BY-LAWS

                                       of

                                   AGWAY INC.

                            As Amended to May 2, 2002
                            -------------------------

                                     GENERAL


                  1.1   Certificate  of   Incorporation.   The   certificate  of
                        --------------------------------
incorporation  of the corporation is hereby made a part of these by-laws and all
matters  hereinafter  contained  in  these  by-laws  shall  be  subject  to such
provisions in regard  thereto,  if any, as are set forth in the  certificate  of
incorporation.   All   references  in  these  by-laws  to  the   certificate  of
incorporation  shall be construed to mean the  certificate of  incorporation  as
from time to time amended.  The name and purposes of the corporation shall be as
set forth in the certificate of incorporation.

                  1.2      Definitions.  As used in these by-laws, the following
                           -----------
terms have the following meanings:

                          (a)  "Person" means any individual, partnership, firm,
corporation, association, or any other form of business organization.

                          (b)  "Farmer"    means    any    person  who  produces
agricultural products for sale.

                          (c)  "Member"   means   any   person    meeting    the
qualifications  specified  in  section  2.1  of these by-laws;  and for purposes
solely of sections 9.1-9.4 of these by-laws, also includes any contract patron.

                          (d)  "Contract Patron" means any person who is a party
to  a  contract  with  the  corporation  providing  for the payment of patronage
refunds authorized by section 9.6 of these by-laws.

                                   MEMBERSHIP

                  2.1     Members. The following persons shall be members of the
                          -------
corporation:

                          (a)  Any farmer or cooperative organization of farmers
which:



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                               (1)  is  a  record holder of one share of $25 par
value membership common stock of this corporation, and

                               (2)  has purchased farm supplies or farm services
or has marketed  farm  products  through this  corporation  since the  beginning
of the preceding fiscal year of the corporation.

                  A cooperative  organization  of farmers,  which acts only as a
dealer  of the  corporation  in the  distribution  of farm  supplies,  shall not
thereby be qualified for membership.

                  2.2   Non-Members. All persons or organizations, not qualified
                        -----------
for membership  under section 2.1 of these  by-laws,  who shall purchase from or
market through the  corporation  shall be non-members of the  corporation,  and,
except  in the case of  contract  patrons,  shall  not be  entitled  to share in
refunds based on their patronage.

                  2.3   Privileges of Membership.   Each  member  shall have the
                        ------------------------
following rights and privileges:

                       (a)   As  a  stockholder,  to  participate in and vote at
meetings of stockholders as provided in section 2.4 of these by-laws.

                       (b)   To  participate in patronage refunds as provided in
sections 9.1-9.5 of these by-laws.

                  2.4   Voting.
                        ------
                       (a)   All  voting  rights  shall be vested in the $25 par
value membership  common  stock of  the corporation,  the record holder of which
shall be entitled to only one vote to be cast by the holder thereof  in  person,
or by proxy, at any meeting of  stockholders;  each holder of membership  common
stock shall be entitled to only one vote  regardless  of  the  number  of shares
held.

                       (b)   At any meeting of stockholders at which there is an
election  of directors, directors shall be elected by a vote of the holders of a
plurality of the outstanding shares present  in person or  represented  by proxy
at the meeting and entitled to vote thereon.

                       (c)   Except  as  otherwise  provided  by  the  laws   of
Delaware,  the certificate of incorporation or these by-laws,  all other actions
taken at a meeting of  stockholders  shall be determined by a majority vote at a
meeting at which a quorum is present.


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                  2.5   Representative of a Member or Stockholder. If any member
                        -----------------------------------------
or stockholder is other than a natural person, such member or stockholder may be
represented by any officer thereof or by any other individual duly authorized by
a writing executed and filed with the secretary of the corporation.

                  2.6   Non-Transferability  of Membership.  No membership shall
                        ----------------------------------
be assigned  or  transferred either voluntarily or involuntarily or by operation
of law.

                  2.7   Termination  of  Membership.   A  membership  shall   be
                        ---------------------------
terminated:

                        (a)   By  transfer  or  the  tender  for purchase by the
corporation by a member of the member's share of $25 par value membership common
stock of the corporation, such termination to be effective upon the recording of
such transfer or purchase upon the stock records of the corporation.

                        (b)   By  the  call for redemption by the corporation of
the member's share of $25 par value  membership  common stock of the corporation
because  the person has ceased to be a member of the  corporation  as defined in
section 2.1 of these by-laws.

