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, 2004

                                       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
27,  2004,  as  reported  on the New  York  Stock  Exchange,  was  approximately
$902,745,000.  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, 2004,  Registrant had 38,550,251  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 11,
2005. (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.  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 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.

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,  technological know-how in producing and conditioning
high-quality  seed  and our  brand  name  recognition.  Furthermore,  Monsanto's
Bollgard 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 2004, the majority of international sales
came from direct in-country operations (primarily Argentina, Australia, Brazil,
China, South Africa and Turkey).

See Note 12 of the Notes to Consolidated Financial Statements in Part II, Item 8
for further details about business segments.

---------------------
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>

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
Cottonseed  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 December  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,  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.  MDM
will introduce  transgenic  cottonseed  varieties  containing  both Bollgard and
Roundup Ready gene  technologies  in the Brazilian  market as soon as government
approvals are obtained.  Monsanto is responsible for obtaining these  government
approvals and has announced approval may not occur until 2005 or thereafter. MDM
is 51% owned by D&M  International,  LLC and 49% owned by Maeda  Administracao e
Participacoes 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.  These two new potential  markets  contain  approximately  4.5
million  acres of cotton  planted  in 2001 which is almost 2.5 times the size of
the combined Hebei and Anhui markets.  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.
However,  our joint venture in Hebei  province,  Ji Dai,  signed a  distribution
agreement  with a  party  in the  Henan  province  and  distributed  seed  there
beginning in fiscal 2003.  We expect 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(R) 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 with the intent to breed,  test,  produce,  market and sell  agricultural
seeds and services in India.

Employees
---------

As of  October  31,  2004,  we  employed  a  total  of 528  full-time  employees
worldwide,  excluding  approximately 102 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
----------------------------

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, thus clearing the way for commercial sales of seed
containing the Bollgard gene. 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  which  time  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.

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 15%. 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,  2011,  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, 2011.

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.  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.

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 cotton of Syngenta's  VIP3A and Cry1Ab  insect  resistance
genes (the "VipCotTM 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 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.


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.

Herbicide Tolerance for Cotton
------------------------------

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.  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.

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 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 four countries  (Argentina,
Australia, Brazil, 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. 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.

<PAGE>

Commercial Seed
---------------

The following  table  presents the number of commercial  cottonseed  and soybean
seed varieties we sold in the years ended August 31, 2004 and 2003:

                                             2004                   2003
                                        ---------------       ---------------
Cotton
     Conventional                                  11                   20
     Bollgard                                       3                    5
     Roundup Ready                                 16                   14
     Bollgard/Roundup Ready                        14                   14
     Bollgard II/Roundup Ready                      1                    2
                                        ---------------       ---------------
                                                   45                   55
                                        ===============       ===============
Soybeans
     Conventional                                   1                    1
     Roundup Ready                                 19                   15
     STS                                            2                    2
                                       ---------------       --------------
                                                   22                   18
                                       ===============       ==============

In addition to the above, in 2004, we had 87 experimental cotton varieties and 6
experimental   soybean   varieties   in  late   stage   development   prior   to
commercialization.  In  2003,  we had 76  experimental  cotton  varieties  and 6
experimental   soybean   varieties   in  late   stage   development   prior   to
commercialization.

Seed of all commercial  plant species is either  varietal or hybrid.  Our cotton
and 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 varietal  and,  therefore,  can be grown from seed of parent
plants  saved by the  growers,  most  farmers in our  primary  domestic  markets
purchase seed from commercial  sources each season because  cottonseed  requires
delinting  prior to seed  treatment  with  chemicals  and 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 and Roundup Ready, saved from prior crops.

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 and Roundup Ready  licensing fees are recognized when the
seed is  shipped.  Domestically,  the  licensing  fees  charged to  farmers  for
Bollgard 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 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 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
Investor  Relations,  as soon as reasonably  practicable after we electronically
file such material with or furnish such material to the  Securities and Exchange
Commission.

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
                                           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 defendent 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(R)  glyphosate tolerance 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 as a defendant in a lawsuit filed in the 110th Judicial  District
Court of Floyd County,  Texas, on November 21, 2002. In this multiple  plaintiff
case, each plaintiff  alleges that seed purchased from D&PL failed to perform as
represented  and seeks  compensatory  damages  for crop  losses  during the 2002
growing  season.  D&PL and the  claimants  in this case have now entered into an
agreement  for binding  arbitration  of the claims  pursuant to the  arbitration
clause  contained  in the  Monsanto  Gene  Licensing  Agreement  executed by the
growers.  Although the claim involves a cotton variety that contains the Roundup
Ready gene, no claim against Monsanto was alleged,  nor was there any allegation
that Monsanto  technology caused or contributed to plaintiffs' alleged problems.
Thus, it does not presently appear that Monsanto is  contractually  obligated to
defend and/or indemnify D&PL in this case.

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. In the second Holmes County lawsuit, D&PL has filed a third party
Complaint and seeks a declaration that its insurers 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  defendant  removed the case to
the United  States  District  Court for the  Southern  District of  Mississippi,
Jackson  Division,  where a motion to remand was granted on September  28, 2004.
Accordingly  that case has now been  returned  to the  docket of Holmes  County,
Mississippi.  Both  cases  are  in the  preliminary  discovery  stage.  However,
dispositive  motions are  pending in the March 14, 2002 filed case,  and will be
filed  shortly in the August 19, 2002 case which has just been returned to state
court.  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.

The pending  lawsuits filed against D&PL in Hockley  County,  Texas on April 14,
1999,  the two lawsuits filed November 15, 1999, in the Court of Common Pleas of
Hampton County,  South Carolina,  and the three lawsuits filed July 29, 2002, in
the  Court of Common  Pleas of  Hampton  County,  South  Carolina  have now been
resolved without material financial impact on the Company.

All lawsuits related to product claims seek monetary damages. See Note 17 of the
Notes to Consolidated  Financial  Statements in 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(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.

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 and counterclaims to
Monsanto's  claims based on the issues submitted by D&PL to the Executive Panel.
On November 8, 2004,  Monsanto  submitted  one new claim  allegedly  involving a
dispute under the license  agreements to the Executive Panel.  D&PL is committed
to  participating  in good faith  resolution  of the  issues in dispute  through
arbitration or through the Executive Panel, as applicable.

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,  referenced  under  "Product  Claims"  immediately
above,  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.

In November  2002,  D&PL filed suit in the Circuit Court of  Washington  County,
Mississippi,  against its fire insurance carrier,  Reliance Insurance Company of
Illinois.  That suit seeks recovery of seed inventory lost, damaged or destroyed
during a fire that occurred in November 1999 at D&PL's  Hollandale,  Mississippi
facility.  A Stay Order has now been entered in this case pursuant to the powers
of the  Receiver  of Reliance  Insurance  Company of  Illinois,  which is now in
liquidation.  Therefore,  we are currently  prevented from formally pursuing the
matter.

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, through
August 2004, 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 June 2004, a
panel of legal  experts  appointed  by the  court in which  the case is  pending
rendered an advisory  opinion that Turkish law should govern the  termination of
OTIT's  distributorship  agreement and, that under Turkish law, the January 2001
notice of termination  was not  effective.  The court has not entered a decision
after  receipt  of this  advisory  opinion.  Both OTIT and Turk  Deltapine  have
continued to distribute  cotton  planting seed of Sure Grow varieties in Turkey.

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.  The  litigation  is currently in discovery  and
pretrial  proceedings.  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
$697,000 at October 31, 2004, 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 Corp.
---------------------------------------------

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 a 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  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 intends to seek an
interlocutory  appeal of this issue to the Mississippi  Supreme Court.  D&PL has
also sought interlocutory review by the Mississippi Supreme Court of a discovery
ruling  relating to documents  that Monsanto  claimed to be privileged  that the
original  trial judge  ordered  Monsanto to produce and that the new trial judge
ordered D&PL to return.  The Court has  temporarily  suspended the dates for the
completion of discovery,  originally  established in a September 2003 Order, and
no trial date has been set.


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

Not applicable.


<PAGE>


                                     PART II

ITEM 5.   MARKET FOR THE 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, 2004
Market Price Range - Low       $22.62      $24.28        $22.80       $20.90
                   - High       25.40       26.63         25.82        25.80

FYE August 31, 2003
Market Price Range - Low       $17.96      $19.18        $18.70       $21.78
                   - High       20.79       20.96         24.02        25.30


Dividends totaling $0.46 and $0.27 per share on common and preferred shares were
paid in 2004 and 2003,  respectively.  The Board of Directors  anticipates  that
quarterly  dividends of $0.12 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  2004  were  $17.6  million  and  should
approximate $18.5 million in 2005.  Aggregate dividends paid on preferred shares
in 2004 were $0.5 million and should  approximate  $0.5 million in 2005.  In the
first  quarter of fiscal  2005,  the Board of  Directors  authorized a quarterly
dividend of $0.12 per share to be paid on December 14, 2004, to  shareholders of
record on November 30, 2004.

On  October  31,  2004,  there  were  approximately  6,000  shareholders  of our
38,550,251 outstanding common shares.

Equity Compensation Plan Information
------------------------------------

The following table reflects the described information as of August 31, 2004:
<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                  3,329,633                      $ 20.63                         1,140,331

Equity compensation plans not
approved by security holders                      -                             -                                -
</TABLE>

Issuer Purchases of Equity Securities
-------------------------------------

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 are to be used to provide  for option  exercises,  conversion  of D&PL's
Series M Convertible Non-Voting Preferred shares and for other general corporate
purposes.



<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,
2004:

<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
                                                Shares        Price Paid          Publicly Announced           Purchased Under the
                 Period                        Purchased       per Share                Plan                          Plan
-----------------------------------------     ------------    ------------    --------------------------    -----------------------

June
(June 1, 2004 to June 30, 2004)                 75,000          $21.26                 75,000                    $21,124,813
July
(July 1, 2004 to July 31, 2004)                 32,200           21.81                 32,200                     20,422,432
August
(August 1, 2004 to August 31, 2004)                  -               -                      -                     20,422,432
                                              ------------                    --------------------------
Total                                           107,200          21.42                107,200                     20,422,432
                                              ============                    ==========================
</TABLE>

There were no shares  purchased  in the  quarter  other  than  those  authorized
pursuant to the February 2000 stock repurchase plan.

