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, 1998

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

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 incorporation or organization)           (I.R.S. Employer Identification No.)

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

Registrant's telephone number, including area code:  (601) 742-4500

           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. [ ]

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 October 31,
1998,  as  reported  on  the  New  York  Stock   Exchange,   was   approximately
$643,405,000.  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, 1998,  Registrant had outstanding  38,394,541 shares of Common
Stock.







<PAGE>


                                     PART I

ITEM 1.         BUSINESS


On May 8,  1998,  Delta and Pine  Land  Company  and  subsidiaries,  a  Delaware
Corporation  ("D&PL" or the  "Company")  entered  into a merger  agreement  with
Monsanto  Company  ("Monsanto"),  pursuant to which the Company  would be merged
with and into  Monsanto.  This  agreement  is  subject  to the  approval  of the
Company's  stockholders  and the  expiration  of the  waiting  period  under the
Hart-Scott-Rodino  Antitrust  Improvements  Act  of  1976.  Under  terms  of the
agreement, the Company's stockholders would be entitled to receive 0.8625 shares
of  Monsanto's  Common  Stock in exchange  for each share of Delta and Pine Land
stock they hold.

On June 1,  1998,  Monsanto  and  American  Home  Products  Corporation  ("AHP")
announced  that they had entered into an agreement  providing  for the merger of
those two companies.  On October 13, 1998, AHP and Monsanto  announced  publicly
that they had mutually agreed to terminate the merger pursuant to the agreement.

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. D&PL also breeds,  produces,  conditions and
distributes soybean planting seed in the United States.

Since 1915, D&PL has 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.  The Company has used its  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 1996, D&PL
commenced  commercial  sales  in the  United  States  of  cotton  planting  seed
containing Bollgard(TM) gene technology licensed from Monsanto which expresses a
protein  toxic to  certain  lepidopteran  cotton  pests.  Since  1997,  D&PL has
marketed  in the  U.S.  genetically  modified  cotton  planting  seed  providing
tolerance to glyphosate-based herbicides ("Roundup Ready(R) Cotton").


In 1980,  D&PL added soybean seed and in 1988 hybrid sorghum seed to its product
line.  In 1988,  D&PL also  commenced  distributing  corn hybrids  acquired from
others. In 1995, the Company sold its corn and sorghum business to Mycogen Plant
Science,  Inc.  ("Mycogen").  D&PL and Mycogen  entered  into a joint  marketing
agreement  whereby  both  companies  sold  D&PL's  remaining  corn  and  sorghum
varieties through 1997. D&PL will exchange a sorghum processing plant located in
Plainview,  Texas for a cottonseed delinting facility in Lubbock, Texas owned by
Mycogen by December 31, 1998.


During the 1980's, as a component of its long-term growth strategy,  the Company
began to market its  products,  primarily  cottonseed,  internationally.  Over a
period of years,  the Company has  strengthened  and expanded its  international
staff in order to support its  expanding  joint venture  activities.  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. Management believes that
D&PL has an attractive  opportunity to penetrate  foreign markets because of its
widely adaptable, superior cotton varieties, technological know-how in producing
and conditioning high-quality seed and brand name recognition.  Furthermore,  in
many countries the Bollgard gene  technology  and Roundup Ready gene  technology
licensed from Monsanto would be effective and help farmers in those countries.

D&PL sells its products in foreign  countries  through (i) export sales from the
U.S., (ii) direct incountry operations and to a lesser degree (iii) distributors
or  licensees.  The method  varies and  evolves,  depending  upon the  Company's
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.  To date,  a  majority  of the  Company's
international  sales have  resulted  from exports from the U.S. of the Company's
products rather than direct in-country operations.

In 1997,  D&PL  announced a production  and cost  optimization  program aimed to
improve operating efficiencies. As part of this program, the Company idled three
of its delinting  facilities and reduced its work force at these  facilities and
at other locations by offering  eligible  employees a voluntary early retirement
plan. D&PL believes its reconfigured  production  capabilities  will allow it to
continue to meet the accelerating  demand for its insect resistant and herbicide
tolerant transgenic products on a cost efficient basis to the farmer.

Employees

As of October 31, 1998, the Company  employed a total of 581 full time employees
worldwide.  Due to the nature of the  business,  the Company  utilizes  seasonal
employees in its delinting plants and its research and foundation seed programs.
The maximum number of seasonal  employees  approximates 300 and typically occurs
in October  and  November  of each year.  The  Company  considers  its  employee
relations to be good.

Acquisitions

In 1996, D&PL acquired Ellis Brothers Seed, Inc., Arizona  Processing,  Inc. and
Mississippi  Seed,  Inc.,  which own the  outstanding  common stock of Sure Grow
Seed,  Inc.,  (the  "Sure  Grow  Companies")  in  exchange  for stock  valued at
approximately  $70 million on the day of  closing.  D&PL  exchanged  2.8 million
shares of its common stock (after all stock splits) for all  outstanding  shares
of the three companies.  The merger was accounted for as a pooling-of-interests.
The Company  continues to market upland picker  cottonseed  varieties  under the
Sure Grow brand. Additionally, the Sure Grow breeding program has full access to
Monsanto's Bollgard and Roundup Ready gene technologies.

In 1996, the Company acquired Hartz Cotton,  Inc. from Monsanto,  which included
inventories of cotton planting seed of Hartz upland picker varieties, germplasm,
breeding stocks,  trademarks,  trade names and other assets,  for  approximately
$6.0 million. The consideration consisted primarily of 800,000 shares (after all
stock splits) of the Company's Series M Convertible  NonVoting  Preferred Stock.
Additional  shares  may  be  issued  to  Monsanto  depending  on the  sales  and
profitability levels achieved by the product line acquired.

Since the 1940's,  the  Paymaster(R) and Lankart(R)  upland stripper  cottonseed
varieties have been  developed for and marketed  primarily in the High Plains of
Texas and Oklahoma (the "High Plains"). In 1994, D&PL acquired the Paymaster and
Lankart cotton planting seed business  ("Paymaster"),  for  approximately  $14.0
million.  Although the Paymaster  varieties are planted on approximately  80% of
the estimated 4.0 to 5.0 million cotton acres in the High Plains, only a portion
of that seed is actually  sold by  Paymaster.  Farmer-saved  seed accounts for a
significant portion of the seed needed to plant the acreage in this market area.
Through  1996 the  seed  needed  to  plant  the  remaining  acreage  was sold by
Paymaster and its 12 sales  associates  through a certified seed program.  Under
this program,  Paymaster  sold parent seed to its contract  growers who planted,
produced and  harvested  the progeny of the parent seed,  which  Paymaster  then
purchased  from the  growers.  The  progeny of the parent  seed was then sold by
Paymaster to the sales associates who in turn delinted,  conditioned, bagged and
sold it to others as  certified  seed.  The sales  associates  paid a royalty to
Paymaster on certified seed sales.  Beginning in fiscal 1997,  D&PL's operations
department,   in  addition  to  producing  parent  seed,   commenced  delinting,
conditioning and bagging finished seed.  Unconditioned  seed is also supplied by
D&PL to a limited number of contract  processors  who delint,  condition and bag
seed for a fee.  This  finished  seed is sold by Paymaster to  distributors  and
dealers.

The Company acquired in 1994 from the Supima  Association of America  ("Supima")
certain  planting seed inventory,  the right to use the Supima(R) trade name and
trademark  and the right to distribute  Pima  extra-long  staple  (fiber-length)
cotton  varieties.  D&PL also entered into a research  agreement  with  Supima's
university collaborator that allows D&PL the right of first refusal for any Pima
varieties  developed under this program which D&PL partially funds. In 1998 D&PL
gave notice to its  university  collaborator  of its intention to terminate this
agreement.  Pima seed is produced,  conditioned and sold by D&PL to distributors
and dealers.

Biotechnology

Collaborative  biotechnology  licensing  agreements  which  were  executed  with
Monsanto  in 1992 and  subsequently  revised in 1993 and 1996,  provide  for the
commercialization of Monsanto's Bollgard ("Bacillus thuringiensis" or "Bt") gene
technology in D&PL's  varieties.  The selected Bt is 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.  This
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 D&PL for use under the trade name  Bollgard.  In
D&PL's  primary  markets,  the  cost  of  insecticides  is  the  largest  single
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,  Monsanto was notified that the
United States Environmental  Protection Agency ("EPA") had completed its initial
registration  of the  Bollgard  gene  technology,  thus  clearing  the  way  for
commercial  sales of seed  containing  the  Bollgard  gene.  In 1996,  D&PL sold
commercially  for the first time two Delta Pine  varieties,  which contained the
Bollgard  gene,  in  accordance  with the terms of the Bollgard Gene License and
Seed  Services  Agreement  (the  "Bollgard  Agreement")  between the Company and
Monsanto.  This initial EPA  registration  expires on January 1, 2001,  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
sub-license  for the  technology  from D&M Partners,  a partnership  of D&PL and
Monsanto,  in order to purchase  seed  containing  the Bt gene  technology.  The
distributor/dealers  who  coordinate  the  farmer  licensing  process  receive a
service payment not to exceed 20% of the technology sub-licensing fee. After the
dealers and distributors  are compensated,  D&M Partners pays Monsanto a royalty
equal to 71% of the net  sub-license  fee  (technology  sub-licensing  fees less
distributor/dealer payments) and D&PL receives 29% for its services. The license
agreement  continues  until the later of the  expiration of all patent rights or
October 2008.

Pursuant to the Bollgard  Agreement,  Monsanto  must defend and  indemnify  D&PL
against claims of patent infringement,  including all damages awarded or amounts
paid in  settlements.  Monsanto  must also  indemnify  D&PL  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 royalty. Indemnity
from  Monsanto  only  covers  performance  claims  involving  failure  of insect
resistance, and not claims arising from other causes.

D&PL has also developed  transgenic cotton and transgenic soybean varieties that
are tolerant to Roundup, 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. In February  1996,  the Company and  Monsanto  executed  the
Roundup  Ready Gene License and Seed  Services  Agreement  (the  "Roundup  Ready
Agreement")   which  provides  for  the   commercialization   of  Roundup  Ready
cottonseed.  The Roundup Ready Agreement grants a license to D&PL and certain of
its  affiliates  the right in the  United  States to sell  cottonseed  of D&PL's
varieties  that contain  Monsanto's  Roundup Ready gene.  The Roundup Ready gene
makes cotton plants tolerant to contact with Roundup  herbicide.  Similar to the
Bollgard  Agreement,  farmers  must  execute  limited use  sub-licenses  for the
technology in order to purchase seed containing the Roundup Ready Gene. Monsanto
must defend and indemnify D&PL against claims of patent infringement,  including
all damages awarded or amounts paid in settlements. Monsanto will also indemnify
D&PL against the cost of inventory  that  becomes  unsaleable  because of patent
infringement claims, but Monsanto is not required to indemnify D&PL against lost
profits on such  unsaleable  seed.  In contrast  with the Bollgard  Gene License
where the costs of gene  performance  claims will be shared in proportion to the
division of  sub-license  revenue,  Monsanto  must defend and must bear the full
cost of any claims of failure of  performance of the Roundup Ready Gene. In both
agreements,  generally, D&PL is responsible for varietal/seed performance issues
and Monsanto is  responsible  for failure of the genes.  In February  1997,  the
Company and Monsanto  executed the Roundup Ready Soybean License  Agreement (the
"Roundup Ready Soybean Agreement") which provides for the  commercialization  of
Roundup Ready soybean seed.

Since  1987,  D&PL has  conducted  research  using  genes  provided by DuPont to
develop  soybean plants that are tolerant to certain  DuPont ALS(R)  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 ALS herbicide-tolerant trait was not genetically engineered, sale
of this seed does not require  government  approval,  although the  herbicide to
which they express tolerance must be EPA approved.

D&PL  announced  in March  1998 that it was  granted  United  States  Patent No.
5,723,765,  entitled  CONTROL OF PLANT  GENE  EXPRESSION.  This  patent is owned
jointly  by D&PL  and the  United  States  of  America,  as  represented  by the
Secretary  of  Agriculture.  The patent  broadly  covers  plants and seed,  both
transgenic  and  conventional,  of all  species  for a system  designed to allow
control of progeny  seed  viability  without  harming  the crop.  The  principal
application of the technology will be to control  unauthorized  planting of seed
of  proprietary  varieties  (sometimes  called  "brown  bagging") by making such
practice  non-economic  since  unauthorized  saved seed will not germinate,  and
would  be  useless  for  planting.  The  patent  has  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 intends that licensing of this technology will be
made widely available to other seed companies and intends for it to be used only
in those varieties that contain transgenic traits.

The patent  was  developed  from a  research  program  conducted  pursuant  to a
Cooperative  Research  and  Development  Agreement  between  D&PL  and the  U.S.
Department of Agriculture's Agricultural Research Service in Lubbock, Texas. The
technology  resulted from basic research and will require  further  development,
which is already  underway,  in order to be used in commercial seed. The Company
estimates  that  it may  be as  many  as  seven  years  before  this  Technology
Protection System ("TPS") could be available commercially.

The Company has license, research and development,  confidentiality and material
transfer  agreements with providers of technology that the Company is evaluating
for potential  commercial  applications  and/or  introduction.  The Company also
contracts  with third parties to perform  research on the  Company's  behalf for
enabling  and  other  technologies  that the  Company  believes  have  potential
commercial  applications  in  varietal  crops  around the world.  The  Company's
aggregate  research and development  costs were $9.8 million,  $13.7 million and
$16.7 million during 1996, 1997 and 1998 respectively.

Commercial Seed

Seed of all commercial plant species is either varietal or hybrid. D&PL's 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 D&PL's  primary  domestic  markets
purchase seed from commercial  sources each season because  cottonseed  requires
delinting  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.

In connection  with its seed  operations,  the Company also farms  approximately
2,600  acres in the  U.S.,  primarily  for  production  of  cotton  and  soybean
foundation  seed.  The Company has annual  agreements  with  various  growers to
produce seed for cotton and soybeans.  The growers  plant parent seed  purchased
from the Company  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 standards
upon  harvest,  the  Company may be  obligated  to  purchase  specified  minimum
quantities of seed,  usually in its first and second fiscal quarters,  at prices
equal to the  commodity  market  price of the seed  plus a grower  premium.  The
Company then conditions the seed for sale.

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

Revenues from domestic seed sales are generally recognized when seed is shipped.
Revenues from Bollgard and Roundup Ready licensing fees are recognized  based on
the  number  of acres  expected  to be  planted  with such seed when the seed is
shipped.  Prior to 1998,  licensing  fees were based on the estimated  number of
acres that  farmers  represented  would be planted with the seed  purchased.  In
1998, the licensing fee charged to farmers was based on pre-established planting
rates for seven geographic  regions.  Revenue is recognized based on established
technology fee per unit shipped to each  geographic  region.  Domestically,  the
Company  promotes its cotton and soybean seed  directly to farmers and sells its
seed  through  distributors  and dealers.  All of the  Company's  domestic  seed
products  (including  Bollgard and Roundup  Ready  technologies)  are subject to
return or credit, 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 the
Company's third and fourth quarters.  The Company provides for estimated returns
as sales occur. To the extent actual returns differ from estimates,  adjustments
to the Company's  operating  results are recorded when such  differences  become
known,  typically in the Company's fourth quarter. All significant returns occur
or are accounted for by fiscal year end.  International export seed revenues are
recognized  upon the date seed is  shipped  or the date  letters  of credit  are
cleared,  whichever  is later.  Generally,  international  export  sales are not
subject to return.

Year 2000 Readiness Disclosure

Beginning in 1996,  D&PL  initiated  its Global Year 2000 program to ensure that
its infrastructure and information systems comply with the systems  requirements
for the year 2000.  The  program  includes  the  following  phases:  identifying
systems  that need to be  replaced  or fixed;  assessing  the extent of the work
required;  prioritizing  the work;  and  successfully  completing the associated
action plans. In higher risk areas,  the Company also has developed  contingency
action  plans.  D&PL has  essentially  completed  the first three  phases of the
program  and is now  primarily  in the  implementation  phase.  Some  additional
identification and assessment  continues for recent acquisitions and in the area
of embedded  systems.  The majority of systems,  including all business critical
systems, are expected to comply with year 2000 requirements by the first quarter
of 1999 due in large part to the  installation  in fiscal  1997 of a third party
software  system,  at a cost in  excess  of  $3.0  million,  that  is year  2000
compliant. The Company continues to evaluate the estimated costs associated with
year 2000  compliance  based on actual  experience.  While the year 2000 efforts
involve additional costs, D&PL believes, based on available information, that it
will be able to manage its year 2000  transition  without any  material  adverse
effect  on  its  business  operations,   financial  position,  profitability  or
liquidity.  Total costs incurred to date for year 2000 considerations (excluding
third party software) approximate $0.2 million and the Company estimates that it
might cost an  additional  $0.5  million to  complete  the year 2000  compliance
process.

D&PL also has contacted its major suppliers to assess their preparations for the
year 2000. Similar contacts also are planned for major customers.  These actions
are taken to help  mitigate  the possible  external  impact of year 2000 issues.
Even so, presently it is not feasible to fully assess the potential consequences
if service interruptions occur from suppliers or in such infrastructure areas as
utilities,  communications,  transportation,  banking  and  government.  D&PL is
developing  business  continuity  plans to minimize the impact of such  external
events.

Outlook

From time to time, the Company may make  forward-looking  statements relating to
such matters as anticipated financial performance,  existing products, technical
developments,  new  products,  research and  development  activities,  year 2000
issues 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,  the Company notes that a variety of factors could
cause the Company's actual results and experience to differ  materially from the
anticipated   results  or  other   expectations   expressed  in  the   Company's
forward-looking  statements.  The risks and  uncertainties  that may  affect the
operations,  performance,  development  and  results of the  Company's  business
include those noted elsewhere in this Item and the following:

     D&PL's contemplated merger with Monsanto is subject to shareholder approval
     as well as approval by government agencies.  The inability to complete this
     merger may have a material  effect on the  Company.  However,  such  effect
     cannot be known at this time.

     Demand for D&PL's seed will be affected by  government  programs  and, most
     importantly,  by weather.  Demand for seed is also  influenced by commodity
     prices and the demand for a crop's end-uses such as textiles,  animal feed,
     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 D&PL  varieties  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.  The Company's
     seed  products may encounter  substantial  competition  from  technological
     advances  by others  or  products  from new  market  entrants.  Many of the
     Company's  competitors  are,  or are  affiliated  with,  large  diversified
     companies that have substantially greater resources than the Company.

     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.
     Particular  policies which may affect the international  operations of D&PL
     include the testing and 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 the Company's international operations.

     Overall  profitability  will  depend  on  weather  conditions,   government
     policies in all countries  where the Company  sells  products and operates,
     worldwide  commodity prices, the Company's ability to successfully open new
     international  markets, the Company's ability to successfully  continue the
     development of the 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 the Company are
     working  and  the  Company's  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.

     Due to the varying  levels of  agricultural  and social  development of the
     international  markets in which the Company operates and because of factors
     within  the  particular  international  markets  targeted  by the  Company,
     international  profitability  and growth may be less stable and predictable
     than domestic profitability and growth have been in the past.

See "Risks and Uncertainties" in Item 7.

ITEM 2.         PROPERTIES

D&PL maintains facilities primarily used for research, delinting,  conditioning,
storage and  distribution.  The Company's  headquarters and other facilities are
located in Scott,  Mississippi.  This  location is used for  corporate  offices,
quality assurance, research and greenhouse space, and storage.

The  Company's  other  owned  cottonseed  delinting,  conditioning  and  storage
facilities are in: Centre,  Alabama;  Chandler,  Arizona (on leased land); Eloy,
Arizona;  Hollandale,  Mississippi;  Shelby,  Mississippi;  Tunica, Mississippi;
Aiken,  Texas and Lubbock,  Texas. The Company has soybean  processing plants in
Harrisburg,  Arkansas  and Centre,  Alabama.  The Company  also owns  cottonseed
delinting  facilities in  Narromine,  New South Wales,  Australia,  Groblersdal,
South Africa, Shijiazhuang,  Hebei, China (through a Chinese joint venture), and
through an  Argentine  joint  venture,  a  delinting  plant  under  construction
(scheduled  completion is February 1999) in Saenz Pena,  Chaco,  Argentina.  The
Company  leases  land in  Catamarca,  Argentina  on which a  delinting  plant is
situated.  The  Company's  delinting  and  conditioning   facilities  in  Scott,
Mississippi,  Centre, Alabama, and Tunica, Mississippi were idled in conjunction
with  the  production  and  cost  optimization   program  in  1997.  The  Scott,
Mississippi facility may be used on an "as needed" basis in 1998.

The Company's plant breeders  conduct research at eight facilities in the United
States,  five of which are owned by the  Company  and three of which are leased.
The Company also leases  research  facilities  in  Australia  and  Paraguay.  In
connection  with its  foundation  seed program,  the Company  leases land in the
United States, Argentina, Costa Rica and South Africa.

All owned properties are free of encumbrances  except the Centre,  Alabama site,
which  was  mortgaged  prior to being  acquired  in the Sure  Grow  transaction.
Management  believes that all of D&PL's facilities,  including its conditioning,
storage and research  facilities,  are well maintained and generally adequate to
meet  its  needs  for  the  foreseeable  future.  (See  "Liquidity  and  Capital
Resources" in Item 7).

