                                345                353                414
Convertible preferred stock                                   1,067              1,067              1,067
                                                     ----------------    ---------------     -------------
Diluted EPS shares                                           39,370             39,670             39,594
                                                     ================    ===============     =============
Per Share Amounts:
Basic                                                $         1.11      $        0.13       $       0.72
                                                     ================    ===============     =============
Diluted                                              $         1.08      $        0.13       $       0.70
                                                     ================    ===============     =============
</TABLE>

Shares Outstanding

Additional information regarding shares outstanding is summarized below:

Common Shares                           Number of
                                         Shares
                                      --------------
Outstanding at August 31, 2002          38,204,405
Exercises of stock options                 213,545
Purchases of common stock                 (310,100)
                                      --------------
Outstanding at August 31, 2003          38,107,850
Exercises of stock options                 637,704
Purchases of common stock                 (250,200)
                                      --------------
Outstanding at August 31, 2004          38,495,354
Exercises of stock options                 766,109
Purchases of common stock               (3,161,640)
                                      --------------
Outstanding at August 31, 2005          36,099,823
                                      ==============

19.   UNAUDITED QUARTERLY FINANCIAL DATA

All of D&PL's  domestic  seed products  (including  those  containing  Bollgard,
Bollgard II and  Roundup  Ready  technologies)  are subject to return and credit
risks,  the effects of which vary from year to year. The annual level of returns
and,  ultimately,  net sales and net income,  are influenced by various factors,
principally  commodity  prices and weather  conditions  occurring  in the spring
planting season (during D&PL's third and fourth fiscal quarters).  D&PL provides
for estimated  returns as sales occur.  To the extent actual returns differ from
estimates,  adjustments  to D&PL's  operating  results  are  recorded  when such
differences  become known,  typically in D&PL's fourth quarter.  All significant
returns occur or are accounted for by fiscal year end. D&PL also offers  various
sales incentive  programs for seed and  participate in such programs  related to
the Bollgard, Bollgard II and Roundup Ready technology fees offered by Monsanto.
Generally,  under these  programs,  if a farmer  plants his seed and the crop is
lost  (usually  due to  inclement  weather) by a certain  date, a portion of the
price of the seed and technology fees are forgiven or rebated to the farmer. The
amount of the  refund  and the  impact to D&PL  depends  on a number of  factors
including  whether  the farmer can  replant  the crop that was  destroyed.  D&PL
records monthly estimates to account for these programs. The majority of program
rebates  occur during the second,  third and fourth  quarters.  Essentially  all
material  claims under these  programs  have  occurred or are  accounted  for by
fiscal year end.  Generally,  international  sales are not subject to return.  A
substantial  portion of Company  sales is  concentrated  in the second and third
fiscal  quarters.  As a result,  D&PL  generally  expects to incur losses in the
first and fourth quarters.  Management  believes that such seasonality is common
throughout the seed industry.
<PAGE>

Summarized  unaudited  quarterly  financial  data is as follows:  (In thousands,
except per share data)
<TABLE>
<S>                                             <C>             <C>                     <C>    <C>

   ----------------------------------------------------------------------------------------------------------
   Fiscal 2005:  Three months ended
                                               November 30      February 28       May 31         August 31
   ----------------------------------------------------------------------------------------------------------
   Net sales and licensing fees                $     17,454    $   119,859     $  203,320     $     25,452
   Gross profit                                       9,033         44,684         73,573            4,731
   Net (loss) income applicable to
        common shares                                (4,445)        19,032         36,156           (8,730)
   Net (loss) income per share-basic (2)              (0.12)          0.49           0.94            (0.24)
   Weighted average number of shares used
        in quarterly per share calculations-basic    38,544         38,763         38,416           36,133
   Net (loss) income per share-diluted (2)            (0.12)          0.48           0.91            (0.24)
   Weighted average number of shares used
        in quarterly per share calculations-diluted  38,544         40,276         39,839           36,133
   ----------------------------------------------------------------------------------------------------------
   Fiscal 2004:  Three months ended
                                               November 30      February 29       May 31         August 31
   ----------------------------------------------------------------------------------------------------------
   Net sales and licensing fees                $     13,837   $     88,643     $  185,649     $     24,636
   Gross profit                                       5,809         32,164         64,555            6,480
   Net (loss) income applicable to
        common shares (1)                            (7,085)         9,315         31,301          (28,706)
   Net (loss) income per share-basic (1) (2)          (0.19)          0.24           0.82            (0.75)
   Weighted average number of shares used
        in quarterly per share calculations-basic    38,099         38,138         38,311           38,451
   Net (loss) income per share-diluted (1)(2)         (0.19)          0.24           0.79           (0.75)
   Weighted average number of shares used
        in quarterly per share calculations-diluted  38,099         39,768         39,799           38,451
   ----------------------------------------------------------------------------------------------------------
   Fiscal 2003:  Three months ended
                                               November 30      February 28         May 31       August 31
   ----------------------------------------------------------------------------------------------------------
   Net sales and licensing fees                $      5,599    $   107,519     $  168,221     $      2,460
   Gross profit                                       1,311         41,842         57,841             (327)
   Net (loss) income applicable to
        common shares (3)                            (7,484)        16,068         28,401           (9,468)
   Net (loss) income per share-basic (2) (3)          (0.20)          0.42           0.75            (0.25)
   Weighted average number of shares used
        in quarterly per share calculations-basic    38,176         38,124         38,049           38,103
   Net (loss) income per share-diluted (2)(3)         (0.20)          0.41           0.72            (0.25)
   Weighted average number of shares used
        in quarterly per share calculations-diluted  38,176         39,556         39,598           38,103
   ----------------------------------------------------------------------------------------------------------
</TABLE>