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 Year Ended August 31,
----------------------------------------------------------------------------------------------------------------------

                                              2004            2003            2002            2001           2000
                                           -----------     ------------    -----------     -----------    ------------
Operating Results:
Net sales and licensing fees                 $314,871         $284,487       $260,041        $308,307        $303,816
Special charges and unusual
   items(1)                                         -             (962)             -          (6,301)         71,233
In-process research and development
   and related transaction costs(2)           (38,532)               -              -               -               -
Net income                                      5,316           27,805         30,339          32,307          79,326
Balance Sheet Summary:
Current assets                               $375,475         $355,261       $308,468        $337,737        $313,701
Current liabilities                           226,225          204,050        174,124         208,041         215,315
Working capital                               149,250          151,211        134,344         129,696          98,386
Total assets                                  457,023          431,552        383,142         411,521         390,134
Long-term debt                                 16,486            1,557          1,176           2,836           2,482
Stockholders' equity                          209,726          217,107        202,207         188,408         159,628
Per Share Data:
Net income - Diluted                            $0.13            $0.70          $0.76           $0.81           $1.98
Book value                                       5.48             5.70           5.27            4.90            4.15
Cash dividends per common share                  0.46             0.27           0.20            0.15            0.12
Weighted average number of shares
used in net income per share
calculation -
  Diluted                                      39,670           39,594         39,781          40,111          40,159


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

(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.  In 2000, we reported the $81 million merger  termination
     fee, net of related expenses, as an unusual income item.

(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 fiscal year ended  August 31, 2004 due to
strong  sales of our newer  cottonseed  products in the U.S.  and a  substantial
increase in soybean seed sales and international sales over 2003. Licensing fees
from cottonseed  sales also increased over 2003 due to trait fee price increases
enacted by Monsanto and higher unit sales of stacked gene products  coupled with
a decline in  technology  fee  rebates  in 2004 for crop  destruct  and  replant
program  claims.  In 2004, much of the U.S.  cotton belt  experienced  excellent
weather  conditions  during  planting  and  much of the  growing  season.  These
favorable  weather  conditions  resulted in lower rebates than we experienced in
2003. Under the crop destruct  program,  if a farmer plants  transgenic seed and
his crop is  destroyed  within  sixty days of  planting,  Monsanto,  after field
inspection, may forgive or waive the technology fee on the affected acreage. Our
U.S. cottonseed business also benefited from strong sales of our newer products,
including DP 555 BG/RR and DP 444 BG/RR, the two most popular  varieties planted
in the U.S. in 2004.  DP 555 BG/RR was the most popular  variety  planted in the
U.S.  in 2003 and 2004,  and our 2004 unit sales of this  variety  increased  by
approximately 50% over last year. Likewise,  DP 444 BG/RR sales were very strong
in 2004, the first year of wide-scale  commercial sales. We believe DP 444 BG/RR
sales could have been higher had we not been  limited by our seed supply of this
variety.  Overall,  we believe 2004 operating  results were  diminished due to a
reduction in U.S. cotton acreage from 2003 in our most  profitable  regions east
of Texas.  In a March 31, 2004 report issued by the United States  Department of
Agriculture ("USDA"),  U.S. cotton acreage was forecast to be 14.4 million acres
in 2004, which  represented an increase of approximately  1.0 million acres over
2003.  However,  strong soybean commodity prices during the 2004 planting season
resulted in a shift of acres away from cotton and into  soybeans.  In September,
2004, the USDA issued another report which  reflected an estimate of U.S. cotton
plantings of 13.7 million acres. However, this report indicated acres were lower
in areas east of Texas which are more profitable to us and where we have greater
market share.  The report also  reflected an increase in cotton  plantings  over
2003 in Texas,  which has less profit  potential  for us and where we have lower
market  share.  Our  market  share was stable to  slightly  higher in the cotton
growing  regions east of Texas in 2004, but declined in Texas,  due in part to a
lack of adequate supplies of products best suited for that market.

Our 2004 financial  results were affected by a charge to earnings related to the
acquisition of technology licenses that occurred during our fourth quarter.  Our
pre-tax earnings were reduced by $38.5 million due to this write off of acquired
in-process research and development ("IPR&D") and related expenses.  This charge
reduced  our  diluted  earnings  per share by $0.61 for fiscal  year  2004.  The
acquisition  of these  licenses  is a key  component  of our  strategic  plan to
commercialize  technologies  from  multiple  providers and at higher fee sharing
percentages to us than we have currently.

Our  financial  results  also  benefited  from strong  soybean  seed sales and a
substantial  improvement in our international  business over 2003.  Soybean seed
sales for 2004 increased almost 25% over 2003 due to improved product  offerings
as well as an increase in soybean  plantings in 2004.  Results of operations for
the  International  segment almost tripled over 2003 due to an approximately 30%
increase in sales. In particular,  sales in Australia, Brazil, Colombia, Mexico,
South  Africa  and  Turkey  increased  significantly  over  2003.  Cotton  fiber
commodity  prices were  generally  higher during  planting in 2004 than in 2003.
This  resulted  in  increased  cotton  plantings  in many  of our  international
markets. In addition,  improved product offerings,  price increases, and further
penetration  of  transgenic  products led to the  improvement  in  international
results.

Production  costs related to our  cottonseed  sales were higher this year due to
higher raw materials  costs and freight related to sourcing seed production from
the western United States and, in some cases,  Australia.  In addition,  cost of
sales  increased due to an increase in the  provisions  for obsolete  inventory.
Normally,  a higher  percentage of products are produced in the  Mid-South,  but
inclement  weather  destroyed most of the 2003 Mid-South  cottonseed  production
prompting  us to shift  some  production  to other  areas  for  this  year.  The
increased  cottonseed  costs  partially  offset  the effect of our  increase  in
cottonseed selling prices.

Strategic Transactions and Events

On August 24, 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. Once the licensed traits are commercialized, we will receive 70% of
the net licensing revenues  generated from these products.  The first product to
be commercialized  under the agreements is expected to be VipCot, a novel insect
control trait. Depending on the timing of regulatory approval, we expect to have
a limited  quantity of seed available for sale as early as 2006.  This agreement
not only provides us with greater share of licensing revenue than we have today,
but also more  control  of  development  and  commercialization  decisions  with
respect to the products.  Syngenta will be responsible for obtaining  regulatory
approval of these  products in the U.S.  and, if  instructed  by D&PL,  in other
countries.  We will bear the cost of  developing  new varieties  containing  the
Syngenta  traits and expect to incur  expenses  of  approximately  $3.5  million
related to this in 2005.  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.  On October 4,  2004,  DAS  announced  it had  received  full EPA
registration for its WideStrike 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 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 then 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  pursue  our  litigation  against  Monsanto  Company  and
Pharmacia. On October 13, 2004, we announced that the Circuit Court of the First
Judicial  District of Bolivar County,  Mississippi  (the "Court") had issued two
new orders.  In the first order,  which related to our damage claims,  the Court
granted Monsanto's motion for partial summary judgment relating to our claim for
expectation or "benefit of the bargain"  damages.  This ruling reversed a ruling
by the previous trial judge in the case, who had ruled that the use of a benefit
of the  bargain  damages  measurement  was a matter for the jury to  decide.  We
intend to seek an interlocutory review of this ruling by the Mississippi Supreme
Court. Our experts have calculated  damages using several methods,  two of which
result in damage  estimates of several hundred million dollars to over a billion
dollars.  Benefit of the bargin  damages  was one of those  methods.  The second
order related to  Monsanto's  counterclaims  in the case.  The Court granted our
motion to compel the production of documents and testimony of witnesses relating
to Monsanto's  counterclaims.  Monsanto had invoked privilege as a basis for not
producing  documents and for not  permitting  its witnesses to answer  questions
during depositions. D&PL has also sought interlocutory review by the Mississippi
Supreme Court of a September 10, 2004,  discovery  ruling  relating to documents
that  Monsanto  claimed to be privileged  that the original  trial judge ordered
Monsanto to produce and that the new trial judge ordered D&PL to return. At this
point,  we do not expect the trial to occur in 2005. See Part I, Item 3 for more
information.

On  May  20,  2004,  Monsanto  submitted  to  arbitration  before  the  American
Arbitration  Association  two  matters  which  had  been  in  a  formal  dispute
resolution  process before a panel of senior executives since July, 2003. In the
arbitration filing,  Monsanto is seeking an adjudication of its alleged right to
terminate  the  Bollgard  and Roundup  Ready  Licenses  between  our  companies,
monetary damages,  as well as other items. We have responded to this arbitration
filing and denied Monsanto's claims. In addition, we have asserted counterclaims
based on issues that we had submitted to the panel of senior executives.  We are
committed to  participating  in good faith resolution of these items through the
arbitration process. 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) our ability to continue to profitably  expand
our international  operations,  (c) the successful development and launch of the
Syngenta  insect  resistance  technology  and (d) 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 2005 earnings  guidance
later this year. The commodity  prices of cotton,  soybeans,  and corn have been
depressed  recently due to high production from the 2004 crop and other factors.
The  current  prices of  soybeans  and corn are at levels  that may result in an
increase  in cotton  plantings  in the U.S.  in 2005 over 2004.  However,  other
factors  must be  considered  and we  believe it is too early to  estimate  2005
cotton  plantings at this time. We expect to have  adequate  supplies of seed of
most of our popular cotton varieties for 2005 plantings due to favorable weather
conditions in the Mid-South  seed  production  areas 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 2005 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 2004,  operating
results  improved   significantly   due  to  increased  sales  in  most  of  our
international locations.  Depending on the prices of cotton fiber at the time of
plantings,  we expect acreage in many of our  international  locations to remain
constant  with 2004.  In  addition,  we have  already seen an increase in cotton
acreage in Australia due to an increase in rains where drought  conditions  have
existed  for  several  years.  We also  expect  to see  further  penetration  of
transgenic  products  containing  Monsanto's  Bollgard,  Bollgard II and Roundup
Ready technologies in 2005. In Australia,  regulatory  authorities have approved
Monsanto's  Bollgard II and increased the area on which it may be planted versus
Monsanto's original Bollgard product. In addition, we expect further penetration
of transgenics in Colombia where they have only recently been approved for large
scale  planting.  We  are  already  seeing  improvements  in our  businesses  in
Australia (due to introduction of Bollgard II and increased  acreage) and Brazil
(due to  further  penetration  of our  products).  However,  it is too  early to
accurately  forecast  International  results for 2005 as plantings  have not yet
occurred in most markets.  We will continue to develop new businesses in markets
such as India and  portions  of Africa.  We recently  have formed a  subsidiary,
Deltapine  India Seed Private  Ltd.,  to further our business  activities  in
India.