                        (c)   By  the  call for redemption by the corporation of
the member's share of $25 par value  membership  common stock of the corporation
because such  redemption is necessary to maintain the status of the  corporation
as an agricultural cooperative under applicable law.

                  2.8   Membership Common Stock.  The ownership of $25 par value
                        -----------------------
membership common stock of the corporation is limited to one share per holder.

                      CAPITAL STOCK AND PATRONS' INTERESTS

                  3.1  Capital Stock. The amount of the authorized capital stock
                       -------------
and the par  value  of the  shares  shall  be as  fixed  in the  certificate  of
incorporation. The issuance of any shares of capital stock of any class shall be
authorized by the board of directors by resolution  fixing the consideration for
such issue.

                  3.2  Certificates  of  Stock.  Certificates  of stock  will be
                       -----------------------
signed in the name of the corporation by the president or a  vice-president  and
the  treasurer  or an  assistant  treasurer  or the  secretary  or an  assistant
secretary. Such signatures may be facsimile.  Certificates shall be numbered and
registered in the order in which they are issued and the seal of the corporation
shall be affixed thereto.



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                  Notwithstanding  anything to the  contrary in this section 3.2
of these  by- laws,  certificates  of stock  shall be in such form as shall,  in
conformity to law, be prescribed from time to time by the board of directors.

                  3.3   Loss of  Certificate.  In case  of the  alleged  loss or
                        --------------------
destruction  or of  the  mutilation  of a  certificate  of  stock,  a  duplicate
certificate  may be issued in place thereof,  upon such terms in conformity with
law as the board of directors may  prescribe.  The  corporation  may issue a new
certificate of stock in the place of any certificate  theretofore  issued by it,
alleged to have been lost, stolen or destroyed,  and the corporation may, in its
discretion  and as a condition  precedent to the issuance  thereof,  require the
owner of the  lost,  stolen  or  destroyed  certificate,  or the  owner's  legal
representative,  to give the corporation (i) an affidavit (in form and substance
satisfactory to the  corporation)  describing the loss,  theft or destruction of
any such certificate,  and/or (ii) a bond sufficient to indemnify it against any
claim  that may be made  against it on account  of the  alleged  loss,  theft or
destruction of any such certificate or the issuance of such new certificate.

                  3.4   Transfer of  Shares  of  Stock.  Shares  of stock of the
                        -------------------------------
corporation  shall  be  transferable  only on the  books of the  corporation  by
assignment  in  writing  by the owner  thereof,  the  owner's  attorney  legally
constituted,   or  the  owner's  legal   representatives,   upon  surrender  and
cancellation of the certificates therefor and, in the case of common stock, only
with the written  consent of the  corporation,  endorsed on the  certificate  of
stock. Any actual or attempted transfer of the corporation's  stock in violation
of this Section 3.4 shall be void and the  corporation  shall treat the original
owner as the  continuing  owner of the stock for all purposes.  Shares of common
stock may not be transferred except absolutely. The corporation and its transfer
agents and  registrars,  if any, shall be entitled to treat the holder of record
of any share or shares of stock as the absolute  owner  thereof for all purposes
except as otherwise expressly provided by the laws of the State of Delaware.

                  3.5   Redemption or Purchase of Shares of Stock.  Whenever any
                        -----------------------------------------
stock is called by the corporation for redemption, or whenever any $25 par value
membership  common  stock  held by a person  who has  ceased  to be a member  is
presented  by  the  holder  for  sale  to  the  corporation,   the  certificates
representing  such stock duly endorsed for transfer and bearing any  appropriate
transfer stamps shall be delivered at the principal office of the corporation or
at  such  bank  or  trust  company  as  may be  specified  in  the  call  by the
corporation. Payment for any stock so delivered shall be made by the corporation
promptly  after  such  delivery.  After  call duly made in  accordance  with the
foregoing  provisions  (unless  such  stock  shall have been duly  delivered  as
required  by such call and the  corporation  shall have  failed to make  payment
therefor  within one week after such  delivery),  the stock covered by such call
shall be deemed to have been  purchased by the  corporation on the date fixed by
the call for  redemption and the holder thereof shall not thereafter be entitled
to vote in


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respect to such stock,  or otherwise to enjoy any of the privileges and benefits
of ownership  thereof,  but only to receive,  after delivery of the certificates
therefor, payment for such stock as hereinbefore provided.