          (1) The 2004 fourth  quarter  includes the effect of recording a $38.5
          million charge for a write off of in-process  research and development
          and  related  transaction  expenses  related to our  August  24,  2004
          acquisition of global licenses to develop and commercialize Syngenta's
          insect resistance technology in cottonseed.

          (2) The sum of the  quarterly  net (loss) income per share amounts may
          not equal the  annual  amount  reported  since per share  amounts  are
          computed  independently for each quarter,  whereas annual earnings per
          share  are  based  on  the  annual  weighted   average  shares  deemed
          outstanding during the year.

          (3) The 2003  first and third  quarters  each  include  the  effect of
          recording a $0.5 million charge in each quarter for the closing of two
          U.S.  locations  and  reductions  in the  number  of  employees  at an
          international  wholly-owned  subsidiary and at an international  joint
          venture.
<PAGE>

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

Not applicable

ITEM 9A. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

We have established disclosure controls and procedures,  as such term is defined
in Rule 13a - 15(e) under the  Securities  Exchange Act of 1934.  Our disclosure
controls  and  procedures  are  designed  to ensure  that  material  information
relating to us,  including our consolidated  subsidiaries,  is made known to our
principal executive officer and principal financial officer by others within our
organization.   Under  the  supervision  and  with  the   participation  of  our
management,  including our principal  executive officer and principal  financial
officer,  we conducted an  evaluation  of the  effectiveness  of our  disclosure
controls and  procedures as of August 31, 2005.  Based on this  evaluation,  our
principal  executive officer and principal  financial officer concluded that our
disclosure  controls and  procedures  were  effective as of August 31, 2005,  to
ensure that the  information  required to be disclosed by us in the reports that
we file or submit  under the  Securities  and  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange Commission's rules and forms.

(b) Changes in Internal Controls.

There  have not been any  changes  in D&PL's  internal  control  over  financial
reporting or in other factors that have materially  affected,  or are reasonably
likely to materially affect, D&PL's internal control over financial reporting.

(c) Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal
control over  financial  reporting,  as such term is defined in Rule 13a - 15(f)
under the Securities and Exchange Act of 1934. Under the supervision of and with
the participation of our management,  including our principal  executive officer
and principal financial officer, we conducted an evaluation of the effectiveness
of our internal control over financial reporting as of August 31, 2005, based on
the criteria  established in Internal  Control - Integrated  Framework issued by
the Committee of Sponsoring  Organizations  of the Treadway  Commission  (COSO).
Based on this  evaluation,  our management  concluded that our internal  control
over financial  reporting was effective as of August 31, 2005. Our  management's
assessment of the effectiveness of our internal control over financial reporting
as of August 31, 2005, has been audited by KPMG LLP, an  independent  registered
public accounting firm, as stated in their report which is included herein.

ITEM 9B. OTHER INFORMATION

The Board of  Directors  of D&PL has  established  January  16, 2006 as the next
Annual Meeting of  Shareholders.  Shareholders of record as of November 18, 2005
will be entitled to vote at that meeting.
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to this item is set forth in D&PL's Proxy Statement for
the Annual  Meeting of  Stockholders  to be held on January 16, 2006 to be filed
with the Commission pursuant to Regulation 14(a) no later than November 29, 2005
and is incorporated herein by reference.