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

Our Board of  Directors  approved a common  stock  repurchase  plan of up to $50
million in 2000. As of October 31, 2004, D&PL had repurchased  1,553,200  shares
at an  aggregate  purchase  price of $29.6  million  under the current  purchase
program.  We expect to continue  purchasing  shares  under this plan in the open
market  subject  to  market  price  and  other  considerations.  Currently,  the
quarterly  dividend  is $0.12 per  share.  The Board of  Directors  reviews  the
dividend  policy  quarterly.  Assuming the dividend rate is  maintained  through
2005,  the  aggregate  payments will be $18.5 million to the holders of the 38.5
million  common  shares  outstanding  and $0.5  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.

Net Sales and Licensing Fees

In 2004, our consolidated net sales and licensing fees increased 10.7% to $314.9
million from 2003 sales of $284.5 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.

In 2003, our  consolidated net sales and licensing fees increased 9.4% to $284.5
million  from 2002 sales of $260.0  million.  This  increase was  primarily  the
result of (a) an increase in sales of stacked  gene  products,  for which higher
technology  licensing fees are charged,  (b) an increase in the selling price of
our seed and the introduction of higher-priced  cottonseed varieties,  primarily
DP 555  BG/RR,  and (c) an  increase  in soybean  seed  sales,  which  increased
approximately  26% in 2003 from 2002. In 2003,  domestic  transgenic  cottonseed
sales  comprised  approximately  96% of total domestic unit sales of cottonseed,
compared to  approximately  93% in 2002.  Offsetting  these increases were lower
international  sales  and  higher  sales  rebates  associated  with  distributor
payments, crop destruct and crop replant programs. The decrease in international
sales was mainly  attributable  to a decrease  in sales at our joint  venture in
Brazil (due to the  devaluation  of the  Brazilian  Real),  a decrease in export
sales to Greece (due to high  inventory  levels at our  distributor),  and lower
sales in Australia (due to the severe drought conditions), offset by an increase
in sales at our joint ventures in China.

<PAGE>

Gross Profit

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 was consistent with the prior year at
35%. The revenue increase attributable to the adoption of higher priced products
was 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.

Our  consolidated  gross profit  increased to $100.7 million in 2003 compared to
$90.8 million in 2002. Consolidated gross profit as a percentage of consolidated
net sales and licensing fees was flat with 2002 at 35%. Price  increases and the
introduction of higher priced  varieties were partially offset by an increase in
cottonseed  cost caused by higher raw  materials  costs and  freight  related to
sourcing seed production from the western United States and Australia.

Operating Expenses

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 for legal
matters and Sarbanes-Oxley compliance.

Operating  expenses  increased  to $44.0  million in 2003 from $40.3  million in
2002.  Operating  expenses for 2003  included  special  charges of $1.0 million.
Excluding the special  charges  recorded in 2003, this increase is primarily due
to increased  compensation,  pension and payroll related costs, higher insurance
premiums and professional fees.

Research and Development Expenses

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
positions and increased testing program expenses.

Research and development  expenses were virtually  unchanged from the prior year
at $16.7  million in 2003  compared to $16.4  million in 2002.  The increase was
primarily  attributable  to increased  international  research  and  development
activities.

In  the  Consolidated   Statements  of  Income,  certain  expenses  historically
classified  as  Research  and  Development  in  Operating   Expenses  have  been
reclassified  as Cost of Sales.  The 2004  expenses as well as the prior  years'
have  been  reclassified  for  consistency.   The  expenses  relate  to  certain
activities  performed  by the  Technical  Services  department.  As the sales of
transgenic  varieties  have  increased  as a  percentage  of our Net  Sales  and
Licensing  Fees  over  the  past  several  years,   certain  technical  services
department  activities  have become more related to preparing seed for sale than
to Research and Development  activities.  The activities for which expenses have
been  reclassified  relate primarily to the increase of seed quantities to allow
us to offer certain varieties commercially and to late-stage trials performed to
ensure  that  varieties  that have been chosen to be offered  commercially  meet
agronomic and transgenic  requirements of our third-party  technology  licenses.
The amount of expenses  reclassified  for 2004,  2003 and 2002 was $1.8 million,
$1.6 million and $1.7 million, respectively.

Selling Expenses

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.

Selling  expenses  increased 3.8% to $11.0 million in 2003 from $10.6 million in
2002.  This increase was primarily  attributable  to an increase in  advertising
expenditures related to the introduction of new varieties.

General and Administrative Expenses

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  incurred,  mainly due to legal  matters  and  Sarbanes-Oxley
compliance.

General and  administrative  expenses  increased  15.8% to $15.4 million in 2003
from  $13.3  million in 2002.  The  increase  mainly  related  to  increases  in
compensation  and pension costs, as well as an increase in legal fees related to
licensing activities.
<PAGE>
Special Charges

There were no special charges recorded in 2004 or 2002.

In 2003, we recorded a $0.6 million charge  associated with additional  expenses
for the closing of our  Chandler,  Arizona plant and the closing of our facility
in Centre,  Alabama and a $0.4 million charge  associated with reductions in the
number of employees at our wholly-owned subsidiary in Australia and at our joint
venture in Hebei Province,  People's Republic of China.

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 $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 earnings during 2004.

Net interest income decreased to $1.1 million in 2003,  compared to net interest
income of $1.2 million in 2002.  In 2003,  interest  income was $1.5 million and
interest  expense was $0.4  million.  Lower  interest  rates  earned on our cash
balances resulted in lower interest earnings during 2003. International interest
expense decreased primarily due to a decrease in interest rates incurred on debt
at our joint venture in Argentina.

Other Income/Expense

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.

Other expense  increased to $12.2  million in 2003,  compared to $7.2 million in
2002.  This  increase is  primarily  attributable  to increased  legal  expenses
related to our suit against  Pharmacia and Monsanto  partially offset by foreign
exchange  income in 2003.  In 2003,  we  incurred  $13.0  million,  or $0.21 per
diluted share, related to  Monsanto/Pharmacia  litigation expenses,  compared to
$4.7 million, or $0.08 per diluted share, in 2002.

Net Income and Earnings Per Share

Net income  applicable  to common shares was $4.8 million,  $27.5  million,  and
$30.1  million  in 2004,  2003 and  2002,  respectively.  Net  income  per share
(diluted) was $0.13, $0.70 and $0.76 in 2004, 2003 and 2002, respectively.

OFF-BALANCE SHEET ARRANGEMENTS

We do not currently utilize off-balance sheet arrangements.

<PAGE>

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>              <C>           <C>          <C>           <C>        <C>          <C>
                                                          Payments Due in Fiscal Year Ending August 31,
                                  ------------------------------------------------------------------------------------------

                                      Total          2005           2006         2007          2008       2009       2010
                                                                                                                      and
                                                                                                                     beyond
                                  ------------    -----------    ----------    ----------    ---------  ---------  ---------

Long-Term Obligations (1)          $   23,500      $   5,800      $ 10,150      $  5,950      $ 1,600    $     -    $     -
Operating Lease Obligations               552            187           125            80           82         78          -
Purchase Obligations (2)                  609            609             -             -            -          -          -
                                  ------------    -----------    ----------    ----------    ---------  ---------  ---------
Total                              $   24,661      $   6,596      $ 10,275      $  6,030      $ 1,682    $    78    $     -
                                  ============    ===========    ==========    ==========    =========  =========  =========

(1)  See "Acquired  In-Process Research and Development"  located in this Item 7
     for information concerning  non-contingent payments related to the Syngenta
     transaction.

(2)  The  amount  reported  as  "Purchase   Obligations"  for  2005  relates  to
     guaranteed  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
     the 2005 fiscal year for sales in that fiscal year.  At August 31, 2004, 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 will occur in the first and second quarters of our 2005 fiscal year)
     and is tested for quality.
</TABLE>

APPLICATION OF CRITICAL ACCOUNTING POLICIES

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 our Annual Report on Form
10-K for the  fiscal  year ended  August  31,  2004.  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 and Roundup Ready  licensing fees are recognized when the
seed is  shipped.  Domestically,  the  licensing  fees  charged to  farmers  for
Bollgard 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.  Effective this year,  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 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 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 Item 8 for
further details about inventory reserves.

Deferred Income Taxes

Deferred income taxes are estimated based upon temporary differences between the
income and losses  that we report in our  financial  statements  and our taxable
income and losses 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 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, 2004, we
had recorded net deferred tax assets of  approximately  $17.4 million  primarily
related to  capitalizing  the licenses  from  Syngenta 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, 2004.

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.

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,
primarily over the next three years. 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 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: 2005 - $3,500,000;  2006 - $4,000,000;
2007  -  $4,000,000;  2008  -  $2,000,000.  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  event in 2007,  prior to the
planting  season,  and for the  selected  Cry1Ab  event  in  2008,  prior to the
planting season. If the regulatory approval process proceeds as expected, we may
begin  limited  introduction  of the VIP3A event in 2006 and the Cry1Ab event 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 licensing  fees on
Bollgard and Roundup Ready 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 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, in fiscal years 2004, 2003 and 2002, we
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.  Potential  uses of our cash 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.  Another  potential use is the  repurchase in the open
market of our shares  pursuant  to our  previously  announced  share  repurchase
program.  We are currently  considering  other  potential  uses of the remaining
cash,  including  increasing  the  dividend  rate or  repurchasing  shares  more
aggressively  depending on market considerations and other factors. As a part of
this analysis,  we are evaluating the Company's  liquidity needs and its capital
structure.

In April 1998, we entered into a syndicated  credit facility with three lenders,
which provided for aggregate borrowings of $110 million.  This agreement expired
on April 1, 2001. We have had discussions with several potential lenders about a
replacement facility.

Capital expenditures were $6.0 million, $8.3 million, and $8.4 million in fiscal
2004, 2003 and 2002, respectively.  We anticipate that capital expenditures will
approximate $8.0 to $10.0 million in 2005.