PRINCIPAL COMPANY LOCATIONS, AFFILIATES AND SUBSIDIARIES:

World Headquarters                      Operations Facilities
Scott, Mississippi, USA                 Scott, Mississippi, USA
                                        Hollandale,  Mississippi,  USA
Research Centers                        Shelby, Mississippi,  USA
Scott, Mississippi,  USA                Tunica,  Mississippi,  USA 
Leland,  Mississippi,  USA              Centre, Alabama, USA 
Casa Grande, Arizona, USA               Chandler, Arizona, USA 
Chandler, Arizona, USA                  Eloy,  Arizona,  USA 
Stuttgart,  Arkansas,  USA              Harrisburg,  Arkansas,  USA
Hartsville,  South  Carolina,  USA      Aiken,  Texas,  USA 
Hale Center,  Texas,  USA               Lubbock,  Texas,  USA
Lubbock,  Texas,  USA                   Catamarca,  Argentina  
Goondiwindi, Queensland,  Australia     San Jose, Costa Rica 
Asuncion,  Paraguay                     Narromine,  New South Wales, Australia 
Larissa, Greece                         Hefei, Anhui, People's Republic of China
                                        Shijiazhuang, Hebei, People's Republic 
                                         of China
                                        Groblersdal, South Africa
                                        Saenz Pena,  Chaco, Argentina
                                        Uberlandia, Minas Gerais, Brazil

                                        Foreign Offices
                                        Narrabri, New South Wales, Australia
                                        Beijing, People's Republic of China
                                        Mexicali, Mexico
                                        Mexico City, Mexico
                                        Zoetermeer, The Netherlands
                                        Seville, Spain
                                        Adana, Turkey
                                        Izmir, Turkey
                                        Urfa, Turkey



ITEM 3.         LEGAL PROCEEDINGS

Through  October 26, 1998, approximately  51 farmers  filed  arbitration  claims
against the Company and Monsanto  Company  ("Monsanto")  with state  agencies in
Mississippi and Texas. The complainants  allege that Roundup Ready seed marketed
by the Company failed to perform as anticipated resulting in deformed or missing
bolls and some further assert  substantial yield losses in their 1998 crops. The
Company and Monsanto are presently  investigating  these claims to determine the
cause or causes of the  problems  alleged.  Pursuant to the terms of the Roundup
Ready Gene License and Seed Services  Agreement (the "Roundup Ready  Agreement")
between D&PL and Monsanto,  Monsanto has assumed  responsibility for the defense
of  these  claims.  Pursuant  to  the  Roundup  Ready  Agreement,   Monsanto  is
contractually  obligated to defend and indemnify the Company  against all claims
arising out of failure of the Roundup Ready glyphosate tolerance gene. D&PL will
not have a right to  indemnification  from  Monsanto,  however,  for any  claims
involving  defective  varietal  characteristics  separate from or in addition to
failure of the herbicide-tolerance gene. D&PL believes that these claims will be
resolved without any material impact on the Company's financial statements.

Through  October 26, 1998,  101 farmers in Georgia and 2 in Arkansas  have filed
arbitration  claims  against the  Company  and,  in some  cases,  Monsanto.  The
complainants allege that certain Roundup Ready Paymaster cotton seed marketed by
the Company in 1998 produced  plants which exhibited a condition known as Bronze
Wilt and consequently  sustained  varying degrees of lost yield. Some complaints
also contain  allegations of poor  germination.  D&PL and Monsanto are currently
investigating  these  claims to  determine  the  cause or causes of the  alleged
problems and are working cooperatively with the respective states departments of
agriculture to gather the necessary  information regarding causation and damage.
Presently, the definitive causes of the alleged Bronze Wilt and poor germination
in this seed have not been  established,  and accordingly  Monsanto's  indemnity
obligation,  if any, is unresolved.  It is D&PL's intention to defend vigorously
claims  asserting  product  defects in the varieties.  Management  believes that
these  complaints  will be resolved  without any future  material  impact on the
Company's consolidated financial statements.

The  Company,  certain  subsidiaries  of  Monsanto  and  others  were  named  as
defendants in a lawsuit filed in the Civil District  Court,  Williamson  County,
Texas,  277th Judicial  District,  in April 1997. The plaintiffs  allege,  among
others  things,  that certain  cottonseed  acquired  from  Monsanto in the Hartz
Cotton  acquisition and subsequently  sold by the Company,  failed to perform as
represented,  allegedly resulting in lost yield. The Company has filed a Summary
Judgment motion based on failure to arbitrate in accordance with Texas seed law.
Pursuant to the Hartz Cotton Acquisition  Agreement,  the Company is entitled to
indemnification from Monsanto for damages resulting from the sale of bagged seed
inventories  acquired  by  D&PL  in that  acquisition.  Some or all of the  seed
involved in this case may meet this criteria and D&PL will therefore be entitled
to  indemnification  from  Monsanto  for any  losses  resulting  from such seed.
Management  believes that this case will be resolved without any material impact
on the Company's financial statements.

The Company,  Monsanto and other third  parties  were named as  defendants  in a
lawsuits filed in (i) the District Court of Falls County,  Texas, in August 1996
and (ii) in the District Court of Robertson  County,  Texas,  in March 1998. The
plaintiffs allege, among other things, that D&PL's cottonseed  varieties,  which
contain Monsanto's Bollgard gene, did not perform as the farmers had anticipated
and, in  particular,  did not fully  protect  their  cotton  crops from  certain
lepidopteran  insects.  Pursuant to the terms of the Bollgard  Agreement between
D&PL and Monsanto,  Monsanto has assumed responsibility for the defense of these
claims.  The portion of this claim  relating to failure of the Bollgard  gene is
subject to a duty of defense by Monsanto and prorata  indemnification  under the
Bollgard Agreement.  Under the applicable  indemnity  provisions of the Bollgard
Agreement,  defense costs and liability to the  plaintiffs on any failure of the
technology  would be  apportioned  71% to Monsanto and 29% to D&PL.  Some of the
claims in this  litigation  concern  failure of  Monsanto's  express  warranties
relating to insect  resistance  and those  claims may not be within the scope of
D&PL's partial indemnity obligation to Monsanto.  On the other hand, some of the
claims  made in the  litigation  concern  the  quality  of seed  and  seed  coat
treatments,  or other  varietal  aspects of variety,  not  involving  failure of
performance of the Bollgard gene or express representations with respect thereto
and, therefore,  may not be within the scope of Monsanto's  indemnity obligation
to D&PL.  D&PL intends to cooperate  with Monsanto in its  anticipated  vigorous
defense of these suits.  D&PL believes that these suits will be resolved without
any material impact on the Company's consolidated financial statements.

In  October  1996,   Mycogen  Plant  Science,   Inc.  and   Agrigenetics,   Inc.
(collectively  "Mycogen")  filed a lawsuit in U.S.  District  Court in  Delaware
naming D&PL,  Monsanto and DeKalb  Genetics as  defendants  alleging that two of
Mycogen's  recently  issued  patents have been  infringed by the  defendants  by
making,  selling,  and licensing  seed that contains the Bollgard gene. The suit
which  went  to  trial  on  January  1998  sought  injunctions  against  alleged
infringement, compensatory damages, treble damages and attorney's fees and court
costs.  A jury found in favor of D&PL and  Monsanto  on issues of  infringement.
Mycogen has subsequently re-filed a motion for a new trial and for a judgment in
favor of  Mycogen  as a matter of law.  Pursuant  to the  terms of the  Bollgard
Agreement,  Monsanto  is required to defend  D&PL  against  patent  infringement
claims and indemnify D&PL against  damages from any patent  infringement  claims
and certain other losses and costs.  Due to  Monsanto's  obligation to indemnify
D&PL,  the Company  believes that the  resolution of this matter will not have a
material impact on the Company or its financial statements.

In  May  1998,  five  individual  alleged  shareholders  brought  suits  against
Monsanto,  the Company and its Board of Directors  ("Directors") in the Chancery
Court  of  New  Castle  County,   Delaware.  The  complaints  alleged  that  the
consideration to be paid in the proposed merger of the Company with Monsanto, is
inadequate and that the Company's  Directors  breached their fiduciary duties to
the Company stockholders by voting approval of the Agreement and Plan of Merger,
and that Monsanto  aided and abetted the alleged  breach of fiduciary  duty. The
complaints were consolidated into one action, which seeks a declaration that the
action is  maintainable  as a class  action,  that the  merger be  enjoined,  or
alternatively, rescinded, and/or an award of unspecified compensatory damages if
the merger is consummated.  Management  believes that the complaints are without
merit and intend to vigorously defend the consolidated complaints.  D&PL further
believes that the consolidated  complaints will be resolved without any material
impact in the Company's consolidated financial statements.

A corporation  owned by the son of the Company's former  Guatemalan  distributor
sued in 1989  asserting  that  the  Company  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  5,300,000  Guatemalan
quetzales  (approximately  $800,000 at current exchange rates) and an injunction
preventing the Company 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.  Management  believes  that  the
resolution  of the matter  will not have  material  impact on the Company or its
financial statements. The Company continues to offer seed for sale in Guatemala.

The Company is involved in various other claims  arising in the normal course of
business. Management believes such matters will be resolved without any material
effect on the Company's financial position or its results of operations.

On July 18, 1996, the United States  Department of Justice,  Antitrust  Division
("USDOJ"),   served  a  Civil  Investigative  Demand  ("CID")  on  D&PL  seeking
information  and  documents  in  connection  with  its   investigation   of  the
acquisition  by D&PL of the stock of Arizona  Processing,  Inc.,  Ellis Brothers
Seed, Inc. and Mississippi Seed, Inc. (which own the outstanding common stock of
Sure Grow Seed,  Inc).  The CID states that the USDOJ is  investigating  whether
these  transactions may have violated the provisions of Section 7 of the Clayton
Act, 15 USC ss. 18. D&PL has responded to the CID,  employees have been examined
by the USDOJ,  and D&PL is committed to full  cooperation with the USDOJ. At the
present time, the ultimate outcome of the investigation cannot be predicted.

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

No matters  were  submitted  to the vote of security  holders  during the fourth
quarter of 1998.

                                     PART II

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

From June 1993 through December 15, 1995, the stock of the Company was traded on
the NASDAQ  National Market under the trading symbol COTN. On December 18, 1995,
the Company's  stock began  trading 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 after  adjustment  for all
stock splits, was as follows:

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

1997
Market Price Range  - Low .........    $  15.25    $ 17.44    $ 16.31    $ 16.03
                    - High ........       22.36      22.79      22.79      29.63

1998
Market Price Range  - Low .........    $  23.69    $ 24.50    $ 42.19    $ 41.25
                    - High .......        32.56      39.19      53.75      49.94

*   Amounts  have been adjusted for all stock splits.

In February  1997,  the Board of Directors  authorized a 4 for 3 stock split for
common and preferred shares outstanding effected in the form of a dividend, with
no change in par value per share, distributed on April 11, 1997, to stockholders
of record on March 31, 1997. In October 1997, the Board of Directors  authorized
a 4 for 3 stock split for common and preferred  shares  outstanding  effected in
the form of a dividend,  with no change in the par value per share,  distributed
on November 20, 1997, to the  stockholders  of record on November 10, 1997.  All
stock splits described above have been reflected in the  accompanying  financial
statements and elsewhere in this Annual Report.

Annual dividends of $0.078 per share (after effect of stock splits) were paid in
1997 and annual  dividends  of $0.120 per share were paid in 1998.  The Board of
Directors  maintained the quarterly  dividend rate of $0.03 per share after each
of the  above  splits  which  in  effect  increased  the  dividend  paid.  It is
anticipated that quarterly dividends of $0.03 per share will continue to be paid
in the future,  although the Board of Directors  reviews this policy  quarterly.
Aggregate  dividends paid in 1998 were $4.7 million and should  approximate $4.7
million again in 1999.

On  October  31,  1998,  there  were  approximately  9,000  shareholders  of the
Company's 38,394,541 outstanding shares.

<PAGE>


ITEM 6.          SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

FINANCIAL HIGHLIGHTS                            (In thousands, except percentages and per share amounts)

YEAR ENDED AUGUST 31,                                1994       1995      1996        1997       1998
                                                    ------     ------    ------      ------     ------

Operating Results :
<S>                                                <C>        <C>        <C>        <C>        <C>     
Net sales and licensing fees                       $ 80,602   $ 98,950   $153,271   $183,249   $192,339
Special charges and unusual charges
    related to acquisitions(1)                         --         --        1,418     20,700     22,662
Net income applicable to common shares                7,827     10,935     15,237      6,850      1,783

Balance Sheet Summary:
Current assets                                     $ 29,269   $ 36,296   $111,940   $145,449   $174,502
Current liabilities                                  18,833     24,695     75,966    112,524    116,136
Working capital                                      10,436     11,601     35,974     32,925     58,366
Total assets                                         72,394     87,542    179,660    220,656    251,791
Long-term debt                                       14,047     12,814     31,465     30,572     47,070
Stockholders' equity                                 38,024     47,860     69,341     72,531     80,651

Per Share Data:
Net income applicable to common shares -Basic(2)   $   0.21   $   0.29     $ 0.41      $ 0.1    $  0.05
Book value(2)                                          1.03       1.29       1.86       1.93       2.12
Cash dividends                                        0.045      0.045      0.062      0.078       0.12
Weighted average number of shares
  used in per share calculations - Basic(2)          37,065     37,077     37,292     37,579     38,011
</TABLE>
----------

(1)  In 1997 the Company  announced a production and cost  optimization  program
     which  resulted in the  Company  taking a special  charge of $19.0  million
     along with $1.7 million for  nonrecurring  charges related to acquisitions.
     In 1998,  the  Company  reported  (a) a $17.5  million  special  charge for
     inventory  write offs due to a  reduction  in cotton  acreage in 1998,  the
     further  realignment  of the  Company's  product  line  to  seed  with  new
     technologies  and the recall of certain  products that did not meet quality
     standards  and (b) $5.1  million  in costs  associated  with the  Company's
     evaluation  of various  strategic  alternatives  and the  Monsanto  Merger.
(2)  Adjusted for the effects of applying SFAS No. 128, "Earnings per share".



<PAGE>


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


Overview

Increased sales of the Company's transgenic cotton varieties containing both the
Bollgard and Roundup Ready gene technologies, and the increased commercial sales
of D&PL cotton  varieties  containing the Roundup Ready gene  technology are the
major  reasons that D&PL  reported  record  sales  despite the fact that acreage
planted in cotton with the U.S.  declined to 12.8 million acres from 1997 levels
of 13.8 million acres.  Commodity  prices and the cold wet weather in some areas
and  drought  conditions  in other  areas  during  the  cotton  planting  season
contributed  to the  reduction  in cotton  acreage  planted to levels well below
initial USDA and Company estimates.  Furthermore,  a substantial number of acres
were  abandoned for which no  technology  fees were  assessed.  The Company sold
sufficient  quantities  of  seed  containing  the  transgenic  traits  to  plant
approximately  4.5 million acres in 1998 versus  approximately 2.5 million acres
in 1997.  First year sales by D&PL's China joint venture,  although  impressive,
fell below best case  estimates  of up to 500,000  acres when only  200,000 were
actually  planted.  Even so, the joint venture may report a slight profit in its
first full year of  operation.  Export sales  increased to $11.5 million in 1998
from $10.6 million in 1997.

In 1998,  the  Company  recorded  special  and  nonrecurring  pretax  charges of
$22,662,000  that  relate to  additional  inventory  reserves  and,  to a lesser
degree,  to costs related to the  evaluation of various  strategic  alternatives
which  culminated in the Company entering into a merger agreement with Monsanto.
The  unprecedented  level of inventory  reserves and write offs were a result of
excess  inventory  quantities  resulting  from a 7% reduction in acreage and the
further  realignment of the Company's product line.  Furthermore,  the Company's
domestic market share declined slightly which the Company believes resulted from
the second quarter recall of certain  varieties that contained both the Bollgard
and Roundup Ready  technology.  The  accelerated  shift to  transgenic  products
significantly  complicates inventory management and product line design and will
require  continued  dedicated  efforts to effectively  manage the Company's ever
changing  product line.  The costs related to the merger are primarily  fees for
legal advice, investment bankers and other professionals.

In 1997,  D&PL  announced a program to optimize  production  and cost  operating
efficiencies which included the idling of three of its less efficient  delinting
plants,  the write down of assets  whose value has been  impaired as a result of
implementing the plan, plant consolidation costs relating to implementation of a
new process  manufacturing  system and costs to phase out certain products.  The
Company  reduced  its  existing  domestic  work  force as a result  of the plant
closings and by offering an early  retirement  program to all  employees who met
certain uniformed criteria.

D&M  International,  LLC, is a venture  formed in 1995  through  which D&PL (the
managing member) and Monsanto plan to introduce,  in combination,  cottonseed in
international  markets  combining  D&PL's acid  delinting  technology  and elite
germplasm  and  Monsanto's  Bollgard  gene  technology.  In November  1995,  D&M
International,  LLC formed a subsidiary,  D&PL China Pte Ltd. ("D&PL China"). In
November 1996, D&PL China concluded negotiations with parties in Hebei Province,
one of the major cotton producing  regions in the People's Republic of China, to
form Hebei Ji Dai Cottonseed Technology Company Ltd. ("Ji Dai"), a joint venture
controlled by D&PL China.  In June 1997, Ji Dai commenced  construction of a new
cottonseed conditioning and storage facility in Hebei, China, under terms of the
joint venture agreement. The new facility was completed in December 1997. During
the 1997 growing  season,  the joint venture  harvested and produced  sufficient
seed to plant up to 500,000 acres of Deltapine  cottonseed  varieties containing
Bollgard  gene.  In 1998,  the joint venture had initial sales of enough seed to
plant up to 200,000 acres. The Copmany anticipates that the carry over inventory
will be sold in the 1999 and subsequent seasons.

In December 1997, D&M International,  LLC, announced a joint venture with Centro
Integral  Agropecuaria  ("CIAGRO"),  a distributor of agricultural inputs in the
Argentine  cotton region,  for the  production and sale of genetically  improved
cottonseed.   The  new  joint  venture,   CDM  Mandiyu,  is  owned  60%  by  D&M
International,  LLC,  and 40% by CIAGRO.  The cotton  region,  comprised  of the
Provinces of Chaco, Santiago del Estero,  Catamarca and Jujuy, presently has 2.5
million acres of cotton  requiring 21,000 tons of cotton planting seed per year.
The new venture, CDM Mandiyu S.R.L., has been producing high quality cottonseed,
integrating  CIAGRO's local market and distribution  knowledge and D&PL's cotton
breeding and production  capabilities with Monsanto's  biotechnology  expertise.
CDM  Mandiyu  has  been  licensed  to  sell  D&PL  cotton  varieties  containing
Monsanto's  Bollgard gene  technology.  Commercialization  is planned for fiscal
1999 pending final approval from certain Argentine governmental agencies. Future
plans include the production and sale of Roundup Ready cottonseed varieties.

In July 1998, D&PL China and the Anhui Provincial Seed Corporation  formed a new
joint  venture,  Anhui An Dai Cotton  Seed  Technology  Company,  Ltd,  which is
located in Hefei,  Anhui Province,  China.  Under the terms of the joint venture
agreement,  the  newly  formed  entity  will  produce,  condition  and sell acid
delinted D&PL varieties of cottonseed which contain Monsanto's Bollgard gene. In
the fall of 1998, the Company harvested sufficient seed from seed plots in Anhui
to plant up to 350,000 acres.

In November, 1998, D&M International LLC and Maeda Administracao e Participacoes
Ltda,  an  affiliate  of Agropem  Agro  Pecuria  Maeda S.A.,  formed a new joint
venture in Minas Gerais,  Brazil. The new company,  MDM Maeda Deltapine Monsanto
Algodao Ltd., will produce,  condition and sell  acid-delinted D&PL varieties of
cottonseed.  It is  anticipated  that the new  company  will  produce and delint
enough cottonseed in 1999 to plant up to 900,000 acres. The newly formed company
will  introduce  transgenic  cotton seed  varieties,  both  Bollgard and Roundup
Ready, into the Brazilian market as soon government approvals are obtained.


The  Company  reached an  agreement  with  parties in Zimbabwe in 1997 to form a
joint  venture that will provide high quality acid  delinted  seed to farmers in
Zimbabwe.  Initially,  the plant was to  continue  to process  and sell  locally
developed and owned  varieties  which will be  genetically  transformed  so they
contain  the  Bollgard  gene  technology  and  potentially  other   technologies
developed in the future.  The  introduction of these  technologies  into locally
developed germplasm is expected to provide both large commercial growers as well
as the small communal growers a significant economic advantage over those who do
not use these technologies. The Zimbabwean government has refused to approve the
joint venture  contract  without certain  changes which are  unacceptable to D&M
International,   LLC.  The  Company   believes   government   approval  will  be
forthcoming,  although  modifications to the current  agreement may be necessary
and negotiations are ongoing.

The Company's  delinting plants in South Africa and Argentina process foundation
seed grown in these countries.  The use of Southern  Hemisphere winter nurseries
and seed  production  programs such as these can accelerate the  introduction of
new  varieties  because  D&PL can  raise at least  two  crops per year by taking
advantage of the Southern  Hemisphere  growing season. In addition,  the Company
introduced  Deltapine  varieties  which contain  Bollgard in South Africa in the
fall of 1998.  Sales are ongoing and inventory  sufficient to plant up to 65,000
acres is available.

The results of operations of D&PL's wholly owned Australian  subsidiary continue
to be  disappointing.  Although the Company  began selling seed  containing  the
Bollgard gene (Ingard(TM) in Australia) in 1997,  operating  results and product
market share remain at unacceptable levels. The Company,  through its Australian
operations,  is identifying  smaller  potential export markets for the Company's
products throughout  Southeast Asia. The adaptability of the Company's germplasm
must be evaluated  before such sales can be made and the recent  instability  of
the  economies  in some of the  countries  in this region  will make  successful
market development a challenge.