D&PL has adopted a written code of ethics, the "Delta and Pine Land Company Code
of Business  Conduct and Ethics" which is applicable to all directors,  officers
and employees of D&PL,  including D&PL's principal executive officer,  principal
financial  officer,   principal  accounting  officer  or  controller  and  other
executive  officers  identified  pursuant  to this Item 10 who  perform  similar
functions (collectively,  the "Selected Officers"). In accordance with the rules
and  regulations of the Securities and Exchange  Commission,  a copy of the code
has been posted on the Company's  website.  The Company  intends to disclose any
changes in or waivers from its code of ethics applicable to any Selected Officer
on its website at http://www.deltaandpine.com or by filing a Form 8-K.

Stockholders  may  obtain  a  copy  of  D&PL's  Nominating/Corporate  Governance
Committee  Charter,  Compensation  Committee  Charter,  Audit Committee Charter,
Corporate Governance Guidelines, and Code of Business Conduct and Ethics without
charge,  by  contacting:  R. D. Greene,  Vice President - Finance and Treasurer,
Delta and Pine Land Company, One Cotton Row, Scott, Mississippi 38772, via email
at   ricky.d.greene@deltaandpine.com,   or   by   accessing   our   website   at
www.deltaandpine.com under About D&PL - Corporate Governance.

The Annual Certification of the Company's Chief Executive Officer required to be
furnished to the New York Stock Exchange  pursuant to Section  302A.12(a) of the
NYSE Listed Company  Manual was previously  filed at the New York Stock Exchange
on November 22, 2004.

ITEM 11.  EXECUTIVE COMPENSATION
ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS
ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information  with respect to these items are set forth in D&PL's Proxy Statement
for the Annual  Meeting of  Stockholders  to be held on January  16,  2006 to be
filed with the  Commission  pursuant to Regulation  14(a) no later than November
29, 2005 and is incorporated herein by reference.

<PAGE>

                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

  1.  Financial Statements - the following consolidated financial statements
      of Delta and Pine Land  Company  and  subsidiaries  are  submitted  in
      response to Part II, Item 8:

      Reports of Independent Registered Public Accounting Firm

      Consolidated  Statements  of Income - for each of the three years
      in the period ended August 31, 2005

      Consolidated Balance Sheets - August 31, 2005 and 2004

      Consolidated  Statements  of Cash  Flows - for each of the  three
      years in the period ended August 31, 2005

      Consolidated  Statements of Changes in  Stockholders'  Equity and
      Comprehensive  Income - for each of the three years in the period
      ended August 31, 2005

      Notes to Consolidated Financial Statements

  2.  Financial   Statement  Schedule  -  the  following  financial
      statement   schedule   of  Delta  and  Pine  Land   Company   and
      subsidiaries is submitted in response to Part IV, Item 15:

      Report of Independent Registered Public Accounting Firm...............62

      Schedule II - Consolidated Valuation and Qualifying Accounts..........63

      All  other  schedules  have been  omitted  as not  required,  not
      applicable  or because all the data is included in the  financial
      statements.

   3. Exhibits

      The exhibits to the Annual  Report of Delta and Pine Land Company
      filed herewith are listed on Page 64.

<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized on November 14, 2005.

DELTA AND PINE LAND COMPANY
(Registrant)

/s/ Jon E. M. Jacoby                                          November 14, 2005
---------------------------
By:  Jon E. M. Jacoby, Chairman of the Board

Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
Report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

        Signature                  Title                           Date


/s/ W. Thomas Jagodinski   President, Chief Executive         November 14, 2005
-------------------------- Officer, and Director
W. Thomas Jagodinski       (Principal Executive Officer)


/s/ R. D. Greene           Vice President - Finance,          November 14, 2005
-------------------------- Treasurer and Assistant Secretary
R. D. Greene               (Principal Financial and
                           Accounting Officer)


/s/ F. Murray Robinson     Vice Chairman and Director         November 14, 2005
--------------------------
F. Murray Robinson

/s/ Stanley P. Roth        Vice Chairman and Director         November 14, 2005
--------------------------
Stanley P. Roth


/s/ Nam-Hai Chua           Director                           November 14, 2005
--------------------------
Nam-Hai Chua


/s/ Joseph M. Murphy       Director                           November 14, 2005
--------------------------
Joseph M. Murphy