Annual dividends of $0.46, $0.27 and $0.20 per share were paid in 2004, 2003 and
2002,  respectively.  Aggregate dividends paid on common and preferred shares in
2004,  2003 and  2002  were  $18.1  million,  $10.6  million  and $7.9  million,
respectively.  On July 14, 2004,  we announced  that our Board of Directors  had
declared a $0.12 per share dividend for the fourth  quarter.  The fourth quarter
dividend,  payable to  shareholders  of record on August 31,  2004,  was paid on
September 14, 2004. In the first quarter of fiscal 2005,  the Board of Directors
authorized  a quarterly  dividend of $0.12 per share to be paid on December  14,
2004, to shareholders of record on November 30, 2004. The Board anticipates that
quarterly  dividends of $0.12 per share will  continue to be paid in the future;
however,  the  Board of  Directors  reviews  this  policy  quarterly.  Aggregate
preferred and common stock dividends should approximate $19.0 million in 2005.

In February 2000, the Board of Directors authorized a program for the repurchase
of up to $50  million of our common  stock.  The shares  repurchased  under this
program are to be used to provide for option exercises, conversion of our Series
M  Convertible  Non-Voting  Preferred  shares  and for other  general  corporate
purposes.  At  August  31,  2004,  we had  repurchased  1,553,200  shares  at an
aggregate  purchase  price of  approximately  $29.6  million under this program.
During the year  ended  August  31,  2004,  we  purchased  250,200  shares at an
aggregate  purchase  price of $5.8 million  under this plan.  During the quarter
ended August 31, 2004, we purchased 107,200 shares at an aggregate price of $2.3
million.

Cash provided from  operations,  cash on hand, early payments from customers and
borrowings  under a loan agreement,  if necessary,  should be sufficient to meet
the Company's 2005 working capital needs.

RISKS AND UNCERTAINTIES

From time to time, we may publish  forward-looking  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.  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 filing and the
following:

     Demand for our seed will be affected by  government  programs  and policies
     and by weather. 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. These factors,  along with weather,  influence the cost and
     availability of seed for subsequent  seasons.  Weather impacts crop yields,
     commodity  prices and the planting  decisions  that farmers make  regarding
     both original planting commitments and, when necessary, replanting levels.

     The  planting  seed market is highly  competitive,  and our  products  face
     competition  from  a  number  of  seed  companies,   diversified   chemical
     companies,  agricultural biotechnology companies, governmental agencies and
     academic   and   scientific   institutions.   A  number  of  chemical   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  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.  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  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.

     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. 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 2004,  approximately 94% of our cottonseed that was sold
     in the United States  contained  either or both of Monsanto's  Bollgard and
     Roundup  Ready  gene  technologies,  and  95% 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.

     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.

     Overall  profitability  will depend on the  factors  noted above as well as
     weather  conditions,  government  policies in all  countries  where we sell
     products  and  operate,   worldwide   commodity  prices,   our  ability  to
     successfully  open new  international  markets,  our ability to develop 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, 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

None

<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  commodity  price risk.  During the year ended August 31,  2004,  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 Item 8.  Further  information  on our  exposure to market risk is
included in Note 14 of the Notes to Consolidated Financial Statements in Item 8.

The fair value of derivative commodity instruments  outstanding as of August 31,
2004, was $94,000. A 10% adverse change in the underlying  commodity prices upon
which  these  contracts  are based  would  result  in a  $40,000  loss in future
earnings (not counting the gain on the underlying commodities).

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,
2004,  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, 2004,  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

<TABLE>
<S>                                                                                                        <C>
                                      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:

      Report of Independent Registered Public Accounting Firm.............................................29

      Management's Report.................................................................................30

      Consolidated Statements of Income - for each of the three years in the
          period ended August 31, 2004....................................................................31

      Consolidated Balance Sheets - August 31, 2004 and 2003..............................................32

      Consolidated Statements of Cash Flows - for each of the three years in the
         period ended August 31, 2004.....................................................................33

      Consolidated Statements of Stockholders' Equity and Comprehensive Income
         - for each of the three years in the period ended August 31, 2004................................34

      Notes to Consolidated Financial Statements..........................................................35
</TABLE>

<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, 2004 and 2003, and
the  related  consolidated  statements  of  income,   stockholders'  equity  and
comprehensive  income,  and cash  flows for each of the years in the  three-year
period ended August 31, 2004. 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,  2004 and 2003,  and the results of
their  operations  and their cash flows for each of the years in the  three-year
period  ended  August 31,  2004,  in  conformity  with U.S.  generally  accepted
accounting principles.

/s/ KPMG LLP

Memphis, Tennessee
October 25, 2004

<PAGE>

MANAGEMENT'S REPORT:
--------------------

D&PL  is  responsible  for  preparing  the  financial   statements  and  related
information  appearing in this report.  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>

<TABLE>
<S>                                                                     <C>                     <C>                 <C>

                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                         FOR THE YEARS ENDED AUGUST 31,
                    (In thousands, except per share amounts)
                                                                               2004                 2003                 2002
                                                                         ------------------   -----------------    -----------------

NET SALES AND LICENSING FEES                                             $        314,871     $        284,487     $        260,041
COST OF SALES                                                                    (205,863)            (183,820)            (169,209)
                                                                         ------------------   -----------------    -----------------
GROSS PROFIT                                                                      109,008              100,667               90,832
                                                                         ------------------   -----------------    -----------------
OPERATING EXPENSES:
   Research and development                                                        18,436               16,669               16,405
   Selling                                                                         11,693               10,971               10,591
   General and administrative                                                      18,787               15,358               13,286
   Special charges                                                                      -                  962                    -
   In-process research and development and related transaction costs               38,532                    -                    -
                                                                         ------------------   -----------------    -----------------
                Total operating expenses                                           87,448               43,960               40,282
                                                                         ------------------   -----------------    -----------------

OPERATING INCOME                                                                   21,560               56,707               50,550
INTEREST INCOME, NET                                                                1,522                1,100                1,247
OTHER EXPENSE                                                                     (10,518)             (12,178)              (7,188)
EQUITY IN NET LOSS OF AFFILIATE                                                    (3,551)              (1,977)                (305)
MINORITY INTEREST IN (EARNINGS) / LOSS OF SUBSIDIARIES                             (2,303)              (1,104)               2,729
                                                                         ------------------   -----------------    -----------------
INCOME BEFORE INCOME TAXES                                                          6,710               42,548               47,033
PROVISION FOR INCOME TAXES                                                         (1,394)             (14,743)             (16,694)
                                                                         ------------------   -----------------    -----------------
NET INCOME                                                                          5,316               27,805               30,339
DIVIDENDS ON PREFERRED STOCK                                                         (491)                (288)                (213)
                                                                         ------------------   -----------------    -----------------
NET INCOME APPLICABLE TO COMMON SHARES                                   $          4,825     $         27,517     $         30,126
                                                                         ==================   =================    =================
BASIC EARNINGS PER SHARE                                                 $           0.13     $           0.72     $           0.79
                                                                         ==================   =================    =================
WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - BASIC                                          38,250               38,113               38,362
                                                                         ==================   =================    =================
DILUTED EARNINGS PER SHARE                                               $           0.13     $           0.70     $           0.76
                                                                         ==================   =================    =================
WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - DILUTED                                        39,670               39,594               39,781
                                                                         ==================   =================    =================

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


<PAGE>


<TABLE>
<S>                                                                                <C>                   <C>

                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                AS OF AUGUST 31,
                    (In thousands, except share and per share amounts)
                                                                                        2004                2003

                                                                                  -----------------   ------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                         $        149,587    $        143,285
Receivables, net                                                                           184,759             166,952
Inventories                                                                                 30,151              32,231
Prepaid expenses                                                                             1,923               2,116
Deferred income taxes                                                                        9,055              10,677
                                                                                  -----------------   ------------------
    Total current assets                                                                   375,475             355,261

PROPERTY, PLANT AND EQUIPMENT, NET                                                          61,988              64,441
EXCESS OF COST OVER NET ASSETS OF BUSINESSES ACQUIRED                                        4,183               4,183
INTANGIBLES, net of accumulated amortization of $1,969 and $1,597                            5,471               5,470
INVESTMENT IN AFFILIATE                                                                          -                 328
OTHER ASSETS                                                                                 1,594               1,869
DEFERRED INCOME TAXES                                                                        8,312                   -
                                                                                  -----------------   ------------------
TOTAL ASSETS                                                                      $        457,023    $        431,552
                                                                                  =================   ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES :
Notes payable                                                                     $          5,639    $             40
Accounts payable                                                                            23,784              17,966
Accrued expenses                                                                           187,890             176,150
Income taxes payable                                                                         8,912               9,894
                                                                                  -----------------   ------------------
     Total current liabilities                                                             226,225             204,050
                                                                                  -----------------   ------------------
LONG-TERM DEBT                                                                              16,486               1,557
                                                                                  -----------------   ------------------
DEFERRED INCOME TAXES                                                                            -               5,220
                                                                                  -----------------   ------------------
MINORITY INTEREST IN SUBSIDIARIES                                                            4,586               3,618
                                                                                  -----------------   ------------------
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;
          40,162,820 and 39,525,116 shares issued;
          38,495,354 and 38,107,850 shares outstanding                                       4,016               3,953
Capital in excess of par value                                                              64,250              54,850
Retained earnings                                                                          176,808             189,610
Accumulated other comprehensive loss                                                        (3,736)             (5,442)
Treasury stock, at cost; 1,667,466 and 1,417,266 shares                                    (31,719)            (25,971)
                                                                                  -----------------   ------------------
TOTAL STOCKHOLDERS' EQUITY                                                                 209,726             217,107
                                                                                  -----------------   ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $        457,023    $        431,552
                                                                                  =================   ==================

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

</TABLE>

<PAGE>

<TABLE>
<S>                                                                             <C>              <C>                     <C>