                  3.6   Record Date. The board of directors may fix in advance a
                        -----------
date not exceeding  sixty (60) nor less than ten (10) days preceding the date of
any meeting of the stockholders,  or not exceeding sixty (60) days preceding the
date for payment of any dividend,  as a record date for the determination of the
stockholders  entitled to notice of, and to vote at any such meeting or entitled
to receive a payment of any such  dividend;  and in such case such  stockholders
and only such  stockholders  as shall be  stockholders  of record on the date so
fixed shall be entitled  to such notice of, and to vote at such  meeting,  or to
receive payment of such dividend,  notwithstanding  any transfer of any stock on
the books of the corporation after such record date so fixed.

                  3.7   Rights, Limitations and Priorities of Patrons' Interest.
                        -------------------------------------------------------

                        (a)  Revolving   Fund   Certificates.    Revolving  fund
                             -------------------------------
certificates  issued by any  predecessor  corporation  in lieu of cash patronage
refunds,  or by this corporation in exchange for such  certificates  issued by a
predecessor corporation, shall be redeemed at face amount, fully or pro rata, in
the order of  issuance  by year if and when the board of  directors  in its sole
discretion  considers  the funds  represented  thereby no longer  necessary  for
corporate  purposes.  In the event of dissolution,  such  certificates  shall be
retired in full or on a pro rata basis.  No interest  shall be paid on revolving
fund certificates.

                        (b)  Retained  Margins  and Patrons' Equities.  Retained
                             ----------------------------------------
margins  (any net margin  retained by the  corporation  or any  predecessor  and
apportioned  to  patrons  on the  books  of the  corporation  or of  predecessor
corporations,  but not  allocated to patrons in the form of any written  notice)
and patrons' equities (retained net margin of the corporation or any predecessor
allocated to patrons in the form of a written notice other than a revolving fund
certificate) constitute the residual equity of the corporation which, subject to
reduction by losses,  shall be held for the benefit of patrons,  past as well as
present,  having an interest therein pursuant to the provisions of these by-laws
or the by-laws of any  predecessor  corporation.  Retained  margins and patrons'
equities  entitle the holders  thereof to the same  rights and  privileges,  and
neither shall enjoy any preference  over the other.  No person shall be entitled
to any  distribution  of assets  with  respect of  retained  margins or patrons'
equities  prior  to  the  dissolution  of  the  corporation.  In  the  event  of
dissolution,  after payment in full of all debts and of any amounts to which the
holders of preferred stock,  revolving fund  certificates and common stock shall
be entitled pursuant to the provisions of these by-laws, the remaining assets of
the corporation shall be distributed  proportionately among those persons having
interests in retained margins


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and patrons'  equities and in accordance with such interests as reflected on the
books of the corporation and predecessor corporations.

                            MEETINGS OF STOCKHOLDERS

                  4.1   Annual Meeting. The annual meeting of stockholders shall
                        --------------
be held each year on a date and at a time  designated by the board of directors.
The annual  meeting shall be held at such place,  within or without the State of
Delaware, or, if so determined by the board of directors in its sole discretion,
at no place (but  rather by means of remote  communication),  as may be fixed by
the board of directors. At the meeting, directors shall be elected and any other
business  properly  brought before the meeting  pursuant to these by-laws may be
transacted.

                  4.2   Special Meeting.  Except as  otherwise  provided  in the
                        ---------------
Certificate  of  Incorporation  or  in  these  by-laws,  a  special  meeting  of
stockholders  for the  transaction  of business as may properly  come before the
meeting may be called at any time by the chairman,  or in the chairman's absence
by the  vice-chairman,  or by a majority  of the board of  directors.  Only such
business may be transacted as is specified in the notice of the special meeting.
The board of directors  or, in the absence of action by the board of  directors,
the chairman of the board or, in the chairman's absence the vice-chairman, shall
have the sole  power to  determine  the  time,  place  and date for any  special
meeting of stockholders.  Following such determination,  it shall be the duty of
the secretary to cause notice to be given to the  stockholders  entitled to vote
at such meeting  that a meeting will be held at the time,  place and date and in
accordance  with the record date  determined by the board of directors or by the
chairman of the board, or in the chairman's absence by the vice- chairman.

                  4.3    Notice of   Meetings.   Notice  of  all   meetings   of
                         --------------------
stockholders,  stating the time,  place,  if any,  date, and the means of remote
communication,  if any, by which stockholders and proxy holders may be deemed to
be  present in person and vote at such  meeting  and the place  within the city,
other  municipality  or  community  or  electronic  network at which the list of
stockholders  may be examined,  shall be delivered in accordance with applicable
law to each  stockholder  entitled  to vote not less than ten (10) days nor more
than sixty (60) days  before  the time of such  meeting  unless the lapse of the
prescribed period of time shall have been waived.