NET SALES AND LICENSING FEES

In 1998,  D&PL's  consolidated  net sales and licensing  fees  increased 5.0% to
$192.3 million from 1997 sales of $183.2 million.  The increase is primarily the
result of (a)  increased  sales of  stripper  cottonseed  containing  Monsanto's
Roundup Ready gene (b) increased sales of picker cottonseed  containing both the
Bollgard  and Roundup  Ready genes,  and ( c ) the  commercial  introduction  of
soybean seed  containing  Monsanto's  Roundup Ready Gene.  These  increases were
partially offset by lower sales of picker  cottonseed  varieties  resulting from
inclement  weather  during the planting  season and commodity  prices.  The USDA
estimated that the planted cotton acreage will approximate 12.8 million acres in
1998 which is a decrease of 7.2% from 1997 cotton acres planted of 13.8 million.
Soybean  unit  sales  also  increased  8.7% over 1997 due to  increased  planted
soybean acres and market share gains by the Company's  varieties.  In 1998,  the
Company and Monsanto  changed the method used to calculate  the acres to be used
for billing  purposes for the Bollgard and Roundup Ready gene  technologies.  In
prior  years,  the farmers were billed  based on their  stated  planting  rates,
which, if within a prescribed range for a particular geographic territory,  were
used for  purposes of  calculating  the number of licensed  acres and  therefore
billable  acres.  In 1998 assumed  planting  rates were  established by D&PL and
Monsanto for seven specific  territories  and farmers were billed for the number
of  acres  that  could  be  planted  for  each  bag  of  seed  sold,  using  the
predetermined   territorial  formula.  In  1998,  total  transgenic  seed  sales
comprised approximately 60% of total domestic unit sales of cottonseed, compared
to 36% in 1997.  Roundup Ready soybean units comprised 44.0% of total units sold
in 1998 versus less than 1% in 1997.

International sales (including exports) increased 46.3% in 1998 to $21.8 million
from $14.9 million in 1997,  primarily from the initial sales derived from Hebei
Jai Dai, the joint venture in Shiujiazhuang,  Hebei, People's Republic of China.
Although the level of sales by the  Company's  first  Chinese joint venture were
below initial  estimates,  the venture may report a slight  profit in 1998,  its
first full calendar year of operation.

In 1997,  D&PL's  consolidated  net sales and licensing fees increased  19.5% to
$183.2 million,  from 1996 sales of $153.3  million.  This increase is primarily
the result of increased  Bollgard  seed sales and  licensing  fees over 1996 and
seed  sales  and  licensing  fees  received  from the first  sale of  commercial
quantities of Roundup Ready  cottonseed.  Domestic picker  cottonseed unit sales
decreased by 4.5% while domestic stripper cottonseed units increased 279.6% (due
to the  conversion of the High Plains  market)  despite a 5.4%  reduction in the
total  number of cotton  acres  planted in the U.S.  to 13.8  million  from 14.7
million.  Net billable  Bollgard acres increased to 2.4 million in 1997 from 1.8
million in 1996.  Net  billable  Roundup  Ready  acres were 0.8 million in 1997.
Soybean unit sales also  increased  40.9% over 1996 primarily due to an increase
in planted  acres  which  resulted in part from cold,  wet weather  early in the
planting  season (when cotton is typically  planted) and higher soybean  prices,
causing a shift in planted acres to soybean from cotton.

International  sales  increased to $14.9  million in 1997 from $12.6  million in
1996, primarily  attributable to licensing fees received from sales in Australia
and Mexico of cottonseed  varieties  containing  Monsanto's  Bollgard  gene, the
positive effects of which were partly offset by reduced export sales.


GROSS PROFIT

D&PL's  consolidated  gross profit after  special and  nonrecurring  charges was
$53.6 million in 1998 compared to $55.5 million in 1997.  Special pretax charges
of approximately  $17.5 million were recorded in 1998 that relate (a) additional
inventory reserves  established to provide for excess inventory resulting from a
7% reduction in planted cotton acres in 1998 and the further  realignment of the
Company's  product  line to seed  with new  technologies,  and (b) a  recall  of
certain products that did not meet the Company's quality standards. Gross margin
(expressed as a percentage of sales) before the special  charges was  consistent
between 1998 and 1997 at 36%.

D&PL's consolidated gross profit after special charges was $55.5 million in 1997
compared to $55.8 million in 1996. In 1997 the Company  recorded special charges
of $11.5 million that related to the earlier than expected  phase out of certain
products  and  other  reserves  established  for a  production  cost  and  plant
optimization  program, the negative impact of which was offset by increased unit
sales and increased  licensing fees. Gross margin  (expressed as a percentage of
sales)  before  special  charges  was  consistent   between  1997  and  1996  at
approximately 36%.

OPERATING EXPENSES

In 1998, the Company's total operating expenses increased,  as planned, to $42.2
million before  special  charges,  from $34.8 million before special  charges in
1997 and $28.6 million before special charges in 1996.  International  operating
expenses are expected to increase $1.0 million in 1999 due to new  international
ventures and other  general  expansion  while  domestic  operating  expenses are
expected to increase about $5.0 million.


RESEARCH AND DEVELOPMENT EXPENSES

Research and development  expenses increased 22.0% to $16.7 million in 1998 from
$13.7  million  in 1997.  The  increase  was  primarily  related  to  additional
transgenic costs associated with development and evaluation of new technologies,
transformation  of the  Company's  product line and  collaboration  with outside
research providers.

Research and development  expenses increased 39.8% to $13.7 million in 1997 from
$9.8  million in 1996.  The  increase  was  primarily  the result of  additional
transgenic costs associated with evaluation of new technologies,  transformation
of the Company's  Sure Grow and Paymaster  product  lines,  increased  Technical
Service Department costs,  increased  varietal testing in certain  international
markets and further  expansion  of research  programs  related to  international
activities.

SELLING EXPENSES

Selling  expenses  increased  35.8% in 1998 to $15.0 million from $11.1 in 1997.
The increase was  primarily  due to an aggressive  advertising  and  promotional
program and expansion of the international sales and marketing in China.

Selling  expenses  increased 18.1% to $11.1 million in 1997 from $9.4 million in
1996.  The increase was  primarily  due to the  expansion of sales and marketing
departments for the Paymaster Division and the International Division, primarily
in Australia.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses were essentially flat between 1998 and 1997.
General and administrative expenses increased 7.4% to $10.1 million in 1997 from
$9.4 million in 1996. The increase is primarily attributable to the expansion of
the Company's  information  systems  department,  and  additional  staff for the
International and Paymaster Divisions.

SPECIAL CHARGES AND UNUSUAL CHARGES RELATED TO ACQUISITIONS

In connection with the evaluation and pursuit of various strategic  alternatives
and  ultimately  the  planned  merger  with  Monsanto  (see Item 1), the Company
incurred in 1998 approximately  $5.1 million  associated with legal,  investment
banker  and other  professional  fees.  The  Company  also  recorded  additional
inventory reserves as discussed above.

In  connection  with the 1997  production  and cost  optimization  program,  the
Company  recorded a special  charge of $19.0  million of which $11.5 million was
included in cost of sales and $7.5 million was  included in operating  expenses.
These  charges  include  costs  associated  with the plan to optimize  operating
efficiencies,  plant  consolidation  costs, costs to phase out certain products,
the write down of assets  whose value has been  impaired as a result of the plan
and, to a lesser extent, severance costs.

In connection with the merger with the Sure Grow Companies, the Company recorded
special  charges of  approximately  $1.7  million  during  fiscal 1997 for costs
associated  with this  transaction  including legal costs incurred in connection
with the U. S. Department of Justice's review of that transaction.

INTEREST EXPENSE

Interest  expense  increased  47.0% to $3.2 million in 1998 from $2.2 million in
1997. The increase was primarily due to higher outstanding borrowings throughout
the year used to finance international ventures and higher inventory levels, the
effects which were partially offset by lower interest rates.

Interest  expense  decreased  8.3% to $2.2  million in 1997 from $2.4 million in
1996  due  primarily  to  lower  interest  rates  partially   offset  by  higher
outstanding borrowings.

OTHER

In 1996, 1997 and 1998, other income included  primarily gains on sales of fixed
assets and accounts payable discounts received for early payments.

NET INCOME AND EARNINGS PER SHARE

Net  income  applicable  to  common  shares  decreased  by 74.0% in 1998 to $1.8
million from $6.9 million in 1997,  and  decreased by 88.3% from 1996 net income
of $15.2 million. Net income per share (basic) before special charges was $0.41,
$0.58,  and $0.43 in 1996,  1997 and 1998,  respectively.  Net  income per share
(basic)  after special  charges was $0.41,  $0.18,  and $0.05 in 1996,  1997 and
1998,  respectively.  The number of shares deemed  outstanding for those periods
increased  because of the exercise of stock option  grants  pursuant to the 1993
Stock Option Plan and the 1995 Long-Term Incentive Plan. Furthermore, the effect
of all stock splits are included in all earnings per share calculations.

LIQUIDITY AND CAPITAL RESOURCES

The seasonal nature of the Company's  business  significantly  impacts cash flow
and working capital requirements.  The Company maintains credit facilities, uses
early  payments  by  customers  and uses cash from  operations  to fund  working
capital needs. For more than 17 years D&PL has borrowed on a short-term basis to
meet seasonal working capital needs.

D&PL  purchases  seed from  contract  growers  in its 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
borrowings  normally  commence in the first fiscal quarter and peak in the third
fiscal quarter. Loan repayments normally begin in the middle of the third fiscal
quarter and are typically completed by the first fiscal quarter of the following
year. D&PL also offers distributors, dealers and farmers financial incentives to
make early payments. In fiscal 1998, D&PL received approximately $5.0 million in
early payments. To the extent D&PL attracts early payments from customers,  bank
borrowings under the credit facility are reduced.

The Company records receivables for licensing fees on Bollgard and Roundup Ready
seed sales as the seed is  shipped,  usually in the  Company's  second and third
quarters.  The Company has contracted the billing and collection  activities for
Bollgard  and Roundup  Ready  licensing  fees to  Monsanto.  In  September,  the
technology fees are due at which time D&PL receives payment from Monsanto.  D&PL
then pays  Monsanto  its royalty for the Bollgard  and Roundup  Ready  licensing
fees.

In April 1998, the Company  entered into a syndicated  credit  facility with its
existing  lender  and  two  other  financial  institutions  which  provides  for
aggregate borrowings of $110 million.  This agreement provides a base commitment
of $55 million and a seasonal commitment of $55 million.  The base commitment is
a long-term loan that may be borrowed upon at any time and is due April 1, 2001.
The seasonal  commitment  is a working  capital loan that may be drawn upon from
September 1 through June 30 of each fiscal year and expires April 1, 2001.  Each
commitment  offers  variable  and fixed  interest  rate options and requires the
Company to pay facility or commitment fees and to comply with certain  financial
covenants.  At August 31,  1998,  the Company  had $9.0  million  available  for
borrowing under the base commitment.  In addition the lead lender has approved a
$25.0 million credit line that can be activated by the Company as needed.

The financial  covenants under the loan  agreements  require the Company to: (a)
maintain a ratio of total  liabilities  to  tangible  net worth at August 31, of
less than or equal to 2.25 to 1 (4.0 to 1.0 at the Company's other quarter ends)
(b) maintain a fixed  charge  ratio at the end of each  quarter  greater than or
equal to 2.0 to 1.0 and ( c ) maintain  at all times  tangible  net worth of not
less  than the sum of (i) $40  million , plus  (ii) 50% of net  income  (but not
losses)  determined as the last day of each fiscal year,  commencing with August
31,  1998.  At August  31,  1998 the  Company's  ratio of total  liabilities  to
tangible net worth  exceeded the permitted  ratio.  The  financial  institutions
waived  compliance  with this covenant.  See Note 4 of the Notes to Consolidated
Financial Statements.

Capital  expenditures  were $16.0  million,  $16.5  million and $10.2 million in
fiscal  1996,  1997  and  1998,  respectively.  The  1996  expenditures  exclude
acquisitions which aggregated $2.2 million The Company anticipates that domestic
capital  expenditures will approximate $7.0 million in 1999,  excluding expected
capital  expenditures  for foreign joint  ventures  which will be funded by cash
from  operations,  borrowings or  investments  from joint venture  partners,  as
necessary.  Capital expenditures in 1999 for international ventures are expected
to range from $6.0 million to $8.0  million  depending on the timing and outcome
of such projects.

Cash provided from  operations,  early  payments from  customers and  borrowings
under the loan agreement should be sufficient to meet the Company's 1999 working
capital needs.

RISKS AND UNCERTAINTIES

From time to time, the Company may publish  forward-looking  statements relating
to  such  matters  as  anticipated  financial  performance,  existing  products,
technical  developments,  new  products,  research and  development  activities,
preparation for year 2000 issues,  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,  the Company
notes that a variety of factors  could cause the  Company's  actual  results and
experience  to  differ   materially  from  the  anticipated   results  or  other
expectations expressed in the Company's  forward-looking  statements.  The risks
and uncertainties that may affect the operations,  performance,  development and
results of the Company's business include those noted elsewhere in this Item and
the following:

      D&PL's  contemplated  merger  with  Monsanto  is  subject  to  shareholder
      approval as well as approval by  government  agencies.  The  inability  to
      complete this merger may have a material  effect on the Company.  However,
      such effect cannot be known at this time.

     Demand for D&PL's seed will continue to be affected by government  programs
     and, most  importantly,  by weather.  Demand for seed is also influenced by
     commodity  prices and the demand for a crop's  end-uses  such as  textiles,
     animal feed,  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 D&PL  varieties  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.  The Company's
     seed  products may encounter  substantial  competition  from  technological
     advances  by others  or  products  from new  market  entrants.  Many of the
     Company's  competitors  are,  or are  affiliated  with,  large  diversified
     companies that have substantially greater resources than the Company.

      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.  Particular  policies  which  may  affect  the  international
      operations  of  D&PL  include  the  testing  and   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 the Company's
      international operations.

     Overall  profitability  will  depend  on  weather  conditions,   government
     policies in all  countries  where the  Company  sells  products,  worldwide
     commodity   prices,   the  Company's   ability  to  successfully  open  new
     international  markets,  the  Company's  ability to  successfully  continue
     development of the 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 the Company are
     working  and  the  Company's  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.

     Due to the varying  levels of  agricultural  and social  development of the
     international  markets in which the Company operates and because of factors
     within  the  particular  international  markets  targeted  by the  Company,
     international  profitability  and growth may be less stable and predictable
     than domestic profitability and growth have been in the past.

Implementation of Financial Accounting Standards

SFAS No. 130, "Reporting  Comprehensive  Income,"  establishes new standards for
reporting comprehensive income and its components (revenues, expenses, gains and
losses) in financial  statements.  This  statement is effective for fiscal years
beginning  after  December  15,  1997.  The  Company  will adopt the  disclosure
requirements of SFAS No. 130 beginning in fiscal 1999.

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information," establishes standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports issued to shareholders.  This statement is
effective for financial  statements  for periods  beginning  after  December 15,
1997. The Company will not be affected by this statement,  because it is in only
one line of business.

SFAS No. 132,  "Employers'  Disclosures about Pensions and Other  Postretirement
Benefits," revises employers' disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans.
This statement is effective for fiscal years  beginning after December 15, 1997.
The Company will adopt the disclosure  requirements of SFAS No. 132 beginning in
fiscal 1999.

SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
establishes  accounting and reporting standards for the derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging  activities.  This  statement  is effective  for all fiscal  quarters of
fiscal years  beginning  after June 15,  1999.  The Company is in the process of
determining the effects of adopting of SFAS No. 133 on its financial statements.





<PAGE>

ITEM 8.       CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY
              DATA

                                      INDEX

Financial Statements                                                     Page(s)

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

       Report of Independent Public Accountants...............................19

   Consolidated Statements of Income - for each of the three years in the
          period ended August 31, 1998........................................20

     Consolidated Balance Sheets - August 31, 1997 and 1998...................21

     Consolidated Statements of Cash Flows - for each of the
       three years in the period ended August 31, 1998........................22

     Consolidated Statements of Stockholders' Equity - for each of the 
       three years in the period ended August 31, 1998........................23

     Notes to Consolidated Financial Statements...............................24








<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


TO DELTA AND PINE LAND COMPANY:

We have audited the accompanying  consolidated  balance sheets of DELTA AND PINE
LAND COMPANY (a Delaware corporation) and subsidiaries as of August 31, 1997 and
1998,  and the  related  consolidated  statements  of  income,  cash  flows  and
stockholders'  equity for each of the three years in the period ended August 31,
1998.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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, 1997 and 1998, and the results of its
operations  and its cash flows for each of the three  years in the period  ended
August 31, 1998, in conformity with generally accepted accounting principles.



Arthur Andersen LLP

Memphis, Tennessee,
October 16, 1998.






<PAGE>

MANAGEMENT'S REPORT:

The Company is  responsible  for preparing the financial  statements and related
information  appearing in this report.  Management  believes  that the financial
statements  present  fairly the  Company's  financial  position,  its results of
operations and its cash flows in conformity with generally  accepted  accounting
principles.  In preparing its financial  statements,  the Company is required to
include amounts based on estimates and judgments that it believes are reasonable
under the circumstances.

The  Company  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 the Company's  financial
statements  through its Audit  Committee,  which is composed solely of directors
who are not Company  officers or employees.  The Audit  Committee meets at least
annually with the independent public accountants and management. The independent
public  accountants have direct access to the Audit Committee,  with and without
the presence of management representatives.

                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
<TABLE>
<CAPTION>

FOR THE YEARS ENDED AUGUST 31,                                    1996         1997         1998
                                                                 ------       ------       ------
<S>                                                              <C>          <C>          <C>    
NET SALES AND LICENSING FEES                                    $153,271     $183,249     $192,339

COST OF SALES                                                    (97,477)    (116,289)    (121,246)
SPECIAL CHARGES                                                     --        (11,500)     (17,527)
                                                                 --------     --------     --------
GROSS PROFIT                                                      55,794       55,460       53,566
OPERATING EXPENSES:
   RESEARCH AND DEVELOPMENT                                        9,794       13,651       16,656
   SELLING                                                         9,435       11,053       15,006
   GENERAL AND ADMINISTRATIVE                                      9,383       10,136       10,501
   SPECIAL CHARGES AND UNUSUAL CHARGES RELATED TO ACQUISITIONS     1,418        9,200        5,135
                                                                 --------     --------     --------
                                                                  30,030       44,040       47,298
                                                                 --------     --------     --------
OPERATING INCOME                                                  25,764       11,420        6,268
INTEREST EXPENSE, NET                                             (2,418)      (2,204)      (3,241)
OTHER                                                                383          463          159
                                                                 --------     --------     --------
INCOME BEFORE INCOME TAXES                                        23,729        9,679        3,186
PROVISION FOR INCOME TAXES                                        (8,453)      (2,766)      (1,307)
                                                                 --------     --------     --------
NET INCOME                                                        15,276        6,913        1,879
DIVIDENDS ON PREFERRED STOCK                                         (39)         (63)         (96)
                                                                 --------     --------     --------
NET INCOME APPLICABLE TO COMMON SHARES                         $  15,237    $   6,850    $   1,783
                                                                 ========     ========     ========

BASIC EARNINGS PER SHARE                                       $    0.41    $    0.18    $    0.05
                                                                 ========     ========     ========

WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - BASIC                         37,292       37,579       38,011
                                                                 ========     ========    ========
DILUTED EARNINGS PER SHARE                                     $    0.39    $    0.17    $    0.04
                                                                 ========     ========     ========
WEIGHTED AVERAGE NUMBER OF SHARES
   USED IN PER SHARE CALCULATIONS - DILUTED                       39,264       39,863       40,573
                                                                 ========     ========     ========
</TABLE>


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



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



<TABLE>
<CAPTION>

ASSETS                                                                                                1997                   1998
                                                                                                   ------------            ---------

CURRENT ASSETS:
<S>                                                                                            <C>                    <C>          
  Cash and cash equivalents                                                                    $       1,890          $       8,062
  Receivables, net of allowance of $281 and $369                                                      95,437                104,779
  Inventories                                                                                         42,886                 50,497
  Prepaid expenses                                                                                     2,167                  1,194
  Income taxes receivable                                                                               --                    5,562
  Deferred income taxes                                                                                3,069                  4,408
                                                                                               -------------          -------------

      Total current assets                                                                           145,449                174,502
                                                                                               -------------          -------------
PROPERTY, PLANT AND EQUIPMENT, net                                                                    63,022                 66,840

EXCESS OF COST OVER NET ASSETS OF
    BUSINESSES ACQUIRED, net of accumulated amortization of $243 and $369                              4,689                  4,583
INTANGIBLES, net of accumulated amortization of $475 and $543                                          3,674                  3,488
OTHER ASSETS                                                                                           3,822                  2,378
                                                                                               -------------          -------------

TOTAL ASSETS                                                                                   $     220,656          $     251,791
                                                                                               =============          =============


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable                                                                                $         259          $       1,263
  Accounts payable                                                                                    19,113                 22,831
  Accrued expenses                                                                                    91,196                 92,042
  Income taxes payable                                                                                 1,956                   --
                                                                                               -------------          -------------
        Total current liabilities                                                                    112,524                116,136
                                                                                               -------------          -------------

LONG-TERM DEBT                                                                                        30,572                 47,070
DEFERRED INCOME TAXES                                                                                  4,038                  5,020
COMMITMENTS AND CONTINGENCIES (Notes 7 and 11)
MINORITY INTEREST IN SUBSIDIARIES                                                                        991                  2,914
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;
      429,319 shares authorized; no shares issued or outstanding                                        --                     --
      Series M Convertible Non-Voting Preferred, par value $0.10 per share;
      1,066,667 shares authorized;  800,000 shares issued and outstanding                                 80                     80
  Common  stock,  par value  $0.10 per  share; 100,000,000 shares  authorized;
      37,724,116 and 38,469,617 shares issued; 37,609,849,
       and 38,355,350 shares outstanding                                                               3,772                  3,847
                                                                                                                             
  Capital in excess of par value                                                                      22,865                 35,867
  Retained earnings                                                                                   48,894                 46,109
  Cumulative foreign currency translation adjustments                                                   (907)                (3,079)
  Treasury stock at cost (114,267 shares in 1997 and 1998)                                            (2,173)                (2,173)
                                                                                               -------------          -------------
       Total stockholders' equity                                                                     72,531                 80,651
                                                                                               -------------          -------------
       Total liabilities and stockholders' equity                                              $     220,656          $     251,791
                                                                                               =============          =============
</TABLE>

The  accompanying  notes  are an  integral  part of these  consolidated  balance
sheets.
<PAGE>