                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED AUGUST 31,
                                 (in thousands)
                                                                               2004                  2003                 2002
                                                                         ------------------   -----------------    -----------------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                            $          5,316     $         27,805     $         30,339
   Adjustments to reconcile net income to net cash provided by operating
      activities:
       Depreciation and amortization                                                8,364                7,759                6,815
       Loss (gain) on sale of assets                                                  189                  (34)                 910
       Noncash component of in-process research and development                    22,125                    -                    -
       Equity in net loss of affiliate                                              3,551                1,977                  305
       Foreign exchange loss (gain)                                                   124                 (748)               2,476
       Minority interest in earnings (loss) of subsidiaries                         2,303                1,104               (2,729)
       Change in deferred income taxes                                            (12,294)               3,315               (3,061)
       Changes in assets and liabilities:
              Receivables                                                         (17,693)             (20,804)              31,198
              Inventories                                                           1,921                7,849               (4,048)
              Prepaid expenses                                                        178                  144                  (21)
              Intangibles and other assets                                            (95)                (133)                (115)
              Accounts payable                                                      5,571                2,241                1,616
              Accrued expenses                                                     12,438               30,114              (34,443)
              Income taxes                                                          3,788               (1,557)              (2,956)
                                                                         ------------------   -----------------    -----------------
              Net cash provided by operating activities                            35,786               59,032               26,286
                                                                         ------------------   -----------------    -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                              (6,049)              (8,298)              (8,384)
  Sale of investments and property                                                    161                   79                  411
  Investment in affiliate                                                          (2,630)              (1,610)              (1,000)
  Purchase of minority interest in subsidiary                                           -                    -               (4,838)
                                                                         ------------------   -----------------    -----------------
              Net cash used in investing activities                                (8,518)              (9,829)             (13,811)
                                                                         ------------------   -----------------    -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments of short-term debt                                                        (277)              (2,109)              (3,173)
  Payments of long-term debt                                                       (1,607)                   -                  (73)
  Dividends paid                                                                  (18,118)             (10,576)              (7,881)
  Proceeds from long-term debt                                                          -                    -                  978
  Proceeds from short-term debt                                                       245                  467                3,044
  Minority interest in dividends paid by subsidiaries                              (1,336)                   -                 (446)
  Payments to acquire treasury stock                                               (5,748)              (6,135)              (9,960)
  Proceeds from exercise of stock options                                           6,004                2,484                2,527
                                                                         ------------------   -----------------    -----------------
              Net cash used in financing activities                               (20,837)             (15,869)             (14,984)
                                                                         ------------------   -----------------    -----------------
EFFECTS OF FOREIGN CURRENCY EXCHANGE RATES                                           (129)                 860               (2,403)
                                                                         ------------------   -----------------    -----------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                6,302               34,194               (4,912)
CASH AND CASH EQUIVALENTS, beginning of year                                      143,285              109,091              114,003
                                                                         ------------------   -----------------    -----------------
CASH AND CASH EQUIVALENTS, end of year                                   $        149,587     $        143,285     $        109,091
                                                                         ==================   =================    =================

SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid during the year for:
      Interest, net of capitalized interest                              $             10     $             61     $            880
      Income taxes                                                       $          8,904     $         13,399     $         21,077
  Noncash operating activities:
      Deferred taxes resulting from change in minimum pension liability  $            339     $            678     $          1,080
   Noncash financing activities:
      Tax benefit of stock option exercises                              $          3,459     $            825     $            650

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


<PAGE>

<TABLE>
<S>                                     <C>           <C>         <C>             <C>      <C>             <C>             <C>

                           DELTA AND PINE LAND COMPANY
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
               FOR THE YEARS ENDED AUGUST 31, 2002, 2003 AND 2004
                      (In thousands, except per share data)

                                                                                           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, 2001           $       107  $      3,911  $    48,406  $  149,923  $       (4,063) $    (9,876) $    188,408
                                                                                                                      ------------
Net income                                     -             -            -      30,339               -            -        30,339
Minimum pension liability adjustment, net of
   tax of $1.08 million                        -             -            -           -          (1,787)           -        (1,787)
Foreign currency translation adjustment        -             -            -           -            (183)           -          (183)
Unrealized gain on hedging  instruments        -             -            -           -              94            -            94
                                                                                                                      ------------
      Total comprehensive income                                                                                            28,463
                                                                                                                      ------------
Exercise of stock options and tax benefit
   of stock option exercises                   -            20        3,157           -               -            -         3,177
Cash dividends, $0.20 per share                -             -            -       (7,881)             -            -        (7,881)
Purchase of common stock                       -             -            -            -              -       (9,960)       (9,960)
                                     ------------ ------------- ------------ ----------- --------------- ------------ ------------
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 loss 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
                                     ============ ============= ============ =========== =============== ============ ============


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

</TABLE>


<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

In  the  2004  consolidated  income  statement,  certain  expenses  historically
classified  as  Research  and  Development  in  Operating   Expenses  have  been
reclassified as Cost of Sales. These expenses for the prior years have also been
reclassified  for  consistency.   The  expenses  relate  to  certain  activities
performed  by the  Technical  Services  department.  As the sales of  transgenic
varieties  have  increased as a percentage of our Net Sales and  Licensing  Fees
over the past several years,  certain technical services  department  activities
have  become  more  related  to  preparing  seed for sale than to  Research  and
Development activities. The activities for which expenses have been reclassified
relate primarily to the increase of seed quantities to allow us to offer certain
varieties  commercially  and to  late-stage  trials  performed  to  ensure  that
varieties  that have been chosen to be offered  commercially  meet agronomic and
transgenic  requirements of our third-party  technology licenses.  The amount of
expenses  reclassified  for 2004, 2003 and 2002 was  $1,803,000,  $1,626,000 and
$1,717,000, respectively.

Also in 2004, certain shipping expenses  historically  classified as a reduction
to Net Sales and Licensing Fees have been  reclassified as Cost of Sales.  These
expenses primarily relate to costs incurred to ship finished goods to customers.
The amount of  expenses  reclassified  for 2004,  2003 and 2002 was  $3,104,000,
$3,211,000 and $2,234,000, respectively.

In addition,  certain other prior year amounts have been reclassified to conform
with the 2004 presentation.

Special Charges/Unusual Items

2003
----

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.

<PAGE>

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.

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. Excess of cost over net assets of businesses acquired was amortized
using the  straight-line  method over 40 years,  until  September 1, 2001,  when
amortization was  discontinued as required by Statement of Financial  Accounting
Standards ("SFAS") No. 141.

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,  which includes cash,  accounts
receivables,  derivatives and accounts payable,  at August 31, 2004 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.

<PAGE>

Revenue Recognition

Revenues from domestic seed sales are recognized when seed is shipped.  Revenues
from Bollgard and Roundup Ready  licensing fees are recognized  when the seed is
shipped.  Domestically,  the licensing  fees charged to farmers for Bollgard 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 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. We
record  monthly  estimates to account for various sales  incentive  programs for
seed and  Monsanto's  Bollgard 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 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 plan and our disclosure of the assumptions underlying the pro
forma calculations below.

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>
                                                              2004                 2003                 2002
                                                        ------------------   -----------------    -----------------
Net income(in thousands):
  As reported                                           $          5,316     $         27,805     $         30,339
  Less: Total stock-based compensation expense
        determined under the fair value based method
        for all awards, net of related tax effects                (2,979)              (3,600)              (4,714)
                                                        ------------------   -----------------    -----------------
  Pro forma                                             $          2,337     $         24,205     $         25,625
                                                        ==================   =================    =================

Basic earnings per share:
  As reported                                           $           0.13     $           0.72     $           0.79
                                                        ==================   =================    =================
  Pro forma                                             $           0.05     $           0.63     $           0.66
                                                        ==================   =================    =================

Diluted earnings per share:
  As reported                                           $           0.13     $           0.70     $           0.76
                                                        ==================   =================    =================
  Pro forma                                             $           0.06     $           0.62     $           0.64
                                                        ==================   =================    =================
</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) 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 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 attributable
to the domestic  segment 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 test during the fourth quarter of 2004
and 2003, management determined that none of the goodwill recorded 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 and contingent liabilities.

Recently Issued Financial Accounting Standards

In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable Interest Entities - An Interpretation of ARB No. 51". In December 2003,
the FASB published a revision to Interpretation  No. 46 (46R) to clarify some of
the  provisions  of the original  Interpretation.  The Company does not have any
variable  interest entities and,  therefore,  the adoption of this statement did
not have a material impact on D&PL's consolidated  financial position or results
of operations.

Statement of Financial  Accounting  Standards  ("SFAS") No. 132 (Revised  2003),
"Employers'  Disclosures  about  Pensions  and Other  Postretirement  Benefits,"
requires  additional  annual  disclosures  about  pension plan  assets,  benefit
obligations,  cash flows,  benefit costs and related  information.  SFAS No. 132
(Revised 2003) also requires  companies to disclose  various elements of pension
and  postretirement  benefit costs in  interim-period  financial  statements for
quarters  beginning  after  December 15, 2003.  The required  additional  annual
disclosures are included in Note 10.

SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics
of Both  Liabilities  and  Equity,"  provides  guidance on how to  classify  and
measure certain financial  instruments with  characteristics of both liabilities
and equity.  This statement is effective for financial  instruments entered into
or modified  after May 31, 2003,  and otherwise is effective at the beginning of
the first  interim  period  beginning  after June 15,  2003.  D&PL  adopted this
statement  for  financial  instruments  entered  into  after  May 31,  2003  and
otherwise  adopted  this  statement  September  1, 2003.  The  adoption  of this
statement  did not have a  material  impact  on  D&PL's  consolidated  financial
position or results of operations.

<PAGE>

2.   INVENTORIES

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

                                           2004                   2003
                                     -------------------    -------------------

       Finished goods                $           24,867     $           21,476
       Raw materials                             14,333                 17,062
       Growing crops                              1,432                  1,199
       Supplies                                   1,040                    733
                                     -------------------    -------------------
                                                 41,672                 40,470
       Less reserves                            (11,521)                (8,239)
                                     -------------------    -------------------
                                     $           30,151     $           32,231
                                     ===================    ===================

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 excess and obsolete  inventory.  The provision recorded for excess and
obsolete  inventory  for the years  ended  August 31,  2004,  2003 and 2002 were
$12,299,000,  $7,478,000  and  $10,345,000,  respectively.  See  Note  14  for a
description of hedging activities.

3.   PROPERTY, PLANT AND EQUIPMENT

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

                                             2004                   2003
                                     -------------------    -------------------

       Land and improvements         $           5,981      $           5,124
       Buildings and improvements               42,228                 41,272
       Machinery and equipment                  59,125                 56,202
       Germplasm                                 7,500                  7,500
       Breeder and foundation seed               2,000                  2,000
       Construction in progress                  2,538                  5,464
                                     -------------------    -------------------
                                               119,372                117,562
       Less accumulated depreciation           (57,384)               (53,121)
                                     -------------------    -------------------
                                     $          61,988      $          64,441
                                     ===================    ===================

Depreciation expense was approximately $7,980,000,  $7,490,000 and $6,540,000 in
2004, 2003, and 2002, respectively.