                  4.4   Adjournment and  Notice.  Any  meeting of  stockholders,
                        -----------------------
annual or special, may be adjourned from time to time solely by the chair of the
meeting  because  of the  absence  of a quorum  or for any other  reason  and to
reconvene  at the  same or  some  other  time,  date  and  place,  if  any.  The
stockholders  present at a meeting  shall not have the  authority to adjourn the
meeting. If the time, date, and place, if any, thereof,  and the means of remote
communication, if any, by which the stockholders


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and the proxy holders may be deemed to be present and in person and vote at such
adjourned meeting are announced at the meeting at which the adjournment is taken
and the  adjournment  is for less than thirty (30) days, no notice need be given
of any such adjourned  meeting.  If the adjournment is for more than thirty (30)
days,  if  the  time,   date  and  place,  if  any,  and  the  means  of  remote
communication,  if any, by which the  stockholders  and the proxy holders may be
deemed to be present and in person are not announced at the meeting at which the
adjournment is taken, or if after the adjournment a new record date is fixed for
the adjourned  meeting,  then notice shall be given by the Secretary as required
for the original meeting.

                  4.5   Order of Business.  Meetings  of  stockholders  shall be
                        -----------------
presided over by the  vice-chairman  of the board or by another chair designated
by the board of  directors.  The date and time of the opening and closing of the
polls for each matter upon which the  stockholders  will vote at a meeting shall
be  determined  by the chair of the meeting and  announced at the  meeting.  The
board of directors may adopt by resolution  such rules and  regulations  for the
conduct of the  meeting of  stockholders  as it shall deem  appropriate.  Unless
otherwise   determined  by  the  board  of   directors,   the  chairman  of  the
stockholders'  meeting shall have the exclusive  right to determine the order of
business and to prescribe other such rules, regulations and procedures and shall
have the authority in his or her  discretion to regulate the conduct of any such
meeting. Such rules, regulations or procedures,  whether adopted by the board of
directors  or  prescribed  by the chair of the  meeting,  may  include,  without
limitation, the following: (i) rules and procedures for maintaining order at the
meeting and the safety of those  present;  (ii)  limitations on attendance at or
participation in the meeting to stockholders of record of the corporation, their
duly  authorized and  constituted  proxies or such other persons as the chair of
the meeting shall  determine;  (iii)  restrictions on entry to the meeting after
the time fixed for the  commencement  thereof;  and (iv) limitations on the time
allotted to  questions  or comments  by  participants.  Unless and to the extent
determined  by the board of directors  or the chair of the meeting,  meetings of
stockholders  shall not be required to be held in  accordance  with the rules of
parliamentary procedure.  The secretary of the corporation,  or any other person
appointed by the chair of the meeting, shall act as secretary of each meeting.

                  4.6   Quorum. The  presence  in  person  or  by  proxy  at any
                        ------
meeting of  stockholders  of the greater of (i) one hundred  (100)  persons each
holding a share of $25 par value  membership  common stock,  or (ii) the minimum
number of  stockholders  required  under  applicable  law to establish a quorum,
shall  constitute a quorum for the  transaction  of  business.  The chair of the
meeting  shall have the power and duty to determine  whether a quorum is present
at any meeting of stockholders.  The  stockholders  present at a duly called and
held  meeting at which a quorum is present may  continue  to do  business  until
adjournment  notwithstanding the subsequent  withdrawal of stockholders from the
meeting.  Shares of its own stock  belonging  to the  corporation  or to another
corporation, if a majority of the shares entitled to vote


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in the  election of  directors of such other  corporation  is held,  directly or
indirectly, by the corporation, shall neither be entitled to vote nor be counted
for quorum purposes;  provided,  however, that the foregoing shall not limit the
right of the  corporation  or any  subsidiary of the  corporation to vote stock,
including,  but not  limited  to,  its  own  stock,  held  by it in a  fiduciary
capacity.

                  4.7   Postponement or Cancellation of Meeting.  Any previously
                        ---------------------------------------
scheduled  annual or special  meeting of the  stockholders  may be  postponed or
canceled by resolution of the board of directors  upon public notice given prior
to the time previously scheduled for such meeting of stockholders.

                  4.8   Inspectors of  Election.  In advance  of any  meeting of
                        -----------------------
stockholders,  the board of directors may appoint  Inspectors of Election to act
at such meeting or any adjournment thereof. If Inspectors of Election are not so
appointed,  the  person  acting  as chair of any such  meeting  may,  and on the
request of any stockholder or proxy holder shall, make such  appointment.  There
shall be at least two (2)  Inspectors of Election at any such  meeting.  In case
any person  appointed as  Inspector of Election  shall fail to appear or to act,
the vacancy may be filled by the person acting as chair of the meeting.