                  DELTA AND PINE LAND COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                         FOR THE YEARS ENDED AUGUST 31,
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                       1996                1997              1998
                                                                                      -------            --------           --------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                  <C>                <C>                <C>     
   Net income                                                                        $ 15,276           $  6,913           $  1,879
   Adjustments to reconcile net income to net
     cash (used in) provided by operating activities:
        Depreciation and amortization                                                   4,026              5,060              6,654
        Noncash items associated with special charges                                    --               12,242              9,865
        Minority interest in subsidiaries                                                --                  991              1,923
        Decrease in deferred income taxes                                                (220)               (12)              (357)
        Changes in current assets and liabilities:
         Receivables                                                                  (62,161)           (28,787)            (9,342)
         Inventories                                                                  (20,984)            (5,255)           (17,476)
         Prepaid expenses                                                                (207)              (804)               973
         Accounts payable                                                               6,828              4,159              3,718
         Accrued expenses                                                              43,675             31,195                846
         Income taxes                                                                  (3,283)            (1,382)            (7,518)
         Decrease in intangible and other assets                                          321                416                157
                                                                                     --------           --------           --------

         Net cash  (used in) provided by operating activities                         (16,729)            24,736             (8,678)
                                                                                     --------           --------           --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                                                 (15,960)            (16,454)          (10,242)
  Acquisition of business                                                              (1,035)              --                 --
  Sale of investments and property                                                        607               --                1,350
                                                                                     --------           --------           --------

         Net cash used in investing activities                                        (16,388)           (16,454)            (8,892)
                                                                                     --------           --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of short-term debt                                                        (30,133)           (31,226)           (35,190)
   Payments of long-term debt                                                         (11,300)           (20,893)            (7,930)
   Dividends paid                                                                      (2,332)            (3,023)            (4,664)
   Proceeds from long-term debt                                                        32,433             20,000             24,428
   Proceeds from short-term debt                                                       32,190             28,890             36,193
   Purchase of common stock                                                              --               (2,173)              --
   Proceeds from exercise of stock options
     and tax benefit of stock option exercises                                          4,984              2,135             13,077
                                                                                     --------           --------           --------
         Net cash provided by (used in) financing activities                           25,842             (6,290)            25,914
                                                                                     --------           --------           --------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                   (7,275)             1,992              8,344
EFFECTS OF FOREIGN CURRENCY TRANSLATION LOSSES                                           --                 (662)            (2,172)
CASH AND CASH EQUIVALENTS, beginning of year                                            8,192                560              1,890
NET DECREASE IN CASH IN TRANSITION PERIOD (Note 12)                                      (357)              --                 --
                                                                                     --------           --------           --------

CASH AND CASH EQUIVALENTS, end of year                                               $    560           $  1,890           $  8,062
                                                                                     ========           ========           ========

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid, net of capitalized interest                                        $  2,400           $  2,000           $  3,500
   Income taxes paid                                                                 $  9,400           $  4,600           $  2,600
</TABLE>

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






<PAGE>


                           DELTA AND PINE LAND COMPANY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               FOR THE YEARS ENDED AUGUST 31, 1996, 1997 AND 1998     
                       (In thousands, except share data)        


<TABLE>
<CAPTION>

                                                                                                         Cumulative     
                                                                                                         Foreign
                                                                           Capital in                    Currency
                                               Preferred      Common        Excess of       Retained     Translation      Treasury
                                                 Stock        Stock           Par           Earnings     Adjustments       Stock
                                                                             Value

<S>                                             <C>            <C>           <C>            <C>                <C>            <C>
Balance at August 31, 1995                      $ --           $3,708        $11,004        $32,751            $397           $--
Cash dividends, $0.062 per share                  --             --             --           (2,332)             --            --
Net income                                        --             --             --           15,276              --            --
Exercise of stock options and
  tax benefit of stock option exercises           --             48            4,936           --                --            --
Series M Convertible
  preferred stock issuance                        80             --            4,806           --                --            --
Net loss applicable to
  transition period of acquired                   
  companies (Note 12)                             --             --             --             (691)             --            --
Foreign currency translation adjustment           --             --             --             --              (642)           --
                                              --------       --------       --------       --------         --------       --------
Balance at August 31, 1996                        80            3,756         20,746         45,004            (245)           --
Cash dividends, $0.078 per share                  --             --             --           (3,023)             --            --
Net income                                        --             --             --            6,913              --            --
Exercise of stock options and
  tax benefit of stock option exercises           --             16            2,119           --                --            --
Foreign currency translation adjustment           --             --             --             --              (662)           --
Purchase of common stock                          --             --             --             --               --           (2,173)
                                              --------       --------       --------       --------         --------       --------
Balance at August 31, 1997                        80            3,772         22,865         48,894            (907)
                                                                                                                             (2,173)
Cash dividends, $0.12 per share                   --             --             --           (4,664)             --            --
Net income                                        --             --             --            1,879              --            -- 
Exercise of stock options and
  tax benefit of stock option exercises           --             75           13,002           --                --             --
Foreign currency translation adjustment           --             --             --             --            (2,172)            --
                                               --------       --------       --------       --------         --------       --------
Balance at August 31, 1998                    $   80         $  3,847       $ 35,867       $ 46,109        $ (3,079)       $ (2,173)
                                               ========       ========       ========       ========         ========       ========
</TABLE>

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


<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Merger with Monsanto Company

On May 8, 1998,  the  Company  entered  into a merger  agreement  with  Monsanto
Company  ("Monsanto"),  pursuant to which the  Company  would be merged with and
into  Monsanto.  This  agreement  is subject to the  approval  of the  Company's
stockholders.  Under terms of the agreement, the Company's stockholders would be
entitled to receive  0.8625  shares of  Monsanto's  Common Stock in exchange for
each  share of Delta and Pine Land  stock  they  hold.  In  connection  with the
evaluation of various strategic  alternatives including the contemplated merger,
the  Company,  in 1998  incurred  legal fees,  investment  banker fees and other
professional  fees  approximating  $5.1 million,  which are included in "Special
Charges and Unusual Charges related to Acquisitions."

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. In connection
with its seed operations,  the Company farms approximately 2,600 acres,  largely
for the production of cotton and soybean foundation seed.

The Company  has annual  agreements  with  various  growers to produce  seed for
cotton and  soybeans.  The  growers  plant seed  purchased  from the Company 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, the
Company 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.
The Company 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.  The  reported  results  for 1996 and 1997
include the results of operations of Arizona  Processing,  Inc.,  Ellis Brothers
Seed, Inc. and Mississippi Seed, Inc., which own Sure Grow Seed, Inc. (the "Sure
Grow Companies" or "Sure Grow"),  with which the Company merged in May 1996 in a
pooling-of-interests  transaction.  The acquired companies were on a fiscal year
ending  June 30. As of August  31,  1996,  the fiscal  year end of the  acquired
companies  was  changed to August 31. The net loss in the  two-month  transition
period  from July 1, 1996 to August  31,  1996 is shown as a single  line in the
Consolidated  Statements  of  Stockholders'  Equity.  Significant  inter-company
accounts and transactions have been eliminated in consolidation.

Special Charges

In 1997,  D&PL  announced a production  and cost  optimization  program aimed to
improve  plant  operating  efficiencies.  The Company  recorded a $19.0  million
charge in its fourth quarter for the estimated costs  associated with this plan,
of which  $11.5  million was  recorded as a component  of Cost of Sales and $7.5
million  was  included  in  Special  Charges  and  Unusual  Charges  Related  to
Acquisitions.  This special charge included costs  associated with the idling of
three plants,  the write down of fixed  assets,  plant  consolidation  costs and
costs associated with the phase out of certain products.

In  1996,  the  Company  commenced  commercial  sale  of  cottonseed  containing
Monsanto's  Bollgard  gene  and  in  1997,  the  Company  commenced   commercial
cottonseed  sales  containing  Monsanto's  Roundup  Ready  gene.  As a result of
inserting  these genes into the Company's  existing  product line, the number of
stock keeping units increased significantly. In June 1997, the Company commenced
a review and  evaluation of the Company's  product line and of the efficiency of
its  cottonseed  delinting  facilities to determine what steps could be taken to
reduce overhead and production costs by reorganizing  and/or  consolidating  the
Company's seed processing into a fewer number of plants.  Management  determined
that a reduction in the number of existing varieties and those under development
for  planned  future  commercial  launch  would be  necessary  so the  number of
processing plants could similarly be reduced. Therefore,  management elected (i)
to discontinue  offering  certain  products that were previously  expected to be
offered  for  sale for the next  several  years,  (ii)  accelerate  the  planned
discontinuance  of other  products  and  (iii)  reduce  the  number  and rate of
introduction of certain new varieties.  Separately,  in connection with the Sure
Grow Seed acquisition in 1996, three additional  delinting facilities were added
to the overall capacity of the Company. The decision to reduce the overall stock
keeping  units  further  decreased  the volume of production at the three plants
being closed;  decreased their  efficiency;  and increased the cost of inventory
produced  at these  facilities.  In June of 1997,  management  and the  Board of
Directors adopted a formal plan of  reorganization,  and determined that certain
products would be phased out over an anticipated period of three years and three
delinting  facilities  would be closed  immediately.  Based on estimated  future
inventory  levels  needed by the Company,  management  established  reserves for
certain  excess  and  obsolete  varieties,  reduced  certain  varieties  to  net
realizable  value due to inefficient  operations and excess  capacity  discussed
above, bought out certain grower contracts for varieties being phased out, wrote
down the value of excess  facilities in accordance  with SFAS 121 and recorded a
charge for employees affected by the closing of the excess facilities.

The Company continues to use the warehouse  facilities  situated adjacent to the
delinting  plants  that  were  idled.  The  plants  will be held to meet  future
production needs if they arise.



<PAGE>


For the year ended August 31, 1997,  the  components of the  production and cost
optimization program consisted of the following items and amounts.


<TABLE>
<CAPTION>

                                                                             in 000's
                                                                             -------- 
                                                                Cost of Sales       Operating Expenses
                                                                -------------       ------------------
<S>                                                                <C>                  <C>   
Write-down of delinting facilities                                    -                 $4,500
Plant consolidation costs, including severance                        -                  2,500
Idling of Scott, Mississippi, Tunica, Mississippi and 
        Centre, Alabama Plants                                        -                    500
Contract cancellation costs due to reduction of varieties           $3,000                  -
Write down existing inventory to net realizable value                4,500                  -
Reserve for expected discontinuance of varieties                     4,000                  -
                                                                   --------             --------
                                                                   $11,500              $7,500
                                                                   =========            ========
</TABLE>
  

In 1998,  the  Company  recorded  special  and  nonrecurring  pretax  charges of
$22,662,000  that relate to additional  inventory  reserves and costs related to
evaluation  of  various   strategic   alternatives   which   culminated  in  the
contemplated merger with Monsanto. The unprecedented level of inventory reserves
and write- offs were a result of excess inventory quantities resulting from a 7%
reduction in acreage and the further  realignment of the Company's product line.
The accelerated shift to transgenic products significantly complicates inventory
management and product line design and will require continued  dedicated efforts
to  effectively  manage the  Company's  ever changing  product  line.  The costs
related to the merger are primarily  fees for legal advice,  investment  bankers
and other professionals.

In connection  with the 1996  acquisitions  of the Sure Grow Companies and Hartz
Cotton,  Inc.,  (See Note 12), the Company  recorded  charges  anticipated to be
nonrecurring  of  approximately  $1.4 million and $1.7  million for  transaction
costs in 1996 and 1997, respectively. These costs primarily include professional
fees  (including  costs related to the U.S.  Department of Justice review of the
Sure Grow  acquisition) and are included in "Special Charges and Unusual Charges
Related to Acquisitions" in the accompanying Consolidated Statements of Income.

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  was  purchased  as  part of the
Paymaster  and  Hartz   acquisitions   and  includes  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 and Deferred Charges 

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  are  being  amortized  using the
straight-line method over 40 years.  Organization costs for foreign ventures are
amortized over five years.

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.  Financial  statements  of foreign  entities  in highly-
inflationary  economies are translated as though the functional  currency is the
United  States  currency.  Translation  adjustments  are  reported as a separate
component of stockholders'  equity.  Gains and losses from foreign  transactions
are included in earnings.

Income Taxes

The Company 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.

Fair Value of Financial Instruments

The fair  value of the  Company's  financial  instruments  at  August  31,  1998
approximates their carrying value.

Revenue Recognition

Domestic  revenues from the sale of planting seed,  less estimated  reserves for
returns,  are recognized  when the seed is shipped.  International  revenues are
recognized  upon the later of either when the seed is shipped or when letters of
credit are cleared.  Revenues from farm  operations  are  recognized at the time
crops are harvested and sold.  Costs incurred in producing crops are included as
inventory  until  these  two  events  occur.  Revenues  from   commercialization
agreements  and  royalties  are  recognized  when earned and are included in net
sales and licensing  fees.  Revenues  from Bollgard and Roundup Ready  licensing
fees (net of estimated  distributor and dealer commissions) are recognized based
on the number of acres  expected  to be planted  with such seed when the seed is
shipped and are recorded as sales.  Royalties due to licensors of technology are
recorded as cost of sales.

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.

Derivative Financial Instruments

The Company uses futures and option contracts for its soybean hedging program to
effectively  fix the  cost  of a  significant  portion  of its  soybeans.  These
contracts are accounted for on a settlement  basis, with the net amounts paid or
received  under such  contracts  included in the cost of soybeans.  Open futures
contracts and the underlying soybean inventory are marked to market. The Company
does not terminate  contracts prior to their expiration.  The amount of deferred
losses  associated  with the soybean  hedging program at August 31, 1998 was not
material. The Company does not speculate in derivatives.

Impairment of Assets

D&PL assesses  recoverability  and  impairment  of  intangible  assets and other
long-lived assets whenever events or changes in circumstances  indicate that the
carrying  amount may not be  recoverable.  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  in  accordance  with SFAS No.  121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of".  Otherwise,  an  impairment  loss is not  recognized,  and D&PL
continues  to  amortize  its  intangible  assets and other  assets  based on the
remaining estimated useful life.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 income and expenses during the reporting period.  Actual
results could differ from those estimates.

Reclassifications

Certain 1996 and 1997 balances have been  reclassified  to conform with the 1998
presentation.

Implementation of Financial Accounting Standards

SFAS No. 130, "Reporting  Comprehensive  Income,"  establishes new standards for
reporting comprehensive income and its components (revenues, expenses, gains and
losses) in financial  statements.  This  statement is effective for fiscal years
beginning  after  December  15,  1997.  The  Company  will adopt the  disclosure
requirements of SFAS No. 130 beginning in fiscal 1999.

SFAS  No.  131,  "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information," establishes standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports issued to shareholders.  This statement is
effective for financial  statements  for periods  beginning  after  December 15,
1997. The Company will not be affected by this statement,  because it is in only
one line of business.

SFAS No. 132,  "Employers'  Disclosures about Pensions and Other  Postretirement
Benefits," revises employers' disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans.
This statement is effective for fiscal years  beginning after December 15, 1997.
The Company will adopt the disclosure  requirements of SFAS No. 132 beginning in
fiscal 1999.

SFAS No. 133,  "Accounting for Derivative  Instruments and Hedging  Activities,"
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging  activities.  This  statement  is effective  for all fiscal  quarters of
fiscal years  beginning  after June 15,  1999.  The Company is in the process of
determining the effects on its financial statements of adopting of SFAS No. 133.

2.   INVENTORIES

                                                                               
Inventories at August 31, consisted of the following:



                          1997                        1998
 Finished goods       $ 28,114,000             $  45,121,000
 Raw materials          16,121,000                14,036,000
 Growing crops             300,000                   586,000
 Supplies                  876,000                   676,000
                           -------                   -------
                        45,411,000                60,419,000
 Less reserves          (2,525,000)               (9,922,000)
                        ------------             -----------
                      $ 42,886,000             $  50,497,000
                        ============           =============


Substantially  all finished  goods and raw  material  inventory is valued at the
lower of average  cost or market.  Growing  crops and  supplies  are recorded at
cost.

3.   PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at August 31, consisted of the following:


                                               1997                 1998
                                            -------------        ----------

 Land and improvements                      $ 4,360,000        $ 4,437,000
 Buildings and improvements                  32,425,000         35,849,000
 Machinery and equipment                     32,734,000         38,530,000
 Germplasm                                    7,500,000          7,500,000
 Breeder and Foundation seed                  2,000,000          2,000,000
 Construction in progress                     8,276,000          5,650,000
                                              ---------          ---------
                                             87,295,000         93,966,000
 Less accumulated depreciation              (24,273,000)       (27,126,000)
                                            ------------       ------------
                                           $ 63,022,000       $ 66,840,000
                                            ============       ============


The special  charge  described in Note 1 includes a pre-tax charge of $3,500,000
to record asset impairments in conjunction with the 1997  optimization  program.
Such amounts are reflected in the above table.

4.     NOTES PAYABLE AND LONG-TERM DEBT

The Company has a syndicated  credit facility with three financial  institutions
which provide for aggregate unsecured  borrowings of $110 million which includes
a base commitment of $55 million and a seasonal  commitment of $55 million.  The
base commitment is a long-term loan that may be borrowed upon at any time and is
due April 1, 2001. The seasonal commitment is a working capital loan that may be
drawn upon from  September 1 through June 30 of each fiscal year and expires May
1, 2001.  Each  commitment  offers  variable and fixed interest rate options and
requires  the  Company to pay  facility  or  commitment  fees and to comply with
certain financial covenants. The interest rate charged for each loan is based on
LIBOR  plus 35 to 55  basis  points  depending  on the  achievement  of  certain
financial  ratios.  The combined  average interest rate was 6.1% and 6.0% during
1997 and 1998, respectively.

The  financial  covenants  require the Company to: (a) maintain a ratio of total
liabilities to tangible net worth at August 31, of less than or equal to 2.25 to
1 (4.0 to 1.0 at the Company's  fiscal quarter ends) (b) maintain a fixed charge
ratio at the end of each  quarter  greater than or equal to 2.0 to 1.0 and ( c )
maintain  at all  times  tangible  net worth of not less than the sum of (i) $40
million , plus (ii) 50% of net income (but not losses) determined as of the last
day of each fiscal year,  commencing  with August 31, 1998.  At August 31, 1998,
the Company's  ratio of total  liabilities to tangible net worth was 2.4 to 1.0,
which exceeds the permitted ratio. The lenders have waived  compliance with this
covenant.

5.   ACCRUED EXPENSES

Accrued expenses at August 31, consisted of the following:
<TABLE>
<CAPTION>

                                                             1997                1998
                                                             -------             ----

<S>                                                    <C>                 <C>          
 Sales returns and allowances                          $  6,268,000        $   8,996,000
 Payroll                                                  2,484,000            2,067,000
 Bollgard and Roundup Ready
    royalties due Monsanto                               71,619,000           68,754,000
 Special charges related to optimization program          5,122,000               -
 Other accrued expenses                                   5,703,000           12,225,000
                                                          ---------           ----------

                                                       $ 91,196,000        $  92,042,000
                                                       ============        =============
</TABLE>


Accrued  special  charges  related to the  optimization  program  included costs
associated with the idling of three plants,  plant consolidation costs and costs
associated with certain  terminated  contracts.  The full amount of this accrual
was used in 1998 for its intended purposes.

6.   INCOME TAXES

The provisions for income taxes for the years ended August 31,  consisted of the
following:
<TABLE>
<CAPTION>

                                         1996                   1997                    1998
                                    ---------------       --------------          --------------

<S>                                    <C>                  <C>                   <C>    
         Current-
           Federal                       $7,520,000            $2,622,000            $   970,000
           State                          1,153,000                65,000                 39,000
         Deferred                          (220,000)               79,000                298,000
                                   -----------------       --------------          -------------
                                         $8,453,000            $2,766,000             $1,307,000
                                    ===============           ===========            ===========
</TABLE>


The differences  between the statutory Federal income tax rate and the effective
rate are as follows:
<TABLE>
<CAPTION>

                                                               1996         1997         1998
                                                               ----         ----         ----

<S>                                                           <C>           <C>          <C>  
         Statutory rate                                       35.0%         35.0%        35.0%
         Increases (decreases) in tax resulting from:
            State taxes, net of federal tax benefit            3.1           2.0           2.2
            Research and development tax credits                -           (3.4)        (19.3)
            Tax effects resulting from non deductible costs
                and foreign activities                          -           (2.2)        (20.3)
            Other                                              (2.5)        (2.8)          2.8
                                                              ------       ------        ------
         Effective rate                                        35.6%        28.6%         41.0%
                                                              ======       ======       =======
</TABLE>

The components of deferred income taxes at August 31, are as follows:


Deferred tax assets:
                                                   1997                1998
                                                 ----------         ---------
        Inventory                                $2,368,000      $  4,259,000
        Charitable contributions                    403,000           270,000
        Intangibles                                    -              312,000
        Other                                       298,000           149,000
                                                 ----------         ---------
                                                  3,069,000         4,990,000
                                                 ----------         ---------
Deferred tax liabilities:

        Deferred inventory                         (393,000)          (532,000)
        Property                                 (2,407,000)        (4,735,000)
        Intangibles                                (590,000)             -
        Other                                      (648,000)          (335,000)
                                                 -----------        -----------
                                                 (4,038,000)        (5,602,000)
                                                 -----------        -----------
        Net deferred income taxes              $   (969,000)      $   (612,000)
                                                =============     =============

To date the Company's foreign subsidiaries and joint ventures have not generated
taxable  income,  and,  for this  reason,  no taxes  are  provided  for  foreign
operations.

7.   LEASES

The  Company  leases  real  estate  and  machinery  and  equipment  used  in its
operations.  Substantially  all rent  expense is recorded as cost of sales.  The
Company has no capital  leases.  Future minimum rental payments after 1998 under
operating leases with initial or remaining noncancellable terms in excess of one
year are as follows:

                                            1999    $   211,000
                                            2000        156,000
                                            2001        109,000
                                            2002         33,000
                                            2007         16,000

Rent  expense  including  land  rent  approximated  $1,382,000,  $2,265,000  and
$3,101,000 in 1996, 1997 and 1998, respectively.

8. 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.  Plan  assets  consist
primarily of U.S.  government  securities and common stock and are managed by an
independent   portfolio  manager.  The  Company'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.