4.    INTANGIBLES

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

<TABLE>
<S>                                                    <C>                                   <C>
                                                       2004                                  2003
                                        ------------------------------------  ------------------------------------
                                             Gross                                 Gross
                                           Carrying          Accumulated          Carrying          Accumulated
                                             Amount          Amortization          Amount           Amortization
                                        -----------------  -----------------  -----------------  -----------------
       Trademarks                       $          3,182   $           (879)  $          3,182   $           (800)
       Commercialization
         agreements                                  400                (93)               400                (65)
       Licenses                                    1,100                (83)             1,100                  -
       Patents                                       772                (97)               426                (84)
       Other                                       1,986               (817)             1,959               (648)
                                        -----------------  -----------------  -----------------  -----------------
                                        $          7,440   $         (1,969)  $          7,067   $         (1,597)
                                        =================  =================  =================  =================
</TABLE>

Amortization  expense for identifiable  intangible assets during the years ended
August 31,  2004,  2003,  and 2002 was  approximately  $380,000,  $270,000,  and
$280,000,  respectively.  Identifiable  intangible asset amortization expense is
estimated  to be $400,000 in each of the fiscal years from 2005 through 2008 and
$300,000 in 2009.

During the fourth  quarters  of fiscal  2004 and 2003,  "EXCESS OF COST OVER NET
ASSETS OF BUSINESS ACQUIRED"  ("goodwill")  attributable to the domestic segment
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 recorded was impaired.

5.     INVESTMENT IN AFFILIATE

D&PL owns a 50% interest in DeltaMax,  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, 2004, 2003 and 2002,  D&PL's equity in the
net loss of DeltaMax was $3,551,000, $1,977,000, and $305,000, respectively.

6.     NOTES PAYABLE AND LONG-TERM DEBT

The amounts reported in the  Consolidated  Balance Sheets as "Notes Payable" and
"Long-Term  Debt" at August 31,  2004  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):

                                              2004                   2003
                                       ------------------     ------------------
         Bollgard and Roundup Ready
         royalties and related expenses
            due to Monsanto               $   149,984            $   135,627
         Sales allowances                      12,281                 11,756
         Dividends                              4,619                  3,917
         Other accrued expenses                21,006                 24,850
                                       ------------------     ------------------
                                          $   187,890            $   176,150
                                       ==================     ==================

8.   INCOME TAXES

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

                            2004                   2003                2002
                     ------------------   ------------------   -----------------
         Current-
           Federal    $       12,078       $       10,891       $       18,380
           State               1,226                1,216                2,047
         Deferred-
           Federal           (10,232)               2,347               (3,282)
           State              (1,678)                 289                 (451)
                     ------------------   ------------------   -----------------
                      $        1,394       $       14,743       $       16,694
                     ==================   ==================   =================

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

<TABLE>
<S>                                                                         <C>                 <C>                  <C>
                                                                            2004                2003                 2002
                                                                      -----------------   ------------------   ------------------

        Statutory rate                                                           35.0%                35.0%                35.0%
        Increases (decreases) in tax resulting from:
           State taxes, net of federal tax benefit                               (4.4)                 2.3                  2.2
           Research and development tax credits                                  (9.3)                (1.1)                (1.1)
           Foreign activities and non-deductible costs                           (0.9)                (1.3)                (1.4)
           Other                                                                  0.4                 (0.2)                 0.8
                                                                      -----------------   ------------------   ------------------
        Effective rate                                                           20.8%                34.7%                35.5%
                                                                      =================   ==================   ==================
</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):

                                             2004                   2003
                                     -------------------    -------------------
    Deferred tax assets:
       Inventory                     $            4,048       $          5,635
       Litigation costs                           1,129                  1,387
       Pension                                      955                  1,080
       Capitalized licenses (Syngenta)           14,541                      -
       Other                                      3,327                  2,575
                                     -------------------    -------------------
                                     $           24,000     $           10,677
                                     ===================    ===================
    Deferred tax liabilities:
       Property and intangibles                  (3,615)                (3,923)
       Other                                     (3,018)                (1,297)
                                     -------------------    -------------------
                                                 (6,633)                (5,220)
                                     -------------------    -------------------
       Net deferred income taxes     $           17,367     $            5,457
                                     ===================    ===================

The Company  has  provided  for income  taxes on the  undistributed  earnings of
foreign subsidiaries as if they had been distributed in cases where the earnings
are not planned to be permanently reinvested outside the United States.

9.   LEASES

D&PL leases a portion of the real estate and machinery and equipment used in its
operations.  Substantially  all rent expense is recorded as cost of sales.  D&PL
does not have any capital  leases.  Future  minimum  rental  payments after 2004
under operating leases with initial or remaining  noncancellable terms in excess
of one year are as follows:

                        2005            $ 187,000
                        2006            $ 125,000
                        2007            $  80,000
                        2008            $  82,000
                        2009            $  78,000

Rent and lease expense approximated  $2,558,000,  $2,767,000,  and $2,704,000 in
2004, 2003 and 2002, respectively.

10.  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 $1 million to the Plan in 2005.

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 2005.

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, 2004,  and a statement  of the funded  status as of August 31,
2004 and 2003.
<PAGE>

<TABLE>
<S>                                                             <C>                                     <C>
                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2004                 2003                2004                 2003
                                                -----------------    -----------------   ------------------   ------------------
CHANGE IN BENEFIT OBLIGATIONS
Benefit obligation at beginning of year         $     16,848,000     $     13,393,000    $        616,000     $        570,000
     Service cost                                        832,000              638,000               9,000                8,000
     Interest cost                                       989,000              915,000              35,000               38,000
     Actuarial (gain) loss                              (121,000)           2,624,000              (4,000)              49,000
     Benefits paid                                      (682,000)            (722,000)            (49,000)             (49,000)
                                                -----------------    -----------------   ------------------   ------------------
Benefit obligation at end of year               $     17,866,000     $     16,848,000    $        607,000     $        616,000
                                                =================    =================   ==================   ==================

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year  $     10,188,000     $      7,761,000    $        362,000     $        380,000
     Actual return on plan assets                      1,101,000              721,000              27,000               32,000
     Company contributions                             2,700,000            2,500,000                   -                    -
     Benefits paid                                      (682,000)            (722,000)            (49,000)             (49,000)
     Expenses                                            (92,000)             (72,000)             (1,000)              (1,000)
                                                -----------------    -----------------   ------------------   ------------------
Fair value of plan assets at end of year        $     13,215,000     $     10,188,000    $        339,000     $        362,000
                                                =================    =================   ==================   ==================

Funded status                                   $     (4,651,000)    $     (6,660,000)   $       (268,000)    $       (254,000)
Unrecognized prior service cost                           36,000               40,000                   -                    -
Unrecognized net loss                                  5,781,000            6,461,000                   -               49,000
                                                -----------------    -----------------   ------------------   ------------------
Prepaid (accrued) pension cost                  $      1,166,000     $       (159,000)   $       (268,000)    $       (205,000)
                                                =================    =================   ==================   ==================
</TABLE>

<TABLE>
<S>                                                             <C>                                     <C>
                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2004                 2003                2004                 2003
                                                -----------------    -----------------   ------------------   ------------------
AMOUNTS REFLECTED IN THE BALANCE SHEET AT
AUGUST 31:
     Prepaid (accrued) benefit cost             $      1,166,000     $       (159,000)   $       (268,000)    $       (205,000)
     Minimum pension liability                        (3,809,000)          (4,657,000)                  -              (49,000)
     Accumulated other comprehensive loss              3,773,000            4,617,000                   -               49,000
     Intangible asset                                     36,000               40,000                   -                    -
                                                -----------------    -----------------   ------------------   ------------------
Net amount reflected                            $      1,166,000     $       (159,000)   $       (268,000)    $       (205,000)
                                                =================    =================   ==================   ==================
</TABLE>


The accumulated benefit obligation for the Plan was $15,858,000 and $15,004,000
in 2004 and 2003, respectively. The accumulated benefit obligation for the SERP
was $607,000 and $616,000 in 2004 and 2003, respectively.

Periodic Pension Expense:
<TABLE>
<S>                                             <C>                                          <C>
                                                  Plan                                       SERP
                                 ----------------------------------------- -----------------------------------------
                                    2004          2003           2002         2004           2003          2002
                                 ------------  ------------  ------------- ------------  -------------  ------------
Service cost                     $  832,000    $  638,000    $   646,000   $    9,000    $     8,000    $     7,000
Interest cost on projected benefit
  obligation                        989,000       915,000        841,000       35,000         38,000         37,000
Expected return on assets          (921,000)     (687,000)      (889,000)     (28,000)       (32,000)       (47,000)
Recognized loss                     472,000       263,000              -       50,000        186,000         10,000
Amortization of transitional
  obligation                              -             -         65,000            -              -              -
Amortization of prior service cost    3,000         3,000          4,000            -              -              -
                                 ------------  ------------  ------------- ------------  -------------  ------------
Net periodic pension
  expense                        $1,375,000    $1,132,000    $   667,000   $   66,000    $   200,000    $     7,000
                                 ============  ============  ============= ============  =============  ============
Company contributions            $2,700,000    $1,500,000    $ 1,600,000   $        -    $         -    $         -
                                 ============  ============  ============= ============  =============  ============
</TABLE>
<PAGE>

<TABLE>
<S>                                                             <C>                                      <C>
                                                                Plan                                      SERP
                                                --------------------------------------   ---------------------------------------
                                                      2004                 2003                2004                 2003
                                                -----------------    -----------------   ------------------   ------------------
Weighted-average assumptions used to determine
benefit obligations at August 31:
     Discount rate                                        6.25%                6.00%               6.25%                6.00%
     Rate of compensation increases                       4.00%                4.00%               4.00%                4.00%

Weighted-average assumptions used to determine
net periodic benefit cost for years ended
August 31:
     Discount rate                                        6.00%                7.00%               6.00%                7.00%
     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,
2004 and 2003 are as follows:

<TABLE>
<S>                                                             <C>                                     <C>
                                                              Plan                                       SERP
                                                --------------------------------------   ---------------------------------------
                                                      2004                 2003                2004                 2003
                                                -----------------    -----------------   ------------------   ------------------
 Asset Category
     Common stock                                             70%                  63%                 72%                  58%
     Preferred stock                                          18%                  23%                 27%                  41%
     Corporate bonds and debentures                            -                    2%                  -                    -
     Temporary investments                                    12%                  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 stock,  corporate bonds and debentures) and equities (including common
stock).  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, 2004 or 2003.