/s/ Rudi E. Scheidt        Director                           November 14, 2005
--------------------------
Rudi E. Scheidt

<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders
Delta and Pine Land Company:

Under date of November 14, 2005, we reported on the consolidated  balance sheets
of Delta and Pine Land Company and  subsidiaries  (the Company) as of August 31,
2005 and 2004,  and the related  consolidated  statements of income,  changes in
stockholders'  equity and comprehensive  income,  and cash flows for each of the
years in the  three-year  period ended August 31, 2005,  contained in the Annual
Report on Form 10-K for the year  2005.  In  connection  with our  audits of the
aforementioned  consolidated  financial statements,  we also audited the related
consolidated  financial  statement schedule listed in Part IV, Item 15(a)2. This
financial statement schedule is the responsibility of the Company's  management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.

In our opinion,  such financial statement schedule,  when considered in relation
to the  basic  consolidated  financial  statements  taken as a  whole,  presents
fairly, in all material respects, the information set forth therein.

KPMG LLP

Jackson, Mississippi
November 14, 2005

<PAGE>

SCHEDULE II
DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<S>                      <C>            <C>              <C>            <C>                      <C>             <C>
                                                                (In thousands)
                                      ----------------------------------------------------------------------------------
             Column A                  Column B                  Column C                  Column D           Column E
             --------                  --------                  --------                  --------           --------
                                      Balance at       Charged                                                Balance
                                       Beginning       to Costs          Charged to                            at End
                                          of             and              Other                                 of
            Description                 Period         Expenses          Accounts        Deductions           Period
------------------------------------------------------------------------------------------------------------------------

Fiscal year ended August 31, 2003

Allowance for doubtful accounts      $      1,100     $    476           $    472(a)    $       (39)(b)     $    2,009

Fiscal year ended August 31, 2004

Allowance for doubtful accounts      $      2,009     $    263           $      -(a)    $      (748)(c)     $    1,524

Fiscal year ended August 31, 2005

Allowance for doubtful accounts      $      1,524     $    839           $    119(a)    $      (698)(d)     $    1,784

(a) Amount charged to cumulative translation adjustment for fluctuations in
non-U.S. dollar denominated reserves.

(b) Write off of uncollectible accounts, net of recoveries.

(c) Amount includes $724 related to a write-off against the allowance for
doubtful accounts of amounts previously deemed uncollectible and provided for in
prior years. In addition, certain payables of a similar amount related to this
item were also reduced in the prior years.

(d) Amount represents write-off against the allowance for doubtful accounts
deemed uncollectible and provided for in prior years.
</TABLE>

<PAGE>

                                      INDEX
                     EXHIBITS TO ANNUAL REPORT ON FORM 10-K
                           YEAR ENDED AUGUST 31, 2005
                           DELTA AND PINE LAND COMPANY


Exhibits (1)                                         Description

2.01      Agreement  and Plan of Merger dated as of May 8, 1998,  by and between
          Monsanto Company and Delta and Pine Land Company. (2)

2.02      Termination  Option  Agreement dated as of May 8, 1998, by and between
          Monsanto, Company and Delta and Pine Land Company. (2)

3.01      Restated Certificate of Incorporation of the Registrant dated June 11,
          1993.

3.02      Amended and Restated By-Laws of the Registrant dated April 26, 1993.

4.01      Certificate of Designation,  Convertible  Preferred Stock of Delta and
          Pine Land Company. (3)

4.02      Specimen Certificate representing the Common Stock, par value $.10 per
          share.

4.03      Reserved.

4.04      Rights Agreement,  dated as of August 13, 1996, between Delta and Pine
          Land Company and Harris Trust and Savings Bank,  including the form of
          Right  Certificate and related form of Election to Purchase as Exhibit
          A and the Summary of Rights to Purchase Preferred Shares as Exhibit B.
          (4)

4.05      Amendment  No. 1 to the Rights  Agreement  dated May 8,  1998,  by and
          between  Delta and Pine Land  Company and the Harris Trust and Savings
          Bank. (2)

4.06      Amendment  No. 2 to the  Rights  Agreement  dated  May 8,  1998 by and
          between  Delta and Pine Land  Company and the Harris Trust and Savings
          Bank. (14)

4.07      Certificate of Designations of the rights and privileges of the shares
          of junior participating preferred stock created on August 13, 1996, to
          be filed pursuant to Section 151 of the Delaware  General  Corporation
          Law. (4)