                  4.9    Notice of Stockholder Business.
                         ------------------------------

                        (a)    At  an  annual  meeting of the stockholders, only
such business shall be conducted as shall have been properly  brought before the
meeting.  To be properly brought before an annual meeting,  business must be (i)
specified in the notice of meeting (or any  supplement  thereto)  given by or at
the  direction  of the  board of  directors  (or any duly  authorized  committee
thereof),  (ii)  otherwise  properly  brought  before  the  meeting by or at the
direction of the board of directors (or any duly authorized  committee thereof),
or (iii)  otherwise  properly be requested to be brought before the meeting by a
stockholder in compliance with the procedures set forth in this  paragraph.  For
business to be properly  requested to be brought  before an annual  meeting by a
stockholder,  the  stockholder  must have given timely notice  thereof in proper
written form to the secretary of the corporation.  To be timely, a stockholder's
notice must be delivered to or mailed and  received at the  principal  executive
offices of the  corporation  (x) in the case of an annual meeting that is called
for a date that is within thirty (30) days before or after the anniversary  date
of the  immediately  preceding  annual  meeting of  stockholders,  not less than
ninety  (90) days nor more  than  one-hundred  twenty  (120)  days  prior to the
meeting, and (y) in the case of an annual meeting that is called for a date that
is not  within  thirty  (30) days  before or after the  anniversary  date of the
immediately  preceding  annual meeting,  not later than the close of business on
the tenth day  following  the day on which notice of the date of the meeting was
communicated to stockholders or public disclosure of the date of the meeting was
made, whichever occurs first. In no event shall the public


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announcement  of an adjournment  or  postponement  of a meeting of  stockholders
commence  a new time  period (or  extend  any time  period)  for the giving of a
stockholder notice as described herein. Only such business shall be conducted at
a  special  meeting  of  stockholders  as  shall  have  been  described  in  the
corporation's notice of meeting given pursuant to these by-laws.

                           (b)  To be in proper written form, such stockholder's
notice to the  secretary  shall set forth in writing  (x) as to each  matter the
stockholder  proposes to bring before the annual meeting (i) a brief description
of the business  desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meting, (ii) the text of the proposal
or business  (including the text of any resolutions  proposed for  consideration
and in the event that such business  includes a proposal to amend the by-laws of
the  corporation,  the language of the proposed  amendment),  (iii) any material
interest of the stockholder and beneficial owner in such business,  and (iv) any
other  information  relating to such  stockholder,  beneficial owner or business
that is required to be disclosed in a proxy statement or other filings  required
to be made in connection with  solicitations of proxies relating to the proposed
item of business  pursuant to Section 14 of the Securities  Exchange Act of 1934
(the "Exchange Act") and the rules and regulations promulgated  thereunder;  and
(y) as to such  stockholder  giving notice and the beneficial  owner, if any, on
whose behalf the  proposal is made (i) the name and  address,  as they appear on
the corporation's  books, of such stockholder and of such beneficial owner, (ii)
the class or series and number of shares of the capital stock of the corporation
that  are  owned  beneficially  and of  record  by  such  stockholder  and  such
beneficial  owner,  (iii) a description of all  arrangements  or  understandings
between such stockholder and/or beneficial owner and any other person or persons
(including  their names)  pursuant to which the proposals are to be made by such
stockholder,  (iv) a  representation  that such  stockholder or beneficial owner
intends to appear in person or by proxy at the  meeting to propose  the items of
business set forth in its notice,  (v) a representation  whether the stockholder
or the beneficial owner, if any, intends to (1) deliver a proxy statement and/or
form of proxy  to  holders  of at  least  the  percentage  of the  corporation's
outstanding  capital stock required to approve or adopt the proposal  and/or (2)
otherwise  solicit proxies from  stockholders  in support of such proposal,  and
(vi) any other information relating to such stockholder or beneficial owner that
would be required to be disclosed in a proxy statement or other filings required
to be made in  connection  with  solicitations  of  proxies  in  support of such
proposal  pursuant  to  Section  14 of the  Exchange  Act,  and  any  rules  and
regulations promulgated thereunder.