At August 31,  2004,  total  future  Plan and SERP  benefits  are  estimated  as
follows:

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

     2005                     $        676,000     $         63,000
     2006                              736,000               63,000
     2007                              750,000               63,000
     2008                              790,000               63,000
     2009                              850,000               63,000
     Years 2010-2014                 4,962,000              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 2004, 2003 or 2002.



<PAGE>


11.  MAJOR CUSTOMERS

In fiscal  2004,  2003 and 2002 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            2004                  2003                  2002
 ---------------  ------------------   -------------------   -------------------
      A                $38,820,000           $32,275,000           $29,368,000
      B                 66,156,000            57,580,000            47,176,000
      C                 55,388,000            55,438,000            57,057,000

12. 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.

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

<TABLE>
<S>                                          <C>                   <C>                   <C>
                                             2004                  2003                  2002
                                        ---------------       ---------------       ---------------
Net sales and licensing fees
     Domestic                           $      276,410        $      255,133        $      227,636
     International                              38,461                29,354                32,405
                                        ---------------       ---------------       ---------------
                                        $      314,871        $      284,487        $      260,041
                                        ===============       ===============       ===============

Net sales and licensing fees
     Cottonseed                         $      284,339        $      257,846        $      239,801
     Soybean seed                               26,951                21,670                17,136
     Other                                       3,581                 4,971                 3,104
                                        ---------------       ---------------       ---------------
                                        $      314,871        $      284,487        $      260,041
                                        ===============       ===============       ===============

Operating income
     Domestic                           $       17,199        $       55,170        $       44,906
     International                               4,361                 1,537                 5,644
                                        ---------------       ---------------       ---------------
                                        $       21,560        $       56,707        $       50,550
                                        ===============       ===============       ===============

Capital expenditures
     Domestic                           $        4,240        $        5,613        $        5,922
     International                               1,809                 2,685                 2,462
                                        ---------------       ---------------       ---------------
                                        $        6,049        $        8,298        $        8,384
                                        ===============       ===============       ===============

Depreciation and amortization
     Domestic                           $        6,762        $        6,559        $        6,095
     International                               1,602                 1,200                   720
                                        ---------------       ---------------       ---------------
                                        $        8,364        $        7,759        $        6,815
                                        ===============       ===============       ===============
</TABLE>



<PAGE>


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

                                             2004                  2003
                                        ---------------       ---------------
Long-term assets
    Domestic                            $      65,210         $     59,640
    International                              16,338               16,651
                                        ---------------       ---------------
                                        $      81,548         $     76,291
                                        ===============       ===============

Total assets
    Domestic                            $     428,444         $    403,976
    International                              28,579               27,576
                                        ---------------       ---------------
                                        $     457,023         $    431,552
                                        ===============       ===============

13.  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 2002, D&PL paid consulting
fees to  Stephens,  Inc. of  approximately  $306,000  relating  to the  DeltaMax
formation.

During  2004,  2003 and 2002,  a partner of two law firms (he  changed  firms in
October 2001) that  represented D&PL was also a stockholder and D&PL's corporate
secretary.  D&PL  paid  legal  fees to these  firms of  approximately  $929,000,
$633,000, and $628,000 in 2004, 2003 and 2002, respectively.

During 2002, the Institute of Molecular  Agrobiology ("IMA"),  which is owned by
the National  University  of Singapore and the National  Science and  Technology
Board of Singapore,  conducted contract research upon D&PL's instruction related
to the development of certain technologies for varietal crops such as cotton and
soybeans.  D&PL paid approximately  $249,000 in 2002 for such research projects.
Dr. Chua,  a member of the Board of  Directors of D&PL,  was the Chairman of the
Management  Board of Directors of IMA until  September 2000 and Deputy  Chairman
from that time until  September  2001 and was also  Chairman  of the Board of an
affiliate of IMA,  IMAGEN,  until August 2001.  IMAGEN,  together with Singapore
Bio-Innovations  Pte.  Ltd.,  STIC  Investments  Pte. Ltd., and OCBC Wearnes and
Walden Investments Pte. Ltd., own 20% of the stock of D&PL China Pte. Ltd.

During 2004 and 2003,  DeltaMax  paid Temasek Life  Science  Laboratory  ("TLL")
approximately  $1,118,000 and $811,000,  respectively,  for research  activities
Temasek  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 2005,  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).

14. DERIVATIVE FINANCIAL INSTRUMENTS

Other comprehensive loss includes the following related to the Company's soybean
hedging program for the years ended August 31, 2004 and 2003 (in thousands):

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

       Deferred net gain, beginning of year                                       $         262          $         304

             Net gains on hedging instruments arising during the year                        60                    463
             Reclassification adjustment of gains on hedging instruments to
                earnings                                                                   (456)                  (505)
                                                                               -------------------    -------------------
       Net change in accumulated other comprehensive loss                                  (396)                   (42)
                                                                               -------------------    -------------------
       Deferred net (loss) gain on derivative instruments included in other
             comprehensive loss at end of year                                     $       (134)         $         262
                                                                               ===================    ===================
</TABLE>

The net loss of $134,000  included in accumulated  other  comprehensive  loss at
August  31,  2004,  consists  of net  unrealized  losses  of  $175,000  and  net
unrealized  gains of $41,000,  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, 2004 and August 31, 2003,  D&PL recorded no gains
or losses in earnings as a result of hedge  ineffectiveness or discontinuance of
cash flow hedges.

15.   ACQUISITION OF D&M INTERNATIONAL, LLC
                                                               1
On May 28, 2002, D&M  International,  LLC redeemed  Pharmacia's  50% interest in
D&M  International,  LLC for  cash  of  approximately  $4.8  million.  D&PL  and
        1
Monsanto   formed D&M  International,  LLC in 1995 to introduce  cotton planting
seed in international  markets  combining  D&PL's acid delinting  technology and
elite germplasm and Monsanto's Bollgard and Roundup Ready gene technologies.  In
April 2002,  Pharmacia  activated a cross  purchase  provision in the  operating
agreement for D&M International, LLC and D&PL notified Pharmacia that it elected
to have D&M  International,  LLC redeem Pharmacia's 50% interest in the company.
As a result of the redemption of Pharmacia's interest,  D&PL now owns all of D&M
International, LLC.

The acquisition of the 50% interest in D&M International, LLC has been accounted
for as a purchase business  combination,  and the results of its operations have
been included in D&PL's  consolidated  statement of operations  from the date of
acquisition.  The allocation of the purchase price resulted in no goodwill.  Pro
forma  results  of  operations  for the  year  ended  August  31,  2002  had the
acquisition  occurred  at the  beginning  of the  period  would  not  have  been
materially different than reported results for the period.

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  over the next three years.  Under the  acquisition
agreement,  D&PL paid Syngenta  $14.1 million at closing during fiscal year 2004
and is required to pay Syngenta $5.8 million in fiscal year 2005, $10.15 million
in fiscal  year 2006,  $5.95  million in fiscal year 2007,  and $1.6  million in
fiscal year 2008.  Contingent payments of $1.6 million in fiscal year 2008, $3.1
million in fiscal year 2009,  $3.0 million in fiscal year 2010, and $1.5 million
in fiscal year 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, and then immediately
expensed in the Consolidated  Statement of Income,  as the technologies to which
we purchased licenses were in-process  research and development (IPR&D) projects
that had not yet reached technological feasibility and had no alternative future
use. The amount capitalized and then written off as IPR&D was $36,225,000.  This
amount is reported in the  Consolidated  Statement of Income  under  "In-process
research and development  and related  transaction  costs."  Payments to be made
after three and one-half years 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.

-----------------------------
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>


The present  value of the  amounts to be paid over the first three and  one-half
years was computed based on discount  rates that  approximated  borrowing  rates
that we 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 "Notes  Payable" under
Current  Liabilities.  The balance of the  remaining  payments due over the next
three and one-half years is reported as "Long-Term Debt."

17.   COMMITMENTS AND CONTINGENCIES

Product Liability Claims

D&PL is named as a  defendant  in various  lawsuits  that  allege,  among  other
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(R) and/or Roundup Ready(R) 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 and counterclaims to Monsanto's claims based on the issues
submitted  by D&PL  to the  Executive  Panel.  On  November  8,  2004,  Monsanto
submitted  one new  claim  allegedly  involving  a  dispute  under  the  license
agreements to the Executive  Panel.  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 July 2002,  Syngenta  Biotechnology,  Inc.  ("SBI")  brought suit in the U.S.
District  Court in Delaware  alleging  that D&PL's  making,  using,  selling and
offering to sell cotton planting seed containing Monsanto's  insect-resistant Bt
genes,  being sold  under the trade  name  Bollgard,  and  Monsanto's  herbicide
tolerance genes,  being sold under the trade name Roundup Ready,  infringed U.S.
Patent  6,051,757  entitled   "Regeneration  of  Plants  Containing  Genetically
Engineered  T-DNA".  This suit was dismissed  with prejudice by a Stipulation of
Dismissal filed February 20, 2004, with no material impact to D&PL.

In May  2002,  Pharmacia  Corporation  filed a suit in state  court in  Missouri
against D&PL International Technology Corp. ("DITC"), D&PL's subsidiary, seeking
a  declaratory  judgment  that it was  entitled  to invoke  the  cross  purchase
provision  in the  Operating  Agreement  for D&M  International,  LLC, a limited
liability  company  jointly  owned by  Pharmacia  and DITC.  In March 2004,  the
parties agreed to settle the matter  without  material  financial  impact to the
Company. An order of dismissal was entered on April 27, 2004.

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.  The  litigation  is currently in discovery  and
pretrial  proceedings.  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 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
$697,000 at October 31, 2004 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 vs. Monsanto Company and Pharmacia Corp.

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 a 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 against these counterclaims. 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.

Stock Option Plans

The 1993 Stock Option Plan authorized 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.  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.