4.08      Delta and Pine Land Company 2005 Omnibus Stock Plan. (6) (19)

10.01     Incentive Bonus Program. (1) (6)

10.02     Delta and Pine Land Company Retirement Plan as amended and restated as
          of  January  1, 1997 and  further  amended  by  Amendment  No. 1 dated
          October 23, 2002, Amendment Nos. 2 and 3 dated December 20, 2002. (15)

10.03     Supplemental  Executive  Retirement  plan  dated  May  22,  1992,  and
          effective January 1, 1992. (1) (6)

10.04     1993 Stock Option Plan of Registrant, as adopted on June 11, 1993. (1)
          (6)

10.05     Asset  Purchase  Agreement  between  Delta and Pine Land  Company  and
          Cargill, Inc. dated May 2, 1994. (8)

10.06     Delta and Pine Land  Company  Savings  Plan - Wells  Fargo Bank Texas,
          N.A. Defined  Contribution  Master Plan and Trust Agreement,  Adoption
          Agreement dated December 23, 2002, EGTRRA Amendment to the Wells Fargo
          Bank Texas, N.A. Defined  Contribution Master Plan and Trust Agreement
          dated November 1, 2001,  Post-EGTRRA Amendment to the Wells Fargo Bank
          Texas, N.A. Defined Contribution Master Plan and Trust Agreement dated
          September 11, 2003. (15)

10.07     Hartz  Cotton  Acquisition  Agreement  dated  February  2, 1996  among
          Monsanto Company  ("Monsanto"),  Hartz Cotton,  Inc. ("Hartz Cotton"),
          Delta and Pine Land Company (the  "Company") and Paymaster  Technology
          Corp. ("PTC"). (3)

10.08     Trademark  License  Agreement dated February 2, 1996 between  Monsanto
          and D&PL. (3)

10.09     Registration Rights Agreement between D&PL and Monsanto dated February
          2, 1996. (3)

10.10     Reserved.

10.11     Reserved.

10.12     Reserved.

10.13     Reserved.

10.14     Partnership   Agreement  dated  February  2,  1996  between  D&PL  and
          Monsanto. (3)

10.15     Marketing  Services  Agreement  dated  February 2, 1996 between  D&PL,
          Monsanto and D&M Partners. (3)

10.16     Bollgard Gene License and Seed Services  Agreement  dated  February 2,
          1996 between Monsanto, D&M Partners, and D&PL. (3)

10.17     Roundup Ready Gene License and Seed Services  Agreement dated February
          2, 1996 between Monsanto, D&M Partners and D&PL. (3)

10.18     Option Agreement dated February 2, 1996 between Monsanto and D&PL. (3)
          (6)

10.19     Agreement between the D&PL Companies and the Sure Grow Companies, Sure
          Grow Shareholders and Sure Grow Principals dated May 20, 1996. (9)

10.20     Amended  and  Restated  Delta and Pine  Land  Company  1995  Long-Term
          Incentive Plan, as adopted on February 6, 1996. (6) (15)

10.21     Amendment to  Agreements  dated as of December 8, 1999, by and between
          Monsanto Company,  Registrant, D&M Partners, a partnership of Monsanto
          and D&PL, and Paymaster Technology Corp. (12)

10.22     D&M International Operating Agreement on March 10, 1995, between Delta
          and Pine  Land  Company,  through  its  wholly-owned  subsidiary  D&PL
          International Technology Corp. and Monsanto Company. (13)

10.23     Bollgard II Gene License and Seed Services  Agreement  dated  December
          11, 2000. (11)

10.24     Roundup  Ready  Soybean  License and Seed  Services  Agreement and the
          Amended and Restated Licensee Incentive Agreement. (11)

10.25     Bollgard Gene License Agreement by and between Monsanto Company, Delta
          and Pine Land Company,  D&PL  International  Technology Corp., and D&M
          International, L.L.C. and Amendment. (10)

10.26     Redemption Agreement dated as of May 28, 2002 among D&M International,
          L.L.C., D&PL International  Technology Corp.,  Pharmacia  Corporation,
          solely  for the  purposes  of  Section  1.2c and  Articles  II and III
          thereof, and Monsanto Company, and, solely for the purposes of Section
          3.2 thereof, Delta and Pine Land Company. (10)

10.27     Amendment  to Bollgard  Gene  License and Seed  Services  Agreement of
          February 2, 1996 dated March 26, 2003. (15)

10.28     Amendment to Roundup Ready Gene License and Seed Services Agreement of
          February 2, 1996 dated March 26, 2003. (15)