                           (c)    Notwithstanding anything in the by-laws to the
contrary,  no  business  shall be  conducted  at an  annual  meeting  except  in
accordance  with the procedures  set forth in these by-laws.  The chairman of an
annual meeting has the power and authority to, and shall,  if the facts warrant,
determine  and declare to the meeting that  business  was not  properly  brought
before the meeting and in accordance


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with the  provisions  of  section  4.9 of these  by-laws,  and if he  should  so
determine, he shall so declare to the meeting and any such business not properly
brought  before  the  meeting  shall  not  be  transacted.  Notwithstanding  the
foregoing  provisions  of this section 4.9, if the  stockholder  (or a qualified
representative  of the  stockholder)  does not  appear at the  annual or special
meeting of  stockholders  of the  corporation to present the proposed  business,
such proposed business shall not be transacted,  notwithstanding that proxies in
respect of such vote may have been received by the corporation.

                           (d)  Notwithstanding the foregoing provisions of this
section 4.9, a stockholder shall also comply with all applicable requirements of
the  Exchange  Act and the rules and  regulations  promulgated  thereunder  with
respect to the matters set forth in this section 4.9.

                  4.10     Director Nominations.
                           --------------------
                           (a)  Only  persons  who  are  nominated in accordance
with the procedures  set forth in this paragraph  shall be eligible for election
as directors of the  corporation.  Nominations for the election of directors may
be made at a meeting of  stockholders  pursuant to the  corporation's  notice of
meeting (or any  supplement  thereto) (i) by the board of  directors  (or a duly
authorized  committee thereof),  (ii) by any stockholder entitled to vote in the
election of directors  generally who complies with the  procedures  set forth in
this paragraph, or (iii) by the secretary of the corporation pursuant to section
5.3 of these  by-laws.  Elections of  directors  shall be conducted at a special
meeting of stockholders only as described in the corporation's notice of meeting
given pursuant to these by-laws.

                           (b)     All nominations by stockholders shall be made
pursuant  to timely  notice  in  proper  written  form to the  secretary  of the
corporation.  To be timely,  a  stockholder's  notice shall be given,  either by
personal delivery or by United States mail, postage prepaid, to the secretary of
the corporation at the principal  executive offices of the corporation not later
than  (x)  with  respect  to an  election  to be held at an  annual  meeting  of
stockholders  which is called for a date that is within  thirty (30) days before
or after the  anniversary  date of the immediately  preceding  annual meeting of
stockholders,  not less than ninety  (90) days nor more than one hundred  twenty
(120) days prior to such  anniversary  date, and (y) with respect to an election
to be held at an annual meeting of stockholders  which is called for a date that
is not  within  thirty  (30) days  before or after the  anniversary  date of the
immediately  preceding annual meeting of stockholders or to be held at a special
meeting of stockholders for the election of directors,  not later than the close
of business on the tenth day  following  the date on which notice of the date of
such meeting is first mailed to stockholders or public disclosure of the date of
the  meeting  was made,  whichever  occurs  first.  In no event shall the public
announcement of an adjournment or postponement of a meeting


                                       10

<PAGE>



of  stockholders  commence a new time period (or extend any time period) for the
giving of a stockholder notice as described herein.

                           (c)   Notwithstanding anything in the second sentence
of section 4.10(b) to the contrary, in the event that the number of directors to
be  elected  to the  board of  directors  of the  corporation  at a  meeting  is
increased and there is no public  announcement by the corporation  naming all of
the nominees  for  director or  specifying  the size of the  increased  board of
directors at least one hundred (100) days prior to the  anniversary  date of the
immediately  preceding annual meeting,  a stockholder's  notice required by this
section 4.10 shall also be considered  timely, but only with respect to nominees
for any new positions created by such increase,  if it shall be delivered to the
secretary at the principal  executive  offices of the corporation not later than
the close of  business on the tenth day  following  the day on which such public
announcement is first made by the corporation.