Effective  January  15,  1992,  the  Company  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.

The measurement of Plan and SERP assets and obligations was performed as of June
30. The  following  sets forth the Plan's and SERP's  funded  status and amounts
recognized in the Company's financial statements as of August 31:

<TABLE>
<CAPTION>

          PLAN:                                                   1997            1998
                                                               -----------      -----------
<S>                                                            <C>              <C>    
Actuarial present value of accumulated benefit obligation,
  including vested benefits of  $5,941,000 in 1997 and
  $8,476,000 in 1998                                           $ 6,127,000      $ 8,721,000
                                                               -----------      -----------
Plan assets at fair value                                        8,103,000        9,646,000
Projected benefit obligations for service rendered to date      (6,741,000)      (9,489,000)
                                                               -----------      -----------
Plan assets in excess of projected benefit obligation            1,362,000          157,000
Unrecognized prior service cost                                     62,000           57,000
Unrecognized net gain                                           (1,178,000)      (1,564,000)
Unrecognized net obligation                                        554,000          423,000
                                                               -----------      -----------
Prepaid pension expense (pension liability)                    $   800,000      $  (927,000)
                                                               ===========      ===========
</TABLE>


<TABLE>
<CAPTION>
                                                         1996              1997           1998
                                                        ------            ------           ----
<S>                                                  <C>              <C>              <C>        
         Service cost                                $   372,000      $   337,000      $   444,000
         Interest cost on projected benefit
           obligation                                    375,000          424,000          584,000
         Actual return on assets                      (1,050,000)      (1,458,000)      (2,135,000)
         Amortization of transitional obligation         119,000          119,000          118,000
         Net unrecognized loss and amortization          507,000          827,000        1,334,000
                                                     -----------      -----------      -----------
         Net periodic pension expense                $   323,000      $   249,000      $   345,000
                                                     -----------      -----------      -----------
         Company contributions                       $      --        $      --        $      --
                                                     ===========      ===========      ===========
</TABLE>

The increase in the present value of accumulated benefit obligation is primarily
the result of the early retirement program put into effect in 1997 in connection
with the  production  and cost  optimization  program.  In September  1998,  the
Company made a contribution of $700,000 to the Plan.

<PAGE>

SERP:                                                     1997            1998
                                                        --------        -------
Actuarial present value of accumulated benefit
  obligation, including vested benefits of $516,000 in
  1997 and $588,000 in 1998                             $ 516,000     $ 588,000
Plan assets at fair value                               ----------    ---------
                                                          239,000       500,000
Projected benefit obligations for service rendered to
  date                                                    516,000       588,000
Plan assets in excess of projected benefit obligation   ----------    ---------
                                                         (277,000)      (88,000)
Unrecognized prior service cost                             --             --
Unrecognized net gain                                       5,000        21,000
Unrecognized net obligation                                 --             --
                                                         --------      --------
Pension liability                                       $(272,000)     $(67,000)
                                                         =========     ========

<TABLE>
<CAPTION>
                                                    1996          1997           1998
                                                   ------        ------         ------
<S>                                                 <C>           <C>           <C>   
Service cost                                       $90,000       $44,000       $47,000
Interest cost on projected benefit obligation       26,000        34,000        38,000
Actual return on assets                            (14,000)      (13,000)      (18,000)
Amortization of transitional obligation               --            --            --
Net unrecognized loss and amortization               4,000        (5,000)        2,000
                                                  --------      --------      --------
Net periodic pension expense                       106,000        60,000        69,000
                                                  --------      --------      --------
Company contributions                              $  --          $ --        $275,000
                                                  ========      ========       =======

</TABLE>


The actuarial present value of the projected benefit  obligation of the Plan and
the SERP was  determined  using a discount  rate of 7.5% in 1997 and 1998,  with
assumed salary increases of 4% in 1997 and 1998. The expected  long-term rate of
return on assets was 9% in both 1997 and 1998.
Prior service cost is amortized over 15 years.

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 the Company.
The Company,  at its option,  may elect to make  matching  contributions  to the
Plan. No matching contributions were made in 1996, 1997 or 1998.

9. MAJOR CUSTOMERS, EXPORT SALES AND FOREIGN OPERATIONS

In fiscal 1996,  1997,  and 1998 seed sales to each of three  customers  and the
related  licensing fees ultimately  billed to the farmers by these customers for
transgenic  products  comprised more than 10% of total sales and licensing fees.
The approximate amount of annual sales including  technology fees to each of the
customers were as follows:

Customer                               1996              1997           1998
--------------------------------------------------------------------------------
  A                                $22,400,000     $27,100,000     $23,800,000
  B                                 16,200,000      26,200,000      27,388,000
  C                                 27,900,000      31,800,000      44,054,000

International   sales  (including   export  sales)   approximated   $12,600,000,
$14,900,000 and $21,770,000 in 1996, 1997 and 1998, respectively.

10.  RELATED PARTY TRANSACTIONS

A partner of a law firm that  represents  the Company is also a stockholder  and
serves as  corporate  secretary.  The  Company  paid  legal fees to that firm of
approximately   $575,000,   $645,000  and  $715,000  in  1996,  1997  and  1998,
respectively.

Dr. Chua, a member of the Board of Directors of the Company,  is the Chairman of
the Management Board of Directors of IMA and is also Chairman of the Board of an
affiliate of IMA, IMAGEN. 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 1996 and 1997, 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 the Company's
instruction  related to the  development  of certain  technologies  for varietal
crops such as cotton and  soybeans.  The Company  paid  approximately  $230,000,
$350,000 and $260,000 in 1996,  1997 and 1998,  respectively,  for such research
projects.


11.  COMMITMENTS AND CONTINGENCIES

Through  October 26, 1998, approximately  51 farmers  filed  arbitration  claims
against the Company and Monsanto  Company  ("Monsanto")  with state  agencies in
Mississippi and Texas. The complainants  allege that Roundup Ready seed marketed
by the Company failed to perform as anticipated resulting in deformed or missing
bolls and some further assert  substantial yield losses in their 1998 crops. The
Company and Monsanto are presently  investigating  these claims to determine the
cause or causes of the  problems  alleged.  Pursuant to the terms of the Roundup
Ready Gene License and Seed Services  Agreement (the "Roundup Ready  Agreement")
between D&PL and Monsanto,  Monsanto has assumed  responsibility for the defense
of  these  claims.  Pursuant  to  the  Roundup  Ready  Agreement,   Monsanto  is
contractually  obligated to defend and indemnify the Company  against all claims
arising out of failure of the Roundup Ready glyphosate tolerance gene. D&PL will
not have a right to  indemnification  from  Monsanto,  however,  for any  claims
involving  defective  varietal  characteristics  separate from or in addition to
failure of the herbicide-tolerance gene. D&PL believes that these claims will be
resolved without any material impact on the Company's financial statements.

Through  October 26, 1998,  101 farmers in Georgia and 2 in Arkansas  have filed
arbitration  claims  against  the  Company  and in  some  cases,  Monsanto.  The
complainants allege that certain Roundup Ready Paymaster cotton seed marketed by
the Company in 1998 produced  plants which exhibited a condition known as Bronze
Wilt and consequently  sustained  varying degrees of lost yield. Some complaints
also contain  allegations of poor  germination.  D&PL and Monsanto are currently
investigating  these  claims to  determine  the  cause or causes of the  alleged
problems and are working cooperatively with the respective states departments of
agriculture to gather the necessary  information regarding causation and damage.
Presently, the definitive causes of the alleged Bronze Wilt and poor germination
in this seed have not been  established,  and accordingly  Monsanto's  indemnity
obligation,  if any, is unresolved.  It is D&PL's intention to defend vigorously
claims  asserting  product  defects in the varieties.  Management  believes that
these  complaints  will be resolved  without any future  material  impact on the
Company's consolidated financial statements.

The  Company,  certain  subsidiaries  of  Monsanto  and  others  were  named  as
defendants in a lawsuit filed in the Civil District  Court,  Williamson  County,
Texas,  277th Judicial  District,  in April 1997. The plaintiffs  allege,  among
others  things,  that certain  cottonseed  acquired  from  Monsanto in the Hartz
Cotton  acquisition and subsequently  sold by the Company,  failed to perform as
represented  allegedly  resulting in lost yield. The Company has filed a Summary
Judgment motion based on failure to arbitrate in accordance with Texas seed law.
Pursuant to the Hartz Cotton Acquisition  agreement,  the Company is entitled to
indemnification from Monsanto for damages resulting from the sale of bagged seed
inventories  acquired  by  D&PL  in that  acquisition.  Some or all of the  seed
involved in this case may meet this criteria and D&PL will therefore be entitled
to  indemnification  from  Monsanto  for any  losses  resulting  from such seed.
Management  believes that this case will be resolved without any material impact
on the Company's financial statements.

The  Company,  Monsanto  and other third  parties  were named as  defendants  in
lawsuits filed in (i) the District Court of Falls County,  Texas, in August 1996
and (ii) in the District Court of Robertson  County,  Texas,  in March 1998. The
plaintiffs allege, among other things, that D&PL's cottonseed  varieties,  which
contain Monsanto's Bollgard gene, did not perform as the farmers had anticipated
and, in  particular,  did not fully  protect  their  cotton  crops from  certain
lepidopteran  insects.  Pursuant to the terms of the Bollgard  Agreement between
D&PL and Monsanto,  Monsanto has assumed responsibility for the defense of these
claims.  The portion of this claim  relating to failure of the Bollgard  gene is
subject to a duty of defense by Monsanto and prorata  indemnification  under the
Bollgard Agreement.  Under the applicable  indemnity  provisions of the Bollgard
Agreement,  defense costs and liability to the  plaintiffs on any failure of the
technology  would be  apportioned  71% to Monsanto and 29% to D&PL.  Some of the
claims in this  litigation  concern  failure of  Monsanto's  express  warranties
relating to insect  resistance  and those  claims may not be within the scope of
D&PL's partial indemnity obligation to Monsanto.  On the other hand, some of the
claims  made in the  litigation  concern  the  quality  of seed  and  seed  coat
treatments,  or other  varietal  aspects of variety,  not  involving  failure of
performance of the Bollgard gene or express representations with respect thereto
and, therefore,  may not be within the scope of Monsanto's  indemnity obligation
to D&PL.  D&PL intends to cooperate  with Monsanto in its  anticipated  vigorous
defense of these suits.  D&PL believes that these suits will be resolved without
any material impact on the Company's consolidated financial statements.

In  October  1996,   Mycogen  Plant  Science,   Inc.  and   Agrigenetics,   Inc.
(collectively  "Mycogen")  filed a lawsuit in U.S.  District  Court in  Delaware
naming D&PL,  Monsanto and DeKalb  Genetics as  defendants  alleging that two of
Mycogen's  recently  issued  patents have been  infringed by the  defendants  by
making,  selling,  and licensing  seed that contains the Bollgard gene. The suit
which  went  to  trial  in  January  1998  sought  injunctions  against  alleged
infringement, compensatory damages, treble damages and attorney's fees and court
costs.  A jury found in favor of D&PL and  Monsanto  on issues of  infringement.
Mycogen has subsequently re-filed a motion for a new trial and for a judgment in
favor of  Mycogen  as a matter of law.  Pursuant  to the  terms of the  Bollgard
Agreement,  Monsanto  is required to defend  D&PL  against  patent  infringement
claims and indemnify D&PL against  damages from any patent  infringement  claims
and certain other losses and costs.  Due to  Monsanto's  obligation to indemnify
D&PL,  the Company  believes that the  resolution of this matter will not have a
material impact on the Company or its financial statements.

In May  1998,  five  individual   alleged  shareholders  brought  suits  against
Monsanto,  the Company and its Board of Directors  ("Directors") in the Chancery
Court  of  New  Castle  County,   Delaware.  The  complaints  alleged  that  the
consideration to be paid in the proposed merger of the Company with Monsanto, is
inadequate and that the Company's  Directors  breached their fiduciary duties to
the Company stockholders by voting approval of the Agreement and Plan of Merger,
and that Monsanto  aided and abetted the alleged  breach of fiduciary  duty. The
complaints were consolidated into one action, which seeks a declaration that the
action is  maintainable  as a class  action,  that the  merger be  enjoined,  or
alternatively, rescinded, and/or an award of unspecified compensatory damages if
the merger is consummated.  Management  believes that the complaints are without
merit and intend to vigorously defend the consolidated complaints.  D&PL further
believes that the consolidated  complaints will be resolved without any material
impact on the Company's consolidated financial statements.

A corporation  owned by the son of the Company's former  Guatemalan  distributor
sued in 1989  asserting  that  the  Company  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  5,300,000  Guatemalan
quetzales  (approximately  $800,000 at current exchange rates) and an injunction
preventing the Company 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.  Management  believes  that  the
resolution of the matter will not a have  material  impact on the Company or its
financial statements. The Company continues to offer seed for sale in Guatemala.

The Company is involved in various other claims  arising in the normal course of
business. Management believes such matters will be resolved without any material
effect on the Company's financial position or its results of operations.

On July 18, 1996, the United States  Department of Justice,  Antitrust  Division
("USDOJ"),   served  a  Civil  Investigative  Demand  ("CID")  on  D&PL  seeking
information  and  documents  in  connection  with  its   investigation   of  the
acquisition  by D&PL of the stock of Arizona  Processing,  Inc.,  Ellis Brothers
Seed, Inc. and Mississippi Seed, Inc. (which own the outstanding common stock of
Sure Grow Seed,  Inc).  The CID states that the USDOJ is  investigating  whether
these  transactions may have violated the provisions of Section 7 of the Clayton
Act, 15 USC ss. 18. D&PL has responded to the CID,  employees have been examined
by the USDOJ,  and D&PL is committed to full  cooperation with the USDOJ. At the
present time, the ultimate outcome of the investigation cannot be predicted.

12. MERGERS AND ACQUISITIONS

Merger with Monsanto Company

On May 8, 1998,  the  Company  entered  into a merger  agreement  with  Monsanto
Company  ("Monsanto"),  pursuant to which the  Company  would be merged with and
into  Monsanto in an  exchange of common  stock which is expected to be tax free
under Section 368(a) of the Internal  Revenue Code. This agreement is subject to
the approval of the Company's  stockholders.  Under terms of the agreement,  the
Company's  stockholders would be entitled to receive 0.8625 shares of Monsanto's
Common Stock in exchange for each share of Delta and Pine Land stock they hold.

The  merger of D&PL with and into  Monsanto  is  subject to review by the United
States  Department of Justice ("USDOJ") under the  Hart-Scott-Rodino  Anti-Trust
Improvements  Act of 1976 ("H-S-R  Act").  On June 18,  1998,  Monsanto and D&PL
announced that they have received requests for additional  information and other
documentary  materials from the USDOJ under the H-S-R Act concerning  Monsanto's
previously  announced  acquisition  of D&PL.  This  request  extends the waiting
period under the H-S-R Act during which the parties are prohibited  from closing
the  transaction.  Monsanto and D&PL are complying with the USDOJ's requests for
information and documents as quickly as possible.

Pursuant to the merger  agreement,  D&PL has agreed that, during the period from
the date of the signing of the merger agreement (May 8, 1998) through the merger
closing date (except as otherwise expressly permitted by the terms of the merger
agreement),  it will, and it will cause its respective  subsidiaries  to, in all
material  respects,  (i) carry on its business in the ordinary course,  (ii) use
reasonable  best efforts to preserve intact its current  business  organization,
(iii) keep  available the services of its current  officers and  employees,  and
(iv) preserve its relationships with customers, suppliers and others.

In  addition,  D&PL has agreed that  neither  D&PL nor,  where  applicable,  its
subsidiaries, without Monsanto's prior written consent or as otherwise permitted
under the merger agreement,  will: (a) amend its certificate of incorporation or
bylaws;  (b) split,  combine or  reclassify  its  outstanding  capital  stock or
declare,  set aside or pay any dividend  payable in cash, stock or property with
respect to the same,  provided  that D&PL may declare and pay regular  quarterly
dividends  of not more than $0.03 per  share;  ( c ) issue or agree to issue any
additional  shares of, or rights to acquire  shares of, capital stock other than
the issuance of shares of capital stock of a subsidiary to D&PL or, with respect
to D&PL shares  issuable upon exercise of  outstanding  options  pursuant to the
D&PL  1993  Stock  Option  Plan  and the  1995  D&PL  Long-Term  Incentive  Plan
(collectively,  the "D&PL Option Plans");  (d) enter into or agree to enter into
any new or amended  contract or agreement with any labor unions;  (e) authorize,
recommend, propose or announce an intention to authorize,  recommend or propose,
or enter into an agreement  in  principle  or an  agreement  with respect to any
merger,  consolidation  or  business  combination  (other  than the merger  with
Monsanto),  or any  acquisition or disposition of a material amount of assets or
securities (other than inventory in the ordinary course of business);  (f) enter
into or amend any  employment,  severance  or  change-in-control  agreement,  or
benefit plan except as required by law or regulations,  or as expressly provided
by the merger agreement or in the ordinary course of business; (g) (i) except in
the  ordinary  course of business,  create,  incur or assume any debt other than
under  existing  or  approved  lines of  credit or to fund  out-of-pocket  costs
incurred  in  connection  with  the  transactions  contemplated  by  the  merger
agreement,  (ii)  assume,  guarantee,  endorse  or  otherwise  become  liable or
responsible  for the  obligations  of any other  person  except  majority  owned
subsidiaries of D&PL in the ordinary course of business or (iii) make any loans,
advances or capital  contributions,  or  investments  in, any other person other
than a majority-owned  subsidiary;  (h) amend the 1996 D&PL  Shareholder  Rights
Plan ("Rights  Plan") or redeem any of the rights granted under the Rights Plan,
or (i) take any  action  that it is  prohibited  from  taking  under the  merger
agreement  or that  would  constitute  or its  likely  to cause a breach  of any
covenant, agreement, or representation set forth in the merger agreement.

Other Transactions

The   Company   merged  with  the  Sure  Grow   Companies   in  May  1996  in  a
pooling-of-interests  transaction  valued at approximately  $70.0 million.  D&PL
exchanged  approximately  2.8  million  shares of its common  stock,  which were
subsequently registered in December 1996, for all outstanding shares of the Sure
Grow Companies.  The acquired companies were on a fiscal year ending June 30. As
of August 31, 1996, the fiscal year ends of the acquired  companies were changed
to August 31. The following  summarizes  income  statement data of the Sure Grow
Companies for the period beginning July 1, 1996 and ending August 31, 1996:


          Sales                                              $     574,000
          Cost of sales                                         (1,043,000)
          Operating expenses                                      (207,000)
          Other                                                    (15,000)
                                                             --------------
          Net loss                                             $  (691,000)
                                                               ============

The combined net loss of  $(691,000) in the  transition  period is included as a
separate  item in the  accompanying  Consolidated  Statements  of  Stockholders'
Equity.  The net change in cash during the  transition  period was a decrease of
$357,000  and this  amount  is  included  as a single  item in the  accompanying
Consolidated Statements of Cash Flows.

In February 1996 the Company acquired Hartz Cotton,  Inc. from Monsanto Company,
which included cotton planting seed  inventories,  germplasm,  breeding  stocks,
trademarks,  trade names and other assets, for approximately  $6.0 million.  The
consideration  consisted primarily of 1,066,667 shares of the Company's Series M
Convertible  Non-Voting  Preferred  Stock.  Pro  forma  financial  data  is  not
presented  because the impact of this acquisition  (accounted for as a purchase)
was  not  material  to the  Company's  results  of  operations  for  any  period
presented. The acquisition also included contingent consideration in the form of
rights  to  receive  266,667  shares  of  the  Company's  Series  M  Convertible
Non-Voting  Preferred  Stock once certain unit sales levels of Hartz  cottonseed
are achieved. In addition, Monsanto also has the right to receive shares of D&PL
common stock in fiscal 2000 based on the gross profits  earned from September 1,
1996  through  August  31,  1999 on the  sale of  varieties  developed  from the
germplasm acquired.

13.  STOCKHOLDERS' EQUITY

Preferred Stock

The  Board of  Directors  of the  Company  is  authorized,  subject  to  certain
limitations prescribed by law and the Monsanto merger agreement, 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 the Company'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
the Company 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.
The Board of Directors has unanimously approved the Monsanto merger and modified
the Rights Plan to deactivate it for such merger. Under the Rights Plan, 429,319
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 the Company's  outstanding
shares of Common  Stock.  The  rights,  which  expire on August  30,  2006,  are
redeemable in whole,  but not in part, at the Company's option at any time for a
price of $0.01 per right. In May 1998 and July 1998, the Rights Plan was amended
to facilitate the Monsanto merger.

The Company  issued  800,000  shares  (after effect of stock splits) of Series M
Convertible  Non-voting  Preferred Stock in February 1996, as consideration  for
the  purchase  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 the Company,  and
no more,  when and as  declared by the Board of  Directors.  In the event of any
liquidation,  dissolution  or winding up of the  Company,  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 the Company, $10.452 per share of Series
M Preferred  Stock.  The Series M Preferred Stock is convertible  beginning upon
the seventh  anniversary  of the date on which the Series M Preferred  Stock was
issued or the occurrence of other specified events, whichever occurs first.

Stock Option Plans

In April  1993, the Board of Directors and stockholders  approved the 1993 Stock
Option Plan.  Options to purchase up to 2,560,000  shares (after effect of stock
splits through November 1997) of Common Stock were authorized at an option price
not less than the market price on the date of grant.

On October 17, 1995, the Company's Board of Directors adopted the 1995 Long-Term
Incentive Plan (the  "Incentive  Plan")  pursuant to which stock options,  stock
appreciation rights, restricted shares of Common Stock and performance units may
be awarded to officers,  key employees and directors.  Under the Incentive Plan,
2,560,000  shares (after effect of stock splits through November 1997) of Common
Stock of the  Company are  available  for grant.  Shares  subject to options and
awards which expire  unexercised are available for new option grants and awards.
The Company's  stockholders  ratified the adoption of the Incentive  Plan at the
1996 annual meeting.  Future members of the Board of Directors receive automatic
grants of 62,223  shares upon being named to the Board.  On February  27,  1997,
stockholders  amended this plan to provide  additional  one time grants of 8,889
shares in February 1997 and 2,667 each year  thereafter  for the next five years
to  directors of the Company.  Such  options are  exercisable  ratably over five
years commencing after one year from the date of grant.