10.29     Restated  License  Acquisition  Agreement  dated August 24, 2004 among
          Syngenta Crop Protection AG and Delta and Pine Land Company. (16) (*)

10.30     Restated  VIP3A Gene  License  Agreement  dated  August 24, 2004 among
          Syngenta Crop Protection AG and Delta and Pine Land Company. (16) (*)

10.31     Restated  Cry1Ab Gene  License  Agreement  dated August 24, 2004 among
          Syngenta Crop Protection AG and Delta and Pine Land Company. (16) (*)

10.32     Credit  agreement  among  Delta and Pine Land  Company,  as  Borrower,
          Certain of its Subsidiaries, as Guarantors, and Bank of America, N.A.,
          as Lender,  dated as of April 15, 2005 and related  forms of Revolving
          Note dated April 15, 2005 and Autoborrow Service Agreement dated April
          15, 2005. (21)

10.33     Roundup  Ready Flex Gene  License and Seed  Services  Agreement  dated
          December 22, 2004. (20)

10.34     Form  of  Restricted  Stock  Unit  Award  -  Member  of the  Board  of
          Directors. (6) (22)

10.35     Form of Restricted Stock Award - Member of the Board of Directors. (6)
          (22)

10.36     Form of Restricted Stock Award - Employee. (6) (22)

10.37     Form of Non-Qualified Stock Option Award. (6) (22)

10.38     Employment Agreement between Delta and Pine Land Company and W. Thomas
          Jagodinski effective September 1, 1997. (6) (18)

14.00     Delta and Pine Land  Company  Code of  Business  Conduct and Ethics as
          amended October 28, 2004. (17)

16.00     Letter  from  Arthur  Andersen  LLP to  the  Securities  and  Exchange
          Commission   dated  May  14,  2002  regarding   change  in  certifying
          accountant. (5)

21.01     Subsidiaries of the Registrant. (23)

23.01     Consent of Independent Registered Public Accounting Firm. (23)

31.01     Section 302 Certification of Principal Executive Officer. (23)

31.02     Section 302 Certification of Principal Financial Officer. (23)

32.01     Certification  of  Periodic  Financial  Report  Pursuant  to 18 U.S.C.
          Section 1350 by Principal Executive Officer. (23)

32.02     Certification  of  Periodic  Financial  Report  Pursuant  to 18 U.S.C.
          Section 1350 by Principal Financial and Accounting Officer. (23)

-------------------------

     (1)  All incorporated by reference from Registration Statement on Form S-1,
          File No. 33-61568, filed June 29, 1993 except as otherwise noted
          herein.
     (2)  Incorporated by reference from Form 8-K filed May 14, 1998
     (3)  Incorporated  by reference  from Form 8-K, File No.  000-14136,  filed
          February 19, 1996
     (4)  Incorporated  by reference  from Form 8-A, File No.  000-21293,  filed
          September 3, 1996
     (5)  Incorporated by reference from Form 8-K filed May 17, 2002
     (6)  Represents management contract or compensatory plan
     (7)  Incorporated  by reference from Form 10-Q, File No.  000-21788,  filed
          July 14, 1995
     (8)  Incorporated by reference from Form 8-K filed May 16, 1994
     (9)  Incorporated by reference from Form 8-K, File No. 000-21788, filed
          June 4, 1996
     (10) Incorporated by reference from Form 10-K filed November 25, 2002
     (11) Incorporated by reference from Form 10-K filed November 29, 2001
     (12) Incorporated by reference from Form 8-K filed May 18, 2000
     (13) Incorporated by reference from Form 8-K filed September 14, 2000
     (14) Incorporated by reference from Form 10-K filed November 24, 1998
     (15) Incorporated by reference from Form 10-K filed November 26, 2003
     (16) Incorporated by reference from Form 10-K filed November 15, 2004
     (17) Incorporated by reference from Form 8-K filed November 1, 2004
     (18) Incorporated by reference from Form 10-Q filed January 15, 1998
     (19) Incorporated by reference from Form S-8 filed March 28, 2005
     (20) Incorporated by reference from Form 10-Q filed April 11, 2005
     (21) Incorporated by reference from Form 8-K filed April 20, 2005
     (22) Incorporated by reference from Form 8-K filed May 24, 2005
     (23) Filed  herewith
     (*)  The Company has applied for and received SEC approval for confidential
     treatment for portions of this  agreement.  Accordingly,  portions  thereof
     have been omitted and filed separately.