                           (d)  To be in proper written form, such stockholder's
notice shall set forth, (x) as to each person whom such stockholder  proposes to
nominate for election or re-election as a director,  (i) the name, age, business
address and residence address of the person,  (ii) the principal  occupation and
employment of the person,  (iii) the written consent of each proposed nominee to
being named as a nominee  and to serve as a director if elected,  (iv) the class
or series  and number of shares of capital  stock of the  corporation  which are
owned  beneficially or of record by the person and (v) all information  relating
to such person that is required to be  disclosed  in a proxy  statement or other
filings  required to be made in  connection  with  solicitations  of proxies for
election  of  directors,  or is  otherwise  required,  in each case  pursuant to
Section  14 of the  Exchange  Act,  and the  rules and  regulations  promulgated
thereunder;  and (y) as to such  stockholder  giving  notice and the  beneficial
owner,  if any,  (i) the name and address,  as they appear on the  corporation's
books, of the stockholder, and the beneficial owner, if any, who intends to make
the nomination  and of the person or persons to be nominated,  (ii) the class or
series and  number of shares of the  capital  stock  owned  beneficially  and of
record by such stockholder and by such beneficial owner,  (iii) a representation
that the stockholder is a holder of record of stock of the corporation  entitled
to vote at such meeting and that the  stockholder  or the beneficial  owner,  if
any,  intends  to appear in person or by proxy at the  meeting to  nominate  the
person  or  persons  specified  in  the  notice,   (iv)  a  description  of  all
arrangements or understandings  between the stockholder  and/or beneficial owner
and each nominee and any other person or persons (naming such person or persons)
pursuant  to  which  the  nomination  or  nominations  are  to be  made  by  the
stockholder,  (v) such other information regarding each nominee proposed by such
stockholder  as would be  required to be  included  in a proxy  statement  filed
pursuant to the proxy rules of the  Securities and Exchange  Commission,  (vi) a
representation  whether the stockholder or the beneficial owner, if any, intends
or is part of a group which intends to (1) deliver a proxy statement and/or form
of proxy to holders of at least the


                                       11

<PAGE>



percentage of the corporation's  outstanding capital stock required to elect the
nominee and/or (2) otherwise  solicit  proxies from  stockholders  in support of
such nomination, and (vii) any other information relating to such stockholder or
beneficial  owner that would be required to be disclosed in a proxy statement or
other filings  required to be made in connection with  solicitations  of proxies
for  election of directors  pursuant to Section 14 of the Exchange  Act, and the
rules and  regulations  promulgated  thereunder.  At the request of the board of
directors,  any person  nominated  by the board of  directors  for election as a
director  shall furnish to the  secretary of the  corporation  that  information
required to be set forth in a stockholder's  notice of nomination which pertains
to the nominee.

                           (e)    No  person shall be eligible for election as a
director  unless  nominated in accordance  with the  procedures set forth in the
by-laws  of the  corporation.  The  chair of the  meeting  has the power and the
authority  to and shall,  if the facts  warrant,  determine  and  declare to the
meeting  that a  nomination  of a  person  was not made in  compliance  with the
foregoing  procedure,  and if he or she  shall  so  determine,  he or she  shall
declare  to the  meeting  and the  defective  nomination  shall be  disregarded.
Notwithstanding   the  foregoing   provisions  of  this  section  4.10,  if  the
stockholder (or a qualified  representative  of the stockholder) does not appear
at the annual or special meeting of stockholders of the corporation to present a
nomination,  such nomination shall be disregarded,  notwithstanding that proxies
in respect of such vote may have been received by the corporation.

                           (f)   For   purposes   of   these  by-laws,   "public
announcement"  shall mean  disclosure in a press release  reported by a national
news  service  or in a  document  publicly  filed  by the  corporation  with the
Securities and Exchange Commission pursuant to the Exchange Act.

                           (g)   Notwithstanding  the  foregoing  paragraphs  of
this  section  4.10,  a  stockholder  shall  also  comply  with  all  applicable
requirements  of the  Exchange  Act, and the rules and  regulations  promulgated
thereunder with respect to the matters set forth in this section 4.10.

                  4.11     Procedures for Action By Written Consent.
                           ----------------------------------------

                           (a)  (i) The record date for determining stockholders
entitled to express  consent to  corporate  action in writing  without a meeting
shall be as fixed by the board of directors or as  otherwise  established  under
this section 4.11(a).  Any person seeking to have the stockholders  authorize or
take corporate  action by written  consent  without a meeting shall,  by written
notice addressed to the secretary and delivered to the corporation and signed by
a stockholder  of record,  request that a record date be fixed for such purpose.
The  written  notice  shall  contain at a minimum the  information  set forth in
section 4.11(a)(ii) below. The board of directors shall have


                                       12

<PAGE>



ten (10) days  following  the date of  receipt of the  notice to  determine  the
validity of the  request.  Following  the  determination  of the validity of the
request,  and (subject to section 4.11(a)(ii)) no later than ten (10) days after
the date on which such  request is  received  by the  corporation,  the board of
directors may fix a record date for such purpose.

                                  (ii) Any stockholder's notice required by this
section 4.11(a) shall describe each action that the stockholder proposes to take
by consent.  For each such proposal of business or nomination  for election as a
director,  the notice  shall  comply with the notice  requirements  set forth in
sections 4.9 and 4.10, as they are applicable.