<PAGE>

Additional  information  regarding options granted and outstanding is summarized
below:

Stock Options                           Number of
                                          Shares             Price Range
                                      --------------  --------------------------
Outstanding at August 31, 2001           4,055,960       $   4.67     $   49.31
Granted                                    682,496          17.85         20.47
Exercised                                 (200,338)          4.67         19.62
Lapsed or canceled                        (500,299)         16.91         49.31
                                      --------------
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
                                      ==============

The  weighted  average fair values of options  granted in fiscal 2004,  2003 and
2002 were $6.14,  $6.41, and $6.49 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:

                                 2004                2003               2002
                           --------------     ---------------    ---------------

Expected dividend yield              1%                  1%                 3%
Expected option lives           8 years             8 years            5 years
Expected volatility              16.01%              24.99%             33.52%
Risk-free interest rates          3.82%               3.07%              5.54%

The  following  table  summarizes  certain  information  about  outstanding  and
exercisable stock options at August 31, 2004:

<TABLE>
<S>                                     <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 15.71             241,388            1.3               $ 12.55            241,388          $ 12.55
  $ 16.91 to 28.04           3,004,585            5.3                 20.85          2,128,000            21.44
  $ 32.80 to 37.80              81,660            4.2                 35.90             81,660            35.90
  $ 41.69 to 47.31               2,000            3.7                 47.31              2,000            47.31
                          -------------                                            --------------
                             3,329,633                                               2,453,048
                          =============                                            ==============
</TABLE>

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 are to be used to provide  for option  exercises,  conversion  of D&PL's
Series M Convertible Non-Voting Preferred shares and for other general corporate
purposes.  At August  31,  2004,  D&PL had  repurchased  1,553,200  shares at an
aggregate purchase price of approximately  $29,600,000 under this program.  D&PL
purchased 250,200 shares at an aggregate purchase price of $5,748,000 under this
plan in the year ended August 31, 2004.
<PAGE>

Earnings Per Share

Dilutive  common share  equivalents  consist of both D&PL's Series M Convertible
Non-Voting  Preferred  Shares and  outstanding  stock  options under D&PL's 1993
Stock Option Plan and the 1995 Long-Term Incentive Plan.  Approximately 551,000,
1,117,000,  and  2,259,000  outstanding  stock  options were not included in the
computation  of diluted  earnings per share for the years ended August 31, 2004,
2003 and  2002,  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.  The table below reconciles the basic and diluted
per share computations:
<TABLE>
<S>                                                     <C>                <C>                  <C>

                                                           For the Twelve Months Ended August 31,
                                                          ---------------------------------------
                                                         2004                2003                2002
                                                   -----------------    ----------------    ---------------
Income(in thousands):
Net income                                         $         5,316      $      27,805       $      30,339
Less:  Preferred stock dividends                              (491)              (288)               (213)
                                                   -----------------    ---------------     ---------------
Net income for basic EPS                                     4,825             27,517              30,126
Effect of Dilutive Securities:
Convertible Preferred Stock Dividends                          491                288                 213
                                                   -----------------    ---------------     ---------------
Net income available to common stockholders
plus assumed conversions - for diluted EPS         $         5,316      $      27,805       $      30,339
                                                   =================    ===============     ===============
Shares(in thousands):
Basic EPS shares                                            38,250             38,113              38,362
Effect of Dilutive Securities:
Options to purchase common stock                               353                414                 352
Convertible preferred stock                                  1,067              1,067               1,067
                                                   -----------------    ---------------     ---------------
Diluted EPS shares                                          39,670             39,594              39,781
                                                   =================    ===============     ===============
Per Share Amounts:
Basic                                              $          0.13      $        0.72       $        0.79
                                                   =================    ===============     ===============
Diluted                                            $          0.13      $        0.70       $        0.76
                                                   =================    ===============     ===============
</TABLE>

Shares Outstanding

Additional information regarding shares outstanding is summarized below:

Common Shares                           Number of
                                         Shares
                                      --------------
Outstanding at August 31, 2001          38,543,267
Exercises of stock options                 200,338
Purchases of common stock                 (539,200)
                                      --------------
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
                                      ==============



<PAGE>


19.   UNAUDITED QUARTERLY FINANCIAL DATA

All of D&PL's domestic seed products  (including those  containing  Bollgard 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. We also offer various sales  incentive
programs for seed and  participate in such programs  related to the Bollgard 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.  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.  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:
<TABLE>
<S>                                                     <C>               <C>           <C>               <C>

(In thousands, except per share data)

--------------------------------------------------------------------------------------------------------------------
         Fiscal 2004: Three months ended
                                                         November 30    February 29       May 31         August 31
--------------------------------------------------------------------------------------------------------------------

         Net sales and licensing fees                      $ 13,845      $  88,276      $ 185,119         $  27,631
         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      $ 107,537      $ 168,936         $  2,415
         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
--------------------------------------------------------------------------------------------------------------------

         Fiscal 2002: Three months ended
                                                         November 30    February 28       May 31         August 31
--------------------------------------------------------------------------------------------------------------------

         Net sales and licensing fees                       $ 8,253      $ 111,867      $ 135,386         $  4,535
         Gross profit                                         2,438         39,736         48,470              188
         Net (loss) income applicable to common shares       (4,538)        17,721         25,012           (8,069)
         Net (loss) income per share-basic (2)                (0.12)          0.46           0.65            (0.21)
         Weighted average number of shares used
            in quarterly per share calculations -basic       38,385         38,454         38,343           38,267
         Net (loss) income per share- diluted (2)             (0.12)          0.44           0.63            (0.21)
         Weighted average number of shares used
              in quarterly per share calculations- diluted   38,385         39,991         39,769           38,267


(1) The 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 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.
</TABLE>



<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.

D&PL's chief executive  officer and chief  financial  officer have evaluated the
effectiveness  of the design and  operation  of D&PL's  disclosure  controls and
procedures  (as defined in Exchange Act Rule  13a-15(e))  as of August 31, 2004.
Based on that  evaluation,  the chief  executive  officer  and  chief  financial
officer  have  concluded  that D&PL's  disclosure  controls and  procedures  are
effective  to ensure  that  material  information  relating  to D&PL and  D&PL's
consolidated  subsidiaries is made known to such officers by others within these
entities,  particularly during the period this report was prepared,  in order to
allow timely decisions regarding required disclosure.

(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.

ITEM 9B.        OTHER INFORMATION

The Board of  Directors  of D&PL has  established  January  11, 2005 as the next
Annual Meeting of  Shareholders.  Shareholders of record as of November 16, 2004
will be entitled to vote at that meeting.

                                    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 11, 2005 to be filed
with the Commission pursuant to Regulation 14(a) no later than December 29, 2004
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 Investor Relations.

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

Information  with respect to these item are set forth in D&PL's Proxy  Statement
for the Annual  Meeting of  Stockholders  to be held on January  11,  2005 to be
filed with the  Commission  pursuant to Regulation  14(a) no later than December
29, 2004 and is incorporated herein by reference.


<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

        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:

                Report of Independent Registered Public Accounting Firm

                Consolidated Statements of Income - for each of the three
                   years in the period ended August 31, 2004

                Consolidated Balance Sheets - August 31, 2004 and 2003

                Consolidated Statements of Cash Flows - for each of the three
                   years in the period ended August 31, 2004

                Consolidated Statements of Changes in Stockholders' Equity and
                   Comprehensive Income - for each of the three years in the
                   period ended August 31, 2004

                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 ......57


                Schedule II - Consolidated Valuation and Qualifying Accounts..58

                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 59.



<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 15, 2004.

DELTA AND PINE LAND COMPANY
(Registrant)

/s/ Jon E. M. Jacoby                          November   15, 2004
---------------------------
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 Officer,  November 15, 2004
------------------------- and Director
W. Thomas Jagodinski      (Principal Executive Officer)


/s/ R. D. Greene          Vice President - Finance,            November 15, 2004
------------------------- Treasurer and Assistant Secretary
R. D. Greene              (Principal Financial and
                          Accounting Officer)


/s/ F. Murray Robinson    Vice Chairman and Director           November 15, 2004
-------------------------
F. Murray Robinson


/s/ Stanley P. Roth       Vice Chairman and Director           November 15, 2004
-------------------------
Stanley P. Roth


/s/ Nam-Hai Chua          Director                             November 15, 2004
-------------------------
Nam-Hai Chua


/s/ Joseph M. Murphy      Director                             November 15, 2004
-------------------------
Joseph M. Murphy


/s/ Rudi E. Scheidt       Director                             November 15, 2004
-------------------------
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 October 25, 2004, we reported on the  consolidated  balance sheets
of Delta and Pine Land Company and  subsidiaries  (the Company) as of August 31,
2004 and 2003, and the related consolidated statements of income,  stockholders'
equity  and  comprehensive  income,  and cash flows for each of the years in the
three-year  period ended August 31, 2004,  which are included in this Form 10-K.
In  connection  with our  audits of the  aforementioned  consolidated  financial
statements,  we  also  audited  the  related  consolidated  financial  statement
schedules listed in Part IV, Item 15(a)2.  These financial  statement  schedules
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statement schedules based on our audits.

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


/s/ KPMG LLP

Memphis, Tennessee
October 25, 2004




<PAGE>


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

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

Fiscal year ended August 31, 2002

Allowance for doubtful accounts      $      1,187     $       228       $    (303)(a)   $     (12)(b)        $  1,100

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

(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.
</TABLE>






<PAGE>


                                      INDEX
                     EXHIBITS TO ANNUAL REPORT ON FORM 10-K
                           YEAR ENDED AUGUST 31, 2004
                           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)

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  hereof,  and  Monsanto
Company, and, solely for the purposes of Section 3.2 hereof, 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)(*)

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. (16)

23.01 Consent of Independent Registered Public Accounting Firm. (16)

31.01 Section 302 Certification of Principal Executive Officer. (16)

31.02 Section 302 Certification of Principal Financial Officer. (16)

32.01  Certification of Periodic Financial Report Pursuant to 18 U.S.C.  Section
1350 by Principal Executive Officer. (16)

32.02  Certification of Periodic Financial Report Pursuant to 18 U.S.C.  Section
1350 by Principal Financial and Accounting Officer. (16)



-------------------------
(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) Filed herewith
(17) Incorporated by reference from Form 8-K filed November 1, 2004
(*)  The  Company has applied for  confidential  treatment  for  portions of
     this agreement. Accordingly, portions thereof have been omitted and filed
     separately.