<PAGE>


<TABLE>
<CAPTION>

Stock Options                                        Number of Shares           Price Range
                                                      --------------    --------------------------
<S>                                                        <C>         <C>               <C>     
Outstanding at August 31, 1995                              2,041,600   $   4.67        - $  4.96
Granted                                                       759,999   $  10.69        - $ 15.70
Exercised                                                    (487,733)  $   4.67        - $  4.96
Lapsed or canceled                                            (36,623)  $   4.67        - $ 10.69
                                                            ----------
Outstanding at August 31, 1996                              2,277,243   $   4.67        - $ 15.70
Granted                                                     1,412,217   $  15.61        - $ 28.90
Exercised                                                    (160,548)  $   4.67        - $ 15.70
Lapsed or canceled                                            (72,533)  $   4.67        - $ 22.36
                                                            ----------
Outstanding at August 31, 1997                              3,456,379   $   4.67        - $ 28.90
Granted                                                       722,994   $  26.82        - $ 49.31
Exercised                                                    (745,749)  $   4.67        - $ 22.85
Lapsed or canceled                                           (113,157)  $   4.67        - $ 28.90
                                                            ----------
Outstanding at August 31, 1998                              3,320,467   $   4.67        - $ 49.31
                                                            ==========
</TABLE>


During  fiscal  1997,  the  Company  adopted  SFAS  No.  123,   "Accounting  for
Stock-Based  Compensation",  which requires companies to estimate the fair value
of stock options on date of grant.  This  pronouncement  requires the Company to
record the estimated fair value of stock options issued as compensation  expense
in its income  statements over the related  service  periods or,  alternatively,
continue  to  apply   accounting   methodologies  as  prescribed  by  Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees,"  and disclose the pro forma effects of the  estimated  fair value of
stock options issued in the accompanying  footnotes to its financial statements.
In adopting this  pronouncement,  the Company  elected to continue to follow the
accounting  methodologies as prescribed by APB Opinion No. 25. The determination
of fair value is only  required  for stock  options  issued  beginning in fiscal
1996. The weighted  average fair values of options  granted in fiscal 1996, 1997
and 1998 were $5.02, $11.08 and $15.91 per share, respectively.

The  proforma  effects of the total  compensation  expense  that would have been
recognized under SFAS No. 123 are as follows:

<TABLE>
<CAPTION>
                                                                                          August 31
------------------------------------------------------------------------------------------------------------------
(Dollars in thousands, except per share data)                          1996                 1997             1998
------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>                   <C>            <C>     
Net income, as reported                                            $ 15,237              $ 6,850        $  1,783
Proforma net income (loss)                                         $ 14,857              $ 4,792        $ (1,303)
Basic earnings per share, as reported                              $   0.41              $  0.18        $   0.05
Proforma earnings per (loss) share                                 $   0.40              $  0.13        $  (0.03)
</TABLE>

The Company utilized the Black-Scholes Option Pricing Model to estimate the fair
value of stock options granted using the following assumptions:

<TABLE>
<CAPTION>
                                           1996                 1997              1998
                                       ----------            ----------        ----------
<S>                                           <C>                   <C>                 <C>
Expected dividend yield                       3%                     3%                  3%
Expected option lives                    5 years                5 years             5 years
Expected volatility               33.9% to 47.2%         47.0% to 48.7%      48.7% to 54.4%
Risk-free interest rates          5.66% to 6.51%         6.15% to 6.90%      5.34% to 5.89%
</TABLE>

The following table summarizes certain  information about stock options granted,
exercised and forfeited for the three year period ended August 31, 1998:

<TABLE>
<CAPTION>

                        Options Granted      Weighted Average
                        net of Exercises     Remaining Contractual    Weighted Average
 Exercise Price Range   and Forfietures      Life (in years)          Exercise Price                                            
---------------------   ---------------      -------------------     ---------------
<S>                        <C>                    <C>                          <C>    
$10.69 - $18.89            778,000                7.56                         $ 13.82
$21.21 - $28.90          1,570,000                8.59                         $ 24.40
$37.44 - $49.31            153,000                9.64                         $ 44.09
</TABLE>


Common Stock

In March  1996,  the Board of  Directors  authorized  a 3 for 2 stock  split for
common and preferred shares outstanding effected in the form of a dividend, with
no change in par value per share, distributed on April 15, 1996, to stockholders
of record on March 29, 1996. In February 1997, the Board of Directors authorized
a 4 for 3 stock split for common and preferred  shares  outstanding  effected in
the form of a dividend,  with no change in par value per share,  distributed  on
April 11, 1997,  to  stockholders  of record on March 31, 1997. In October 1997,
the Board of Directors authorized a 4 for 3 stock split for common and preferred
shares outstanding effected in the form of a dividend, with no change in the par
value per share, distributed on November 20, 1997, to the stockholders of record
on November 10, 1997.  All stock splits  described  above have been reflected in
the accompanying financial statements.

Treasury Stock

In April 1997, the Board of Directors  authorized a stock  repurchase plan of up
to 10% of the Company's  outstanding  common stock. At August 31, 1997 and 1998,
the Company had purchased  114,267  shares with an aggregate  purchase  price of
$2,173,000.  In  connection  with the  Monsanto  merger,  the Board of Directors
formally terminated this plan in May 1998.

Earnings Per Share

The table below reconciles basic and diluted earnings per share at August 31:


Basic                                   1996              1997            1998
                                        ----              ----            ----
Net income                             $ 15,276        $  6,913        $  1,879
Preferred Stock Dividends                  (39)            (63)            (96)
                                       --------        --------        ---------
Net income applicable to
 common stockholders                   $ 15,237        $  6,850          $1,783
                                       ========        ========        =========
Weighted average shares outstanding      37,292          37,579          38,011
                                       ========        ========        =========
Basic earning per share                $   0.41        $   0.18        $   0.05
                                       ========        ========        =========

Diluted Net income                     $ 15,237        $  6,850        $  1,783
  applicable to common stockholders
Add Back: Preferred stock dividends          39              63              96
                                       --------        --------        ---------
Net income applicable to
  common stockholder                   $ 15,276        $  6,913        $  1,879
                                       ========        ========        =========
Weighted average shares outstanding      37,292          37,579          38,011
Common stock equivalents                  1,505           1,484           1,762
Weighted average common stock issuable 
  upon conversion of Preferred stock        467             800             800
                                       --------        --------        ---------
Diluted shares outstanding               39,264          39,863          40,573
                                       ========        ========        =========
Diluted earnings per share             $   0.39        $   0.17        $   0.04
                                       ========        ========        =========


<PAGE>


14.   UNAUDITED QUARTERLY FINANCIAL DATA

All of the  Company's  domestic  seed products are subject to return or credits,
which vary from year to year.  The annual  level of returns and  ultimately  net
sales and net income are  influenced  by various  factors,  principally  weather
conditions occurring in the spring planting season (spanning the Company's third
and fourth fiscal quarters). The Company provides for estimated returns as sales
are made. To the extent actual returns differ from estimates, adjustments to the
Company's  operating  results are recorded  when such  differences  become known
typically in the Company's fourth quarter.  All significant returns occur or are
accounted for by fiscal year end. Generally, international sales are not subject
to return.  Substantially  all Company sales are  concentrated in the second and
third fiscal quarters.  As a result,  the Company generally incurs losses in the
first and fourth quarters.  Management  believes that such seasonality is common
throughout the seed industry.

Summarized unaudited quarterly financial data is as follows:

                                           (In thousands, except per share data)

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
         Fiscal 1996: Three months ended
                                                     November 30   February 29     May 31     August 31
-------------------------------------------------------------------------------------------------------
<S>                                                    <C>           <C>          <C>          <C>     
Net sales and licensing fees                           $  5,326      $ 63,404     $ 82,650     $  1,891
Gross profit                                                298        24,868       29,735          893
Net income (loss) applicable to
     common shares                                       (3,740)       10,404       13,353       (4,780)
Net income (loss) per share-basic(1)                      (0.10)         0.27         0.34        (0.13)
Weighted average number of shares
   used in quarterly per share calculations -basic       37,087        38,571       39,104       37,455
Net income (loss) per share diluted(1)                    (0.10)         0.27         0.33        (0.13)
Weighted average number of shares used
     in quarterly per share calculations-  diluted       37,087        39,111       40,081       37,455
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
         Fiscal 1997: Three months ended
                                                   November 30   February 28      May 31     August 31
------------------------------------------------------------------------------------------------------
<S>                         <C>                      <C>           <C>          <C>          <C>      
Net sales and licensing fees(2)                      $  6,317      $ 66,425     $116,425     $ (5,918)
Gross profit(3)                                         1,188        25,325       42,721      (13,774)
Net income (loss) applicable to
     common shares(3)                                  (4,381)        9,299       20,544      (18,612)
Net income (loss) per share-basic(1 )(3)                (0.12)         0.24         0.53        (0.50)
Weighted average number of shares  used
   in quarterly per share calculations -basic          37,573        38,949       38,815       37,573
Net income (loss) per share-diluted(1)(3)               (0.12)         0.23         0.51        (0.50)
Weighted average number of shares used
     in quarterly per share calculations-diluted       37,573        39,828       39,989       37,573
</TABLE>


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
         Fiscal 1998: Three months ended
                                                       November 30   February 28   May 31        August 31
----------------------------------------------------------------------------------------------------------
<S>                         <C>                         <C>           <C>          <C>          <C>      
Net sales and licensing fees(2)                         $  5,340      $ 77,245     $126,029     $(16,275)
Gross profit(4)                                            2,067        27,147       40,018      (15,666)
Net income (loss) applicable to
     common shares(4)                                     (4,665)        9,757       13,941     (17,248) 
Net income (loss) per share-basic(1)(4)                    (0.12)         0.26         0.36        (0.45)
Weighted average number of shares  used
   in quarterly per share calculations -basic (2)         37,721        37,858       38,133       38,367
Net income (loss) per share- diluted(1)(4)                 (0.12)         0.24         0.34         0.45
Weighted average number of shares used
     in quarterly per share calculations- diluted(2       37,721        40,397       41,328       38,367
</TABLE>

----------

(1)The sum of the  quarterly  net income  (loss) 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. 

(2)Seed  returns  were  higher in the fourth  quarter  than the level of returns
anticipated at the end of the third quarter. A change in the accounting estimate
for these  returns was recorded in the fourth  quarter.  The new  provision  for
returns was greater than the amount of sales recorded in the fourth quarter, and
as a result,  reported  net sales in the fourth  quarter were  negative.  

(3)The fourth quarter  includes the effect of recording a $19.0 million  special
charge of which $11.5  million is recorded as Cost of Sales and $7.5  million is
recorded in operating  expenses related to the production and cost  optimization
program.

(4)The fourth quarter  includes the effect of recording a $17.5 million  special
charge  in cost of sales  associated  with  inventory  write  offs and  recalled
inventory  and  $5.1  million  in  operating  expense  for  the  effects  of the
evaluation of various strategic alternatives and the Monsanto Merger.

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

Not applicable.


<PAGE>


                                    PART III

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

OFFICERS OF THE COMPANY

                                                     Offices Held with Company;
Name (Age) (1)                      Position         Principal Occupation for
                                                        Past Five Years
--------------               ----------------------  --------------------------
Roger D. Malkin              Chairman and Chief      
(67)                         Executive Officer
                                                  Mr.   Malkin   has  served  as
                                                  Chairman  and Chief  Executive
                                                  Officer  of D&PL  since  1978.
                                                  Also, he served as Chairman of
                                                  Southwide, Inc. ("Southwide"),
                                                  a Delaware corporation and the
                                                  former  parent  of D&PL,  from
                                                  1971  through its  liquidation
                                                  in 1993.

F. Murray Robinson           President and Chief     
(64)
                                                  Mr. Robinson has been employed
                                                  by D&PL since April 1988,  and
                                                  he has served as President and
                                                  Chief Operating  Officer since
                                                  February 1989. From 1988 until
                                                  1989,    Mr.    Robinson   was
                                                  Executive  Vice  President  of
                                                  D&PL.  From  1987 to 1988,  he
                                                  directed   the   International
                                                  Division    of    Agrigenetics
                                                  Corporation,  an  agribusiness
                                                  company   with   various  seed
                                                  divisions  and   biotechnology
                                                  plant operations. From 1986 to
                                                  1987,   he  was  Senior   Vice
                                                  President  and acting  General
                                                  Manager of  Agrigenetics.  For
                                                  the period 1981 through  1986,
                                                  Mr.  Robinson  served as Chief
                                                  Financial      Officer      of
                                                  Agrigenetics.  In August 1998,
                                                  Mr.  Robinson   announced  his
                                                  planned  retirement  in  April
                                                  1999.

Steven M. Hawkins            Executive Vice       
(48)                         President

                                                  Mr.   Hawkins  has  served  as
                                                  Executive  Vice  President  of
                                                  D&PL  since  May  1998.   From
                                                  September   1996   until   his
                                                  appointment  to Executive Vice
                                                  President    he    served   as
                                                  director of marketing and Vice
                                                  President    of   sales    and
                                                  marketing for Deltapine  Seed.
                                                  Prior  to  joining   D&PL,  he
                                                  worked for Asgrow Seed Company
                                                  from    October   1976   until
                                                  September   1996.   His   last
                                                  assignment  with Asgrow was as
                                                  director     of     marketing,
                                                  logistics  and  new  business.
                                                  Prior to that he held  various
                                                  marketing, sales and operation
                                                  positions with the company.

Charles R. Dismuke, Jr.      Senior Vice President     
(43)   

                                                   Mr.  Dismuke  has  served  as
                                                   Senior Vice  President and as
                                                   President  -  DeltaPine  Seed
                                                   Division  since January 1997.
                                                   From   October   1989   until
                                                   January  1997,  he  served as
                                                   Vice    President-Operations.
                                                   Mr.  Dismuke  was  a  General
                                                   Manager   of   one   of   the
                                                   Company's       subsidiaries,
                                                   Greenfield Seed Company, from
                                                   1982 until 1989.  Mr. Dismuke
                                                   has been  employed by D&PL or
                                                   one of its subsidiaries since
                                                   June 1977.

W.A. Ellis, III              Senior Vice President  
(45)
                                                  
                                                   Mr.   Ellis  has   served  as
                                                   Senior Vice  President and as
                                                   President  - Sure  Grow  Seed
                                                   Division  since January 1997.
                                                   From  1990   until   1996  he
                                                   served as  President  - Ellis
                                                   Brothers Seed,  Inc. and Sure
                                                   Grow Seed,  Inc  (which  were
                                                   acquired  by the  Company  in
                                                   May 1996 as the result of the
                                                   Sure  Grow  merger).   Before
                                                   that time Mr.  Ellis was Vice
                                                   President  of Ellis  Brothers
                                                   Seed, Inc.


Tom O. Luehder               Senior Vice President  
(57)


                                                   Mr.  Leuhder  has  served  as
                                                   Senior  Vice   President  and
                                                   President        of       the
                                                   International  since February
                                                   1998. Prior to this position,
                                                   He was Senior Vice  President
                                                   in the  Division  since April
                                                   1997.  He  joined  Delta  and
                                                   Pine Land Company in May 1994
                                                   and     was     the     Chief
                                                   Representative  of D&PL China
                                                   Pte.  Ltd.  Prior to  joining
                                                   Delta and Pine Land  Company,
                                                   he  served  as  President  of
                                                   Jacques     Seed     Company,
                                                   Prescott, Wisconsin.

James H. Willeke             Senior Vice President 
(54)


                                                   Mr.  Willeke  has  served  as
                                                   Senior Vice  President and as
                                                   President     -     Paymaster
                                                   Division  since January 1997.
                                                   From  1987  until  1996,   he
                                                   served as  President  - Hartz
                                                   Seed in Stuttgart,  Arkansas,
                                                   a  subsidiary   of  Monsanto.
                                                   From   1982   to   1987,   he
                                                   directed       Lynks       in
                                                   Marshalltown,      IA,      a
                                                   subsidiary of Mycogen  Seeds,
                                                   as General Manager.

Harry B. Collins             Vice President          
(57)                         Technology              
                             Transfer                

                                                  Dr. Collins has served as Vice
                                                  President-Technology  Transfer
                                                  since  April,  1998.  Prior to
                                                  that,  Dr.  Collins  served as
                                                  the Company's Vice President -
                                                  Research  from  1995 to  April
                                                  1998.


Earl E. Dykes                Vice President -        
(45)                         Operations              
                                                

                                                  Mr.  Dykes has  served as Vice
                                                  President -  Operations  since
                                                  February  1997 until  present.
                                                  Prior to that time,  Mr. Dykes
                                                  served as the General  Manager
                                                  -  Arizona  Processing,   Inc.
                                                  (which  was  acquired  by  the
                                                  Company  in  May  1996  as the
                                                  result   of  the   Sure   Grow
                                                  merger).   Mr.   Dykes  was  a
                                                  shareholder     of     Arizona
                                                  Processing,  Inc.  at the time
                                                  of acquisition.


William V. Hugie             Vice President-         
(39)                         New Technologies        
                             Research             

                                                  Dr.  Hugie has  served as Vice
                                                  President-New     Technologies
                                                  Research since  September 1997
                                                  and, until that time, Director
                                                  -  New  Technologies  Research
                                                  since   September  1996.  From
                                                  August  1994  until  September
                                                  1996 he  served  as a  Project
                                                  Leader   of   the   Transgenic
                                                  Cotton Breeding  Program,  and
                                                  from   December   1988   until
                                                  August  1994  he  served  as a
                                                  Project  Leader of the Sorghum
                                                  Breeding  Program.   Prior  to
                                                  joining the Company, Dr. Hugie
                                                  was   employed  by  Funk  Seed
                                                  International   from  1986  to
                                                  1988.


W. Thomas Jagodinski         Vice President -        
(42)                         Finance and             
                             Treasurer and           
                             Assistant Secretary     
                                                     
                                                  Mr.  Jagodinski  has served as
                                                  Vice   President-Finance   and
                                                  Treasurer  since February 1993
                                                  and    Treasurer   and   Chief
                                                  Financial   Officer  from  May
                                                  1992 to  February  1993.  From
                                                  October 1991 to May 1992,  Mr.
                                                  Jagodinski  served as Director
                                                  of    Corporate    Accounting,
                                                  Financial Reporting and Income
                                                  Taxes.  Prior to  joining  the
                                                  Company,  Mr.  Jagodinski  was
                                                  employed  by  Arthur  Andersen
                                                  LLP  in   various   capacities
                                                  since 1983.


Thomas A. Kerby              Vice President -        
(54)                         Technical Services      

                                                  Dr.  Kerby has  served as Vice
                                                  President-Technical   Services
                                                  since   September   1994   and
                                                  Director - Technical  Services
                                                  from  November  1993,  when he
                                                  joined D&PL, until 1994. Prior
                                                  to joining  the  Company,  Dr.
                                                  Kerby    served   the   cotton
                                                  industry of California and the
                                                  University  of  California  as
                                                  Extension  Cotton   Agronomist
                                                  from  1981   through   October
                                                  1993.
                                                     
                                                     
Charles V. Michell           Vice President -        
(36)                         Information Systems     
                                                     
                                                  Mr. Michell has served as Vice
                                                  President         -Information
                                                  Systems,  since  October  1998
                                                  until  present  and  prior  to
                                                  that   time,    as   Corporate
                                                  Director - Information Systems
                                                  and Telecommunications,  since
                                                  March  1995.   He  joined  the
                                                  company  in 1987 as Manager of
                                                  Information Systems.  Prior to
                                                  joining   the   Company,   Mr.
                                                  Michell    was    Manager   of
                                                  Computer   Operations  at  St.
                                                  Dominic    Jackson    Memorial
                                                  hospital     and     he    was
                                                  self-employed       as      an
                                                  Information         Technology
                                                  Consultant  in  the  Hospital,
                                                  banking  and  custom   welding
                                                  industries.

                                              
Donald L. Kimmel             Vice President -        
(60)                         Marketing               
                                               
                                                  Mr.  Kimmel has served as Vice
                                                  President-Marketing   of  D&PL
                                                  since  1986 and  from  1985 to
                                                  1986 as its Marketing Manager.
      

Alan L. Rubida               Vice President -       
(37)                           Quality              

                                                  Mr.  Rubida has served as Vice
                                                  President   -  Quality   since
                                                  October   1998.   Mr.   Rubida
                                                  joined D&PL in 1994 and served
                                                  as   the   Company's   Western
                                                  Cottonseed  Production Manager
                                                  until his  promotion  in 1998.
                                                  Prior  to  joining  D&PL,  Mr.
                                                  Rubida  served as  manager  of
                                                  the   Cottonseed    Production
                                                  Department   for  the   Supima
                                                  Association of America.


Ann J.  Shackelford          Vice President-         
(40)                         Corporate Services      
                                                     
                                                  Ms.  Shackelford has served as
                                                  Vice   President  -  Corporate
                                                  Services since  September 1997
                                                  and,   until  that  time,   as
                                                  Director   -   New    Business
                                                  Product    Development   since
                                                  January  1997.   From  October
                                                  1994 until  December  1996 she
                                                  served  as Legal  Coordinator.
                                                  Prior to joining the  Company,
                                                  Ms.  Shackelford  was involved
                                                  in private business.
                                                     

Jerome C. Hafter        Secretary             
(53)                                          

                                                  Mr.   Hafter   has  served  as
                                                  Secretary  of D&PL  since July
                                                  1993,   and   he   served   as
                                                  Assistant Secretary from April
                                                  1990 until  July  1993.  Since
                                                  1976,  Mr.  Hafter  has been a
                                                  partner in Lake  Tindall  LLP,
                                                  D&PL's general counsel; and he
                                                  has performed  legal  services
                                                  for D&PL since 1983.
                                                                     

Edward A. Drummond           Vice President          
(51)

                                                   Mr.  Drummond  has  served as
                                                   Vice        President-Quality
                                                   Assurance,   from   September
                                                   1993  until  August  1998  at
                                                   which    he    became    Vice
                                                   President.    Previously   he
                                                   served as Director-Foundation
                                                   Quality  Assurance  from  May
                                                   1991 to September 1993. Prior
                                                   to joining the  Company,  Mr.
                                                   Drummond  was  employed  from
                                                   1989 to 1991 by Terral-Norris
                                                   Seed Company and by Louisiana
                                                   State University from 1980 to
                                                   1989.




----------------------
(1)    As of August 31, 1998
<PAGE>
DIRECTORS OF THE COMPANY
                                              Offices Held with Company;
             Name                                 Principal Occupation
(Year First Elected a Director)                   for Past Five Years
-------------------------------              ----------------------------


Roger D. Malkin (1978)                      

                                   (See the description of Mr. Malkin's  offices
                                   with the Company and principal  occupation on
                                   Page 41, under "Officers of the Company".)

Nam-Hai Chua (1993)                         

                                   Dr.  Chua has acted as a  consultant  to D&PL
                                   since April  1991.  Dr. Chua is the Andrew W.
                                   Mellon   Professor  and  Head  of  the  Plant
                                   Molecular  Biology  Laboratory of Rockefeller
                                   University,  New York, New York, and has been
                                   with the University for over 20 years.  Also,
                                   he is  member of the  Board of  Directors  of
                                   BioInnovations of America, an entity owned by
                                   the Government of Singapore, which invests in
                                   United States  biotechnology  companies.  Dr.
                                   Chua  is  also  a  member  of  the  Board  of
                                   Directors  of  DNAP  Holdings  (formerly  DNA
                                   Plant  Technology  Corporation),  whose stock
                                   trades  on  NASDAQ.  In  addition,  Dr.  Chua
                                   serves  as the  Chairman  of  the  Management
                                   Board  of  Directors  of  the   Institute  of
                                   Molecular  Agrobiology  ("IMA")  and  as  the
                                   Chairman of the Board of IMAGEN Holdings Pte.
                                   Ltd, an affiliate of IMA. Dr. Chua also acted
                                   as  a  scientific   consultant   to  Monsanto
                                   Company for matters relating to plant biology
                                   through 1995. Dr. Chua is 54 years of age.

Jon E.M. Jacoby (1992)                      

                                   Mr.  Jacoby has been  employed  by  Stephens,
                                   Inc. and Stephens Group, Inc., companies that
                                   engage  in  investment  banking   activities,
                                   since 1963 and is  presently  a director  and
                                   officer for each of these companies. Stephens
                                   Inc.   and   Stephens    Group,    Inc.   are
                                   stockholders   of  D&PL.   Mr.  Jacoby  is  a
                                   director   of  Beverly   Enterprises,   Inc.,
                                   Medicus Systems Corp. and Power- One, Inc. He
                                   was a director  of American  Classic  Voyages
                                   Co. until he resigned on June 30,  1997.  Mr.
                                   Jacoby is 60 years of age.

Joseph M. Murphy (1992)                

                                   Since 1987 and February  1993,  respectively,
                                   Mr.  Murphy  has been the  Chairman  of Value
                                   Investors,  Inc., a closely-held  real estate
                                   investment  company,   and  the  Chairman  of
                                   Country  Bank,  White Plains,  New York.  Mr.
                                   Murphy is 63 years of age.

Stanley P. Roth (1988)                      

                                   Mr.  Roth  controls  and is the  Chairman  of
                                   NACC, a private  merchant  banking firm,  and
                                   has  been its  President  since  1976.  Since
                                   1988,  Mr. Roth has served as the Chairman of
                                   Royal-Pioneer   Industries,   Inc.,   and   a
                                   director  of  Hollis  Corporation.  Mr.  Roth
                                   became    the    Vice    Chairman    of   CPG
                                   International, Inc., in 1990 and the Chairman
                                   of GPC  International,  Inc.,  its  successor
                                   corporation, in 1994. Mr. Roth is 61 years of
                                   age.

Rudi E. Scheidt (1993)                   

                                   Since  1990,  Mr.  Scheidt has been a private
                                   investor.  From  1973 to 1989,  he  served as
                                   President of Hohenberg Bros. Co., a worldwide
                                   cotton  merchant,  headquartered  in Memphis,
                                   Tennessee,  and as its Chairman  during 1990.
                                   Mr.   Scheidt  is  a  Director   of  National
                                   Commerce   Bancorporation,   a  bank  holding
                                   company, headquartered in Memphis, Tennessee.
                                   Mr. Scheidt is 73 years of age.

<PAGE>




ITEM 11.        EXECUTIVE COMPENSATION

                                                EXECUTIVE COMPENSATION

Annual Compensation

The following table sets forth certain information  regarding  compensation paid
to, or accrued for, the Company's Chief Executive Officer and the Company's four
other most  highly-compensated  executive officers (the "Named Officers") during
the year ended August 31:


                                          SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                             Long-Term
Name and                                                    Compensation      All Other
Principal Position                    Annual Compensation      Awards       Compensation
-------------------                   -------------------    ----------   -------------- 
                                                             Securities
                                                             Underlying
                              Year    Salary($)  Bonus($)    Options  (1)
                              ----    ---------  --------   -----------

<S>                          <C>     <C>         <C>           <C>        <C>        
Roger D. Malkin ..........   1998    290,000        --         2,666(2)   $ 35,000(4)
  Chief Executive Officer    1997    290,000     220,000      62,222(3)     29,000(4)
  and Chairman of the ....   1996    290,000     220,000        --          29,000(4)
  Board

F. Murray Robinson .......   1998    220,000        --          --            --
   President and .........   1997    220,000     120,000      96,889          --
   Chief Operating Officer   1996    220,000     120,000        --            --

Tom O. Luehder ...........   1998    150,000      25,000      30,000          --
  Senior Vice President ..   1997    150,000      22,500       8,889          --
                             1996    150,000      15,000         --           --

Charles R. Dismuke, Jr ...   1998    165,000        --          --            --
  Senior Vice President ..   1997    160,000      50,000      24,889
                             1996    140,000      40,000      17,777          --

Steven M. Hawkins ........   1998    163,336        --       130,000          --
  Executive Vice President   1997    139,471      40,000      53,000          --
                             1996         (5)         (5)           (5)           (5)
</TABLE>

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

(1)  All stock options reflected on a post-split basis.

(2)  Include  options for 2,666 shares  granted by formula to Mr.  Malkin in his
     capacity as a director of the Company,  concurrently  with identical grants
     to all directors of the Company

(3)  Includes  options for 8,889 shares  granted by formula to Mr. Malkin in his
     capacity as a director of the Company,  concurrently  with identical grants
     to all directors of the Company.

(4)  Director's and attendance fees for serving as a director of the Company.

(5)  Mr. Hawkins was not employed by the Company until September 1996.


Option Grants in Last Fiscal Year

The  only  options   exercisable  into  securities  of  the  Company  are  those
outstanding  under the 1993 Stock  Option Plan  adopted in April 1993 (the "1993
Plan") and the 1995  Long-term  Incentive  Plan (the "LTIP").  The 1993 Plan was
fully  exhausted in 1996. The Company  granted  options for 722,994 Shares under
the LTIP in 1998.  All  options  granted  under  both  plans  vest 20% per annum
commencing  on the first day of the second and each  succeeding  year  following
each grant and expire ten years from the date of grant. Pursuant to the terms of
both plans all  options  granted  before May 8, 1998,  the date of the  Monsanto
merger  agreement,  and outstanding at the merger closing date will become fully
vested due to the acceleration thereof because of a change in control.

The following  table sets forth  certain  information  concerning  stock options
granted during 1998:

                                             OPTION GRANTS IN FISCAL 1998

<TABLE>
<CAPTION>
                                                                                 Potential Realized Value at
                                                                                 Assumed Annual Rates of Stock
                                                                                     Price Appreciation
                       Individual Grants                                             for Option Term (1)
                     -----------------------------------                      ------------------------------
                                   Percentage of
                       Number of   Total Options
                      Securities   Granted to
                      Underlying   Employees in   Exercise      Expiration
Name(2)               Options      Fiscal Year     Price           Date           0%          5%         10%
-------               ----------  -----------     --------      ---------        ---         ---         ---

<S>                      <C>          <C>         <C>             <C>            <C>       <C>        <C>    
Roger D. Malkin ..       2,666        0.37%       37.44           2/26/08         --        63,000     159,000
Tom O. Leudher ...      30,000        4.15%       28.69           2/10/08         --       541,000   1,372,000
Steven M.  Hawkins      80,000       11.07%       26.82          10/28/08         --     1,349,000   3,420,000
                        50,000        6.92%       47.31            5/1/08         --     1,488,000   3,770,000
</TABLE>

------------------------------
(1) The dollar amount under these columns are the result of  calculations  at 5%
and 10% rates  arbitrarily  set by the Securities and Exchange  Commission,  and
therefore, are not intended to forecast possible future appreciation, if any, of
the Company's  stock price.  Any actual gain on exercise of options is dependent
on the future performance of the Company's stock.
(2) No other named officers were granted options in 1998.

Options Exercised In Last Fiscal Year

The  following  table sets forth  certain  information  concerning  stock option
exercises  during 1998 and  unexercised  options  held as of August 31, 1998 for
each of the Named Officers:

                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>

                                                            Number of Securities Underlying         Value of Unexercised
                                                                 Unexercised Options                    In-The-Money
                                                                      FY-End                         Options FY-End  (1)
                         Shares              Gain           ---------------------------        ----------------------------
                         Acquired on    Realized on         #              #                   $              $
                         Exercise         Exercise          Exercisable    Unexercisable       Exercisable    Unexercisable
                         --------       -----------         -----------    -------------       -----------    -------------
<S>                  <C>           <C>                 <C>          <C>               <C>              <C>      
Roger D.Malkin(2)(3)     196,445        $ 6,372,946              21,132       148,444              624,558          4,906,512
F. Murray Robinson       110,045        $ 3,166,993              19,377       100,800              398,732          2,829,050
Tom O. Luehder              -                 -                  14,222        46,000              478,256            942,287
Charles R. Dismuke,Jr.      -                 -                  63,289        32,711            2,181,613            944,811
Steven  M. Hawkins(3)       -                 -                  37,333       146,000              834,912          1,897,088


</TABLE>


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

(1) Based on $42.94 per share,  the August 31, 1998  closing  value as quoted by
the New York Stock Exchange.

(2) According to the terms of Mr. Malkin's options,  all of his options would be
fully exercisable upon his retirement because he is over 65 years of age.

(3)  Computation  excludes 2,666 shares for Mr. Malkin and 50,000 shares for Mr.
Hawkins that are "out-of-the-money."





<PAGE>


                         COMPENSATION PURSUANT TO PLANS

Pension Plan

The Company  maintains a  noncontributory  defined  benefit  plan (the  "Pension
Plan") that covers  substantially all full-time  employees,  including the Named
Officers. All employees of the Company and its domestic  subsidiaries,  who have
both attained age 21 and completed one year of eligibility service, are eligible
to  participate  in the  Pension  Plan.  The  Pension  Plan  provides  a  normal
retirement  benefit (if  employment  terminates on or after age 65) equal to the
sum of: (i) 22.75% of the average compensation [the average of the participant's
five highest  consecutive  calendar  years of earnings,  including  overtime but
excluding bonuses] reduced by 1/25th for each year of credited service less than
25 at normal retirement;  and (ii) 22.75% of average compensation  exceeding the
greater of one-half of average social security covered compensation and $10,000,
reduced  by 1/35th  for each  year of  credited  service  less than 35 at normal
retirement.

The  following  table  shows the  estimated  benefits  payable  in the form of a
single-life annuity upon retirement in specified average  compensation and years
of credited service classifications:

                               PENSION PLAN TABLE
Compensation                 15        20         25          30         35
   $25,000           $    4,333   $   5,777  $   7,221    $  7,528    $ 7,834
    50,000               10,183      13,577     16,971      18,090     19,209
    75,000               16,033      21,377     26,721      28,653     30,584
   100,000               21,883      29,177     36,471      39,215     41,959
   150,000               33,583      44,777     55,971      60,340     64,709
   200,000               34,519      46,025     57,531      62,030     66,529
   250,000               34,519      46,025     57,531      62,030     66,529
   300,000               34,519      46,025     57,531      62,030     66,529
   400,000               34,519      46,025     57,531      62,030     66,529




                                                                               
The above  estimated  annual  benefits  were  calculated  by the actuary for the
Pension Plan.  Benefit amounts shown are the annual pension  benefits payable in
the form of a single-life  annuity for an individual  attaining the age of 65 in
1998. In addition, such amounts reflect the 1998 maximum compensation limitation
under the Internal Revenue Code of 1986, as amended,  and are not subject to any
deduction for social security or other amounts.

The estimated years of credited  service and eligible  average  compensation for
each of the Named  Officers as of January 1, 1998,  the most recent Pension Plan
valuation date, are as follows:

                                            Years of               Average Plan
      Name                                  Credited Service       Compensation


     Roger D. Malkin...........................   28                 $152,000
     F. Murray Robinson........................   10                  152,000
     Tom O. Luehder............................    4                  152,000
     Charles R. Dismuke.........................  21                  132,000
     Steven M. Hawkins.........................    4                  147,500


Supplemental Executive Retirement Plan

The Company adopted a Supplemental  Executive  Retirement  Plan ("SERP"),  which
became  effective  January 1, 1992,  and covers  certain  management  personnel,
including  certain of the Named  Officers.  The SERP  provides  for  payments to
participants in the form of a single-life  annuity,  or as otherwise provided by
the SERP commencing at age 65 or the  participant's  postponed  retirement date.
The following table sets forth the scheduled  estimated annual benefits expected
to be  paid  pursuant  to the  SERP to the  Named  Officers  who  are  currently
participants:

     Name                                      Annual Cash Benefit

      Roger D. Malkin.............................      $12,000
      F. Murray Robinson..........................       29,000


The SERP also provides that on the death of an active employee, the Company will
pay a death benefit to the participant's surviving spouse equal to the actuarial
equivalent  of the  participant's  accrued  benefit,  which  is  based  upon the
participant's  years of service  with the  Company  and the years of service the
participant  would  have  had at age  65,  if  employment  had  continued.  If a
participant's  employment  with the  Company is  terminated  prior to age 65 for
reasons other than death, then the participant shall be paid a vested percentage
of his accrued  benefit  equal to the  participant's  annual cash benefit  above
multiplied by a fraction  (not greater than one),  the numerator of which is the
participant's  years of service as of the date of  termination of employment and
the denominator of which is the  participant's  projected years of service as of
age 65, if employment had not terminated.

Each participant's vested percentage in the SERP is determined as follows:

     Number of Years of Service                      Vested Percentage

     1 but less than 2....................................   20%
     2 but less than 3....................................   40%
     3 but less than 4....................................   60%
     4 but less than 5....................................   80%
     5 or more............................................  100%


Under the terms of the SERP, the Company may discontinue  additional eligibility
and planned  payments under the SERP at any time. The named officers noted above
are fully vested in the SERP.

Defined Contribution Plan

Effective  April 1, 1994, the Company  established a defined  contribution  plan
pursuant to Internal Revenue Code Section 401(k) (the "401(k) Plan"). The 401(k)
Plan covers  substantially all full-time  employees.  Eligible  employees of the
Company  and its  domestic  subsidiaries,  who  have  both  attained  age 21 and
completed one year of service, may participate in the 401(k) Plan. A participant
may elect to contribute up to 18% of their eligible earnings to the 401(k) Plan.
The 401(k) Plan allows the Company to match a maximum of six percent of eligible
employee  contributions.  As of August 31, 1998,  the Company has elected not to
match such contributions.

Incentive Plans

The Company  maintains two  incentive  plans that  compensate  key employees and
directors  through the grant of options to buy shares of Common  Stock.  In July
1993, the Company  adopted the 1993 Stock Option Plan (the "1993 Plan") of which
the  Compensation  Committee of the Board of Directors  have granted the maximum
number of shares permitted (2,560,000). On October 17, 1995, the Company's Board
of Directors  adopted the 1995  Long-term  Incentive Plan (the "LTIP") which the
shareholders  ratified at the 1996  Annual  Meeting.  Pursuant to the LTIP,  the
Board  of  Directors  may  award  stock  options,   stock  appreciation  rights,
restricted  shares  of Common  Stock  and  performance  units to  officers,  key
employees and directors.  Under the LTIP,  2,560,000 common shares are available
for grant. As of August 31, 1998, options for 2,352,988 shares have been granted
under the LTIP.

Under both plans, all options for stock granted vest 20% per annum commencing on
the first day of the second and each  succeeding  year  following each grant and
expire ten years from the date of grant.  Shares  subject to options  and awards
under the LTIP which expire  unexercised are available for new option grants and
awards.  The  number of  shares  available  for  grant  under the 1993 Plan upon
forfeitures of options  outstanding  thereunder  will be reduced to zero and the
granting of options thereunder has ceased.

Director's Compensation

Each Director receives an annual fee of $25,000 and participation fees of $1,000
for each meeting of the Board of Directors  attended.  Directors are  reimbursed
for actual  expenses  incurred in connection  with attending  Board or Committee
meetings.  In  addition,  under the 1993 Stock  Option  Plan,  as amended,  each
present director was granted in June 1994 an option to purchase 53,333 shares at
the fair market price at the date of grant.  Under the 1995 Long-Term  Incentive
Plan,  as amended the initial  option  granted to each new (and present) will be
granted  options for an  additional  2,667 shares in each of the second  through
sixth  years each  director  serves as such (which  began in  February  1997 for
present directors).

ITEM 12.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                     MANAGEMENT

Share Ownership by Principal Stockholders and Management

To the best  knowledge  of the  Company  based  on  information  filed  with the
Securities  and  Exchange  Commission  and  the  Company's  stock  records,  the
following table sets forth, as of October 31, 1998, Shares beneficially owned by
each director, each nominee for director, certain executive officers, any person
owning more than 5% of the Shares individually and by all officers and directors
as a group.
<TABLE>
<CAPTION>
                                                                                  Shares Beneficially Owned
                                                                       Amount of                    Percentage
                                                                       Beneficial                         of
Name and Address of Beneficial Owner or Management                     Ownership                        Class
--------------------------------------------------                     ---------                    ---------
<S>                                                                     <C>                              <C>
John Hancock Mutual Life Insurance Company (1)                          3,166,781                        8.2
Janus Capital Corporation (2)                                           2,971,284                        7.7
Stephens Group, Inc. (3)                                                2,589,137                        6.7
Soros Fund Management (4)                                               2,122,221                        5.5
Monsanto Company (5)(12)                                                1,777,776                        4.6
Roger D. Malkin (6)                                                     1,046,836                        2.7
Joseph M. Murphy (7)                                                      202,398                          *
F. Murray Robinson (6)                                                    159,579                          *
Jon E.M. Jacoby (8)                                                       147,825                          *
Tom O. Luehder (6)                                                           -                             *
Rudi E. Scheidt (9)                                                        82,666                          *
Charles R. Dismuke, Jr. (6)                                                82,112                          *
Steven M. Hawkins (6)                                                        -                             *
Nam-Hai Chua (10)                                                          45,505                          *
Stanley P. Roth (11)                                                       27,500                          *
All Directors and Executive Officers as a Group                         2,491,321                        6.5
   [22 persons] (13)(14)
</TABLE>

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

*      Less than one percent

(1)  The  mailing  address  for  John  Hancock  Mutual  Life  Insurance  Company
("Hancock") is: John Hancock Place, 57th Floor, Boston, Massachusetts 02117.

(2) The mailing address for Janus Capital  Corporation is: 100 Philmore  Street,
Denver, Colorado 80206.

(3) Mr.  Jacoby,  a  director  of  Stephens  Group,  Inc.,  and its  subsidiary,
Stephens,  Inc. owns 147,825 Shares.  See Note 8 below.  The mailing address for
Stephens Group, Inc. and affiliates is: 111 Center Street, Little Rock, Arkansas
72201.

(4) The mailing address for Soros Fund  Management is: 888 Seventh  Avenue,  New
York, New York 10019.

(5) The mailing address for Monsanto  Company is: 800 North Lindbergh Blvd., St.
Louis, Missouri 63167.

(6) The mailing  address  for Messrs.  Malkin,  Robinson,  Leuhder,  Hawkins and
Dismuke is: One Cotton Row, Scott, Mississippi 38772.

(7) The Shares  indicated are owned by Mr.  Murphy's wife. Mr. Murphy  disclaims
beneficial  ownership  of the  202,398  Shares  owned by his wife.  The  mailing
address  for Mr.  Murphy is:  2687 North Ocean  Boulevard,  Boca Raton,  Florida
33431.

(8) Includes: 113,637 Shares owned by Jacoby Enterprises,  Inc., as to which Mr.
Jacoby has sole power to vote and sole power of disposition; 21,713 Shares owned
by Coral  Partners  in which Mr.  Jacoby is a general  partner,  as to which Mr.
Jacoby has  shared  power to vote and shared  power of  disposition,  and 12,475
Shares  owned  beneficially  by Mr.  Jacoby.  Does not include  Shares  owned by
Stephens  Group,  Inc., or other of its affiliates,  except Jacoby  Enterprises,
Inc.,  and Coral  Partners.  See Note 3 above.  The  mailing  address  for Coral
Partners, Jacoby Enterprises, Inc., and Mr. Jacoby is: 111 Center Street, Little
Rock, Arkansas 72201.

(9) The  mailing  address  for Mr.  Scheidt  is: 54 South  White  Station  Road,
Memphis, Tennessee 38117.

(10)  Includes:  10,666  Shares owned by Dr.  Chua's wife and 34,839 Shares held
jointly by Dr. Chua's wife and daughter. Dr. Chua disclaims beneficial ownership
of these Shares.  The mailing  address for Dr. Chua is: c/o  Laboratory of Plant
Molecular Biology,  Rockefeller University, 1230 York Avenue, New York, New York
10021-6399.

(11)  Consists of 27,500  Shares  owned by North  American  Capital  Corporation
("NACC")  as to  which  Mr.  Roth has  sole  power  to vote  and  sole  power of
disposition.  The mailing address for Mr. Roth is: 510 Broad Hollow Road,  Suite
206, Melville, New York 11747.

(12) Excludes  shares  obtained by conversion of Series M Convertible  Preferred
Stock.  If Monsanto  converts  pursuant to the terms of the Preferred  Stock, it
would  receive  800,000  Shares of Common  Stock  which would make its amount of
beneficial ownership 2,577,776 Shares, or 6.8 percent.

(13) Includes: 202,398 Shares owned by the wife of Joseph M. Murphy.

(14) As a group,  the amount shown excludes  options for 721,071 Shares pursuant
to the 1993 Delta and Pine Land  Company  Stock  Option Plan  ("1993  Plan") and
options for 771,945 Shares pursuant to the 1995 Long-Term  Incentive Plan ("1995
Plan").  For each  individual  listed above,  the amounts shown exclude  options
granted  pursuant to the 1993 Plan and 1995 Plan with respect to the  following:
Roger D. Malkin,  21,132; F. Murray Robinson,  19,377; Jon E.M. Jacoby,  44,444;
Tom D Luehder;  Charles R. Dismuke, Jr., 63,289; Rudi E. Scheidt, 44,444; Steven
M. Hawkins, 37,333; Nam-Hai Chua, 44,444; and Stanley P. Roth, 44,444.





<PAGE>

ITEM 13.         CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                              CERTAIN TRANSACTIONS

Consulting Agreement

The Company paid Nam-Hai  Chua, a member of the  Company's  Board of  Directors,
approximately  $4,000 for consulting  fees in 1998 associated with the Company's
effort to enter into joint  ventures  with parties in the  People's  Republic of
China.

Dr. Chua is the Chairman of the Management Board of Directors of IMA and is also
Chairman of the Board of an  affiliate of IMA,  IMAGEN.  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 1998 , 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 the Company's  instruction
related to the  development of certain  technologies  for varietal crops such as
cotton  and  soybeans.  The  Company  paid  $266,000  in 1998 for such  research
projects.


Registration Rights

Hancock has a one-time right to register,  under the Act,  Shares owned by it on
June 28,  1993,  less the  number of Shares  sold by  Hancock  in the  Company's
initial public offering.  All of the expenses of such  registration,  except for
the  cost of  printing  and  Hancock's  counsel,  will  be paid by the  Company.
Hancock's  registration  rights are conditioned on Hancock providing the Company
with a legal opinion that its Shares may not otherwise be publicly sold.

The holder of the  convertible  Series M Non-Voting  Preferred Stock has certain
registration  rights  associated  with the Common Stock into which the Preferred
Stock is  convertible.  The  Preferred  Stock is  convertible  into Common Stock
beginning  upon the  seventh  anniversary  of the  date on  which it was  issued
(February 1996) or the occurrence of certain specified events,  whichever occurs
first.

Transactions with Affiliates and Advances

The  Company  requires  that  transactions  between  the  Company and persons or
entities affiliated with officers,  directors,  employees or stockholders of the
Company be on terms no less  favorable  to the Company than could be obtained in
an arm's-length  transaction with an unaffiliated  party.  Such transactions are
subjected  to  approval  by a  majority  of the  non-employee  directors  of the
Company.  The Board of Directors has adopted  resolutions  prohibiting  advances
without  its  approval,  except for  ordinary  business  and travel  advances in
accordance with the Company's policy.

Section 16(a) Beneficial Ownership Reporting Compliance

Based  solely on  review  of the  copies of  reporting  forms  furnished  to the
Company,  or written  representations  that no forms were required,  the Company
believes that during 1998,  all required  events of its officers,  directors and
10%  stockholders  to the Securities and Exchange  Commission of their ownership
and changes in ownership of Shares (as required pursuant to Section 16(a) of the
Securities  Exchange  Act of 1934) have been filed,  except  that the  following
individuals  filed the  following  number of late  reports  with  respect to the
following  number of  transactions:  three  late Form 4 reports  for Mr.  Murphy
relating to a stock option grant,  stock option  exercise,  and stock gift;  two
each  for  Messrs.  Robinson  (one  late  Form  4  relating  to one  stock  gift
transaction  and five stock sale  transactions,  and one late Form 4 relating to
two stock sale  transactions) and Ellis (two late Form 4's relating to two stock
gift transactions); and one each for Mssrs. Malkin, Scheidt, Chua, Jacoby, Roth,
Hawkins,  Luehder,  Shackelford and Jagodinski  relating to an option  exercise)
each relating to stock option grants except as otherwise indicated.



                                     PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                FORM 8-K

     (a)          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 Public Accountants

                  Consolidated  Statements  of  Income - for  each of the  three
                     years in the period ended August 31, 1998

                  Consolidated Balance Sheets - August 31, 1997 and 1998

                  Consolidated  Statements of Cash Flows - for each of the three
                     years in the period ended August 31, 1998

                  Consolidated  Statements of Stockholders' Equity - for each of
                     the three years in the period ended August 31, 1998

                  Notes to Consolidated Financial Statements

                  2.  Financial  Statement  Schedule - the  following  financial
                  statement   schedule  of  Delta  and  Pine  Land  Company  and
                  subsidiaries are submitted in response to Part IV, Item 14:

                  Report of Independent Public Accountants....................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 the Delta and Pine Land Company filed
     herewith are listed on Page 59.

     (b)          4.  Reports on Form 8-K

     No reports on Form 8-K were filed during the quarter ended August 31, 1998.

                                   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 24, 1998.

DELTA AND PINE LAND COMPANY
(Registrant)

/s/ Roger D. Malkin
By:  Roger D. Malkin, Chairman of the Board and
       Chief Executive Officer

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/ Roger D. Malkin         Chairman of the Board              November 24, 1998
-------------------         and Chief Executive Officer
Roger D. Malkin             (Principal Executive Officer)

 /s/ W. Thomas Jagodinski   Vice President-Finance and         November 24, 1998
-------------------------   Treasurer (Principal Financial
W. Thomas Jagodinski        and Accounting Officer)       
               

/s/ Nam-Hai Chua            Director                           November 24, 1998
-------------------
Nam-Hai Chua

/s/ Jon E.M. Jacoby         Director                           November 24, 1998
------------------------                                            
Jon E.M. Jacoby

 /s/ Joseph M. Murphy       Director                           November 24, 1998
--------------------------
Joseph M. Murphy

 /s/ Stanley P. Roth        Director                           November 24, 1998
-------------------------
Stanley P. Roth

 /s/ Rudi E. Scheidt        Director                           November 24, 1998
-------------------- 
Rudi E. Scheidt




<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


TO DELTA AND PINE LAND COMPANY:

We have audited in accordance with generally  accepted auditing  standards,  the
financial  statements of Delta and Pine Land Company included in this Form 10-K.
Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements taken as a whole. The schedule listed in the Index of Part
IV, Item  14(a)2,  is the  responsibility  of the  Company's  management  and is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and are not part of the  basic  financial  statements.  The
schedule has been subjected to the auditing  procedures  applied in the audit of
the  basic  financial  statements  and,  in our  opinion,  fairly  states in all
material  respects  the  financial  data  required  to be set forth  therein  in
relation to the basic financial statements taken as a whole.




Arthur Andersen LLP

Memphis, Tennessee,
October 16, 1998.





<PAGE>


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

<TABLE>
<CAPTION>
                                                                                                    (In thousands)

 Column A                             Column B                         Column C        Column D     Column E        




                                                                       ADDITIONS

                                        Balance at       Charged to     Charged                      Balance
                                        Beginning of     Costs and      to Other                     at end of
Description                             Period           Expenses       Accounts      Deductions     Period

Fiscal year ended August 31, 1996

<S>                                    <C>             <C>               <C>       <C>               <C>     
 Allowance for doubtful accounts ..    $    219        $     200         $  --      $     (40)(a)     $    379

 Inventory valuation reserve .......   $  2,822        $     850         $  --      $  (1,738)(b)     $  1,934

Fiscal year ended August 31, 1997

    Allowance for doubtful accounts    $    379        $      --         $  --      $    (98)(a)      $    281

    Inventory valuation reserve ....   $  1,934        $3,829(c)         $  --      $ (3,238)(d)      $  2,525

Fiscal  year ended August 31, 1998

    Allowance for doubtful accounts    $    281        $     200         $  --      $      (113)      $    368

    Inventory valuation reserve        $  2,525        $17,527(e)         $  --      $(10,130)(e)      $  9,922
</TABLE>

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


(a)  Write off of uncollectible accounts, net of recoveries

(b)  Primarily the disposal of excess corn and sorghum inventory

(c)  Reserve  of  cottonseed  as a result of  production  and cost  optimization
program

(d) Disposal of corn and sorghum inventory  ($1,409) and write off of cottonseed
inventory ($1,829)

(e) Reserve of cottonseed  resulting  from  reduction in cotton acreage in 1998,
the  further  realignment  of the  Company's  product  line  to  seed  with  new
technologies  and the  recall  of  certain  products  that did not meet  quality
standards.







<PAGE>



                                      INDEX
                     EXHIBITS TO ANNUAL REPORT ON FORM 10-K
                           YEAR ENDED AUGUST 31, 1998
                           DELTA AND PINE LAND COMPANY


Exhibits                       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    Letter from  Registrant to John Hancock  Mutual Life  Insurance  Company
        regarding certain registration rights dated June 28, 1993.

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.(11)

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   Lease dated  March 25,  1995,  between  Registrant,  as Lessee,  and The
        Prudential  Insurance  Company  of  America  ("Prudential"),  as  Lessor
        regarding  approximately  2,500-acre  farm,  certain  grain bins,  and a
        certain research facility in Scott, Mississippi.(5)

10.02   License  Agreement  dated  February  1,  1990,  between  Registrant,  as
        Licensor, and Semillas Deltacol, Ltd., as Licensee, regarding operations
        in Columbia.

10.03   License Agreement dated March 5, 1990, between  Registrant,  as Licensor
        and Helena Chemical Company d/b/a HyPerformer Seed Company, as Licensee.

10.04   License Agreement dated March 16, 1992,  between Registrant and Monsanto
        Company,  as amended by the  Agreement  on  Modified  Terms for  License
        Agreement  Dated  October  11,  1993  (confidential  treatment  has been
        requested for portions of this exhibit  pursuant to Rule 24b-2 under the
        Securities and Exchange Act of 1934). (1),(7)

10.05   Incentive Bonus Program.(1),(6)

10.06   Retirement Plan of the Company,  dated January 2, 1992,  Amendment No. 1
        to the Plan  dated  April 30,  1992,  Amendment  No. 2 to the Plan dated
        December  20, 1992,  and  Amendment  No. 3 to the Plan dated  October 6,
        1994.(1),(5)

10.07   Agreement between Educo, Inc. and Southwide dated June 1, 1975, relating
        to employer-sponsored  college scholarships and medical expense plan for
        children of certain employees of Registrant.

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

10.09   Tax  Sharing  Agreement  dated  May  24,  1993,  between  Southwide  and
        Registrant.

10.10  1993 Stock Option Plan of Registrant, as adopted on June 11, 1993.(1),(6)

10.11   Asset  Purchase  agreement  between  Delta  and Pine  Land  Company  and
        Cargill, Inc.(8)

10.12   Herbicide-Tolerant  Cotton  License  Agreement  dated  August 22,  1994,
        between the Company and E.I. Dupont De Nemours and Company (confidential
        treatment has been  requested  for portions of this exhibit  pursuant to
        the Rule 24b-2 under the Securities and Exchange Act of 1934).(7)

10.13   1994 Saving Plan of Registrant,  as adopted on April 1, 1994,  Amendment
        No. 1 dated May 1, 1994.(5),(6)

10.14   $50,000,000  Revolving Credit Agreement  between  Registrant and Nations
        Bank dated November 15, 1995.(5)

10.15   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)

10.16   Trademark  License Agreement dated February 2, 1996 between Monsanto and
        the Company.(3)

10.17   Registration  Rights  Agreement  between the Company and Monsanto  dated
        February 2, 1996.(3)

10.18   Temporary  Services  Agreement dated February 2, 1996 between  Monsanto,
        the Company, and PTC.(3)

10.19   Research  Facility  Lease with Option to Purchase dated February 2, 1996
        between Monsanto and PTC.(3)

10.20   Greenhouse Lease dated February 2, 1996 between Monsanto and PTC.(3)

10.21   Research Agreement dated February 2, 1996 between Monsanto and PTC.(3)

10.22   Partnership  Agreement  dated  February 2, 1996  between the Company and
        Monsanto.(3)

10.23   Marketing Services Agreement dated February 2, 1996 between the Company,
        Monsanto and D&M Partners.(3)

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

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

10.26   Option  Agreement  dated  February  2,  1996  between  Monsanto  and the
        Company.(3),(6)

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

10.28   Delta and Pine Land Company 1995 Long-Term Incentive Plan, as adopted on
        February 6, 1996.(6),(10)

11.01   Statement Re: Computation of Earnings per Share.(11)

21.01   Subsidiaries of the Registrant. (11)

23.01   Consent of Independent Public Accountants. (11)

27.01   Financial Data Schedule. (11)

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

(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 filed February 19, 1996.

(4)  Incorporated by reference from Form 8-A filed September 3, 1996.

(5)  Incorporated by reference from Form 10-K filed November 22, 1995.

(6)  Represents management contract or compensatory plan.

(7)  Incorporated by reference from Form 10-Q filed July 14, 1995.

(8)  Incorporated by reference from Form 8-K filed May 16, 1994.

(9)  Incorporated by reference from Form 8-K filed June 4, 1996.

(10) Incorporated by reference from Form 10-K filed November 27, 1996.

(11) Filed herewith.


<PAGE>


AMENDMENT NO. 2 TO THE RIGHTS AGREEMENT                             Exhibit 4.06


         This Amendment (the "Second Amendment"),  dated as of July 10, 1998, is
entered into by and between Delta and Pine Land Company, a Delaware  Corporation
(the  "Company"),  and The Harris Trust and Savings  Bank,  an Illinois  banking
corporation, as Rights Agent (the "Rights Agent").

                              W I T N E S S E T H:

         WHEREAS,  the Company and the Rights  Agent have  entered into a Rights
Agreement,  dated as of  August  13,  1996 (as  amended  pursuant  to the  First
Amendment referred to below, the "Agreement");

         WHEREAS,  the Company and Monsanto  Company  ("Monsanto")  have entered
into an Agreement and Plan of Merger, dated as of May 8, 1998, providing for the
merger of the Company  with and into  Monsanto  (the  "Merger") on the terms and
subject to the conditions set forth therein;

         WHEREAS,  the Company and the Rights Agent have entered into  Amendment
No. 1 to the Rights Agreement,  dated as of May 8, 1988 (the "First Amendment"),
to eliminate the  possibility of Monsanto being deemed an Acquiring  Person as a
result of the Merger and to amend related provisions of the Agreement;

         WHEREAS,  Monsanto and American Home Products  Corporation ("AHP") have
entered into an Agreement and Plan of Merger, dated as of May 31, 1998 (the "AHP
Merger Agreement"),  which provides for the merger of a wholly-owned  subsidiary
of AHP with and into Monsanto (the "AHP Merger");

         WHEREAS,  the  Company  wishes  to  effect,  and  deems  necessary  and
desirable,  an amendment of the Agreement to eliminate the  possibility,  if the
AHP Merger is consummated prior to the Merger, of AHP (or any other Affiliate or
Associate of  Monsanto),  being  deemed an  Acquiring  Person as a result of the
Merger and to amend related provisions of the Agreement; and

         WHEREAS,  Section 27 of the  Agreement  provides  that the  Company may
supplement or amend the Agreement  without the approval of any holders of Rights
in order to make any provisions with respect to the Rights which the Company may
deem necessary or desirable;

         NOW  THEREFORE,  the  Company  and the Rights  Agent  hereby  amend the
Agreement as follows:

     1. Capitalized terms used in the Second Amendment without  definition shall
have the meanings given to them in the Agreement.


               

<PAGE>



     2. Section 1(a) of the Agreement  (the  definition  of the term  "Acquiring
Person")  is amended by  deleting  from the final  sentence  thereof  the phrase
"subsidiary  of Buyer (any such  subsidiary  being referred to herein as "Merger
Sub")  established to effect the Merger (as defined herein)" and inserting after
the word "any" in such final sentence thereof the phrase "Affiliate or Associate
of Buyer".

     3. The term  "Agreement" as used in the Agreement  shall be deemed to refer
to the Agreement as amended hereby.

     4. This Second Amendment shall be governed by and constructed in accordance
with the laws of the State of Delaware.

     5. This  Second  Amendment  shall be  effective  as of the date first above
written,  and,  except as set forth herein,  the Agreement  shall remain in full
force and effect and shall be otherwise unaffected hereby.

         6. This Second  Amendment may be executed in two or more  counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

                                                       

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused the Second Amendment
to be duly executed as of this 10th day of July, 1998.

                              DELTA AND PINE LAND COMPANY

                              By:  /s/ Roger D. Malkin
                                 -------------------------
                                   Name: Roger D. Malkin
                                        ------------------
                                   Title: Chairman and Chief Executive Officer
                                        ------------------

                              THE HARRIS TRUST AND SAVINGS
                                       BANK



                              By:  /s/ Ginger L. Lawrence
                                 -------------------------
                                   Name: Ginger L. Lawrence
                                        ------------------
                                   Title: Trust Officer
                                        ------------------






<PAGE>

EXHIBIT 11.01

                        COMPUTATION OF EARNINGS PER SHARE
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>

                                             FOR THE TWELVE MONTHS ENDED
                                             ---------------------------
                                             August 31 August 31  August 31  
                                              1996      1997      1998
                                             ------------------------------
<S>                                         <C>       <C>        <C>   
BASIC EARNINGS PER SHARE:
 WEIGHTED AVERAGE NUMBER OF SHARES OF
   COMMON STOCK OUTSTANDING                 ---------------------------
   DURING THE PERIOD ....................    37,292    37,579    38,011
                                             ==========================

NET INCOME APPLICABLE TO COMMON SHARES ..   $15,237   $ 6,850   $ 1,783
                                             ==========================
   BASIC EARNINGS PER SHARE ............    $  0.41   $  0.18   $  0.05
                                             ==========================

DILUTED EARNINGS PER SHARE:


WEIGHTED AVERAGE NUMBER OF SHARES
   OF COMMON STOCK OUTSTANDING
   DURING THE PERIOD ....................    37,292    37,579    38,011

WEIGHTED AVERAGE NUMBER OF SHARES
   ATTRIBUTED TO CONVERTIBLE
   PREFERRED STOCK ......................       467       800       800


WEIGHTED AVERAGE NUMBER OF SHARES
   ATTRIBUTED TO OPTIONS ................     1,505     1,484     1,762

WEIGHTED AVERAGE NUMBER OF SHARES
   OF COMMON STOCK OUTSTANDING
   DURING THE PERIOD FOR COMPUTATION         --------------------------
   OF DILUTED EARNINGS PER SHARE ........    39,264    39,863    40,573
                                             ==========================

   NET INCOME APPLICABLE TO COMMON SHARES   $15,276   $ 6,913   $ 1,879
                                             ==========================
   DILUTED EARNINGS PER SHARE ...........   $  0.39   $  0.17   $  0.04
                                             ==========================
</TABLE>



<PAGE>
                                  EXHIBIT 21.01
                           SUBSIDIARIES OF REGISTRANT
      SUBSIDIARY                                         PLACE OF INCORPORATION
--------------------------------------------------------------------------------

ATLED CORPORATION
                                                          USA
D&M INTERNATIONAL LLC
                                                          USA
D&M PARTNERS
                                                          USA
D&PL ARGENTINA, INC.
                                                          USA
D&PL CHINA, INC.
                                                          USA
D&PL CHINA PTE, LTD.
                                                       SINGAPORE
D&PL INVESTING CORP.
                                                          USA
D&PL INVESTMENTS, INC.
                                                          USA
D&PL MEXICO, INC.
                                                          USA
DELTAPINE PARAGUAY, INC.
                                                          USA
D&PL SOUTH AFRICA, INC.
                                                          USA
D&PL INTERNATIONAL TECHNOLOGY CORP.
                                                          USA
DELTA AND PINE LAND INTERNATIONAL, LTD.
                                                    VIRGIN ISLANDS
DELTA PINE DE MEXICO, S.A. de C.V.
                                                        MEXICO
DELTAPINE AUSTRALIA PTY. LIMITED
                                                       AUSTRALIA
GREENFIELD SEED COMPANY
                                                          USA
HEBEI JI DAI COTTONSEED TECHNOLOGY COMPANY, LTD.
                                                         CHINA
PAYMASTER TECHNOLOGY CORP.
                                                          USA
TURK DELTAPINE, INC.
                                                          USA
SURE GROW SEED, INC.
                                                          USA
ELLIS BROTHERS SEED, INC.
                                                          USA
ARIZONA PROCESSING, INC.
                                                          USA
MISSISSIPPI SEED, INC.
                                                          USA
D&PL SEMILLAS LIMITADA
                                                      COSTA RICA
CDM MANDYU S.R.L.
                                                       ARGENTINA
DELTA & PINE LAND HELLAS MONOPROSOPI E.P.E.
                                                        GREECE
D&PL BRASIL, LTDA
                                                        BRAZIL
D&PL ESPANA S.R.L.
                                                         SPAIN
ANHUI AN DAI COTTONSEED TECHNOLOGY COMPANY, LTD.
                                                         CHINA
SG SEED., INC.
                                                          USA
D&M  BRASIL, LTDA
                                                        BRAZIL
MDM MAEDA DELTAPINE MONSANTO ALGODAO LTDA
                                                        BRAZIL







<PAGE>


                                                                   EXHIBIT 23.01

                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS



As independent public accountants, we hereby consent to the incorporation of our
report,  dated October 16, 1998, included in this Form 10-K, into Delta and Pine
Land's previously filed Registration Statement File No. 333-21049.



Arthur Andersen LLP


Memphis, Tennessee,
November 20, 1998.






<PAGE>