                           (b)   Every  written  consent  purporting  to take or
authorize the taking of corporate action and/or related  revocations  (each such
written consent and related  revocation is referred to in this section 4.11 as a
"Consent")  shall bear the date of signature of each  stockholder  who signs the
Consent, and no Consent shall be effective to take the corporate action referred
to  therein  unless,  within  sixty  (60)  days of the  earliest  dated  Consent
delivered in the manner  required by this  section  4.11,  Consents  signed by a
sufficient  number of  stockholders  to take such action are so delivered to the
corporation.

                           (c)   A Consent shall be delivered to the corporation
by  delivery  to its  registered  office  in the  State  of  Delaware  or to the
secretary at the principal executive offices of the corporation. Delivery to the
corporation's  registered  office  shall  be made by  hand  or by  certified  or
registered mail, return receipt requested.

                           In the  event of the delivery to the corporation of a
Consent,  the secretary  shall provide for the  safekeeping  of such Consent and
shall  promptly  conduct  such  ministerial  review  of the  sufficiency  of the
Consents and of the validity of the action to be taken by stockholder consent as
the secretary  deems necessary or appropriate,  including,  without  limitation,
whether the holders of a number of shares having the  requisite  voting power to
authorize  or take the action  specified  in the  Consent  have  given  consent;
provided,  however, that if the corporate action to which the Consent relates is
the removal or replacement of one or more members of the board of directors, the
secretary shall promptly designate,  in accordance with the terms of section 4.8
hereof,  two  persons,  who  shall  not be  members  of the  Board,  to serve as
Inspectors with respect to such Consent and such Inspectors  shall discharge the
functions  of  the  Secretary  under  this  section   4.11(c).   If  after  such
investigation  the  secretary  or the  Inspectors  (as the  case  may be)  shall
determine  that the Consent is valid and that the action  therein  specified has
been validly  authorized,  that fact shall forthwith be certified on the records
of the Corporation kept for the purpose of recording the proceedings of meetings
of stockholders,  and the Consent shall be filed in such records,  at which time
the Consent shall become effective as stockholder


                                       13

<PAGE>



action.  In conducting the investigation  required by this section 4.11(c),  the
secretary  or the  Inspectors  (as the case may be) may,  at the  expense of the
corporation, retain special legal counsel and any other necessary or appropriate
professional  advisors,  and such other  personnel as they may deem necessary or
appropriate  to assist  them,  and shall be fully  protected  in relying in good
faith upon the opinion of such counsel or advisors.

                           No action by  written consent without a meeting shall
be effective until such date as the secretary or the Inspectors (as the case may
be) certify to the corporation that the Consents delivered to the Corporation in
accordance with section  4.11(c)  represent at least the minimum number of votes
that would be necessary to take the action.

                           Nothing  contained  in this section 4.11 shall in any
way be  construed  to  suggest  or imply  that the  board  of  directors  or any
stockholder  shall not be  entitled  to contest  the  validity of any Consent or
revocation thereof,  whether before or after such certification by the secretary
or the Inspectors,  or to take any other action (including,  without limitation,
the  commencement,  prosecution,  or  defense  of any  litigation  with  respect
thereto, and the seeking of injunctive relief in such litigation).

                                    DIRECTORS

                  5.1   Number and Qualification. The board of  directors  shall
                        ------------------------
consist of not less than twelve (12) nor more than  seventeen  (17)  people,  as
fixed from time to time by the board of  directors.  At least twelve (12) of the
directors  shall be members of the  corporation,  except  that  members  who are
employees of the corporation or dealers of the corporation's farm supplies shall
not be eligible for election as member directors.  Up to two (2) directors shall
be other  directors  who are not  required  to be  members  of the  corporation.
Without regard to the foregoing limitations,  the corporation shall nominate the
chief  executive  officer  for  election  at any meeting at which such person is
subject to  election  as a director.  The term of any  director  who is also the
chief  executive  officer  of  the  corporation  shall  expire  immediately  and
automatically  upon the  termination  for any  reason  or for no  reason of such
person as the chief executive  officer of the  corporation.  All directors shall
represent the interests of all common stockholders.

                  5.2    Nomination  Regions.  The  territory   in   which   the
                         -------------------
corporation  primarily operates shall be divided into nomination regions,  three
(3) in number, described as follows:

                  Region A    Commonwealth   of   Massachusetts;     States   of
                              Connecticut;  Maine;   New   Hampshire; New Jersey
                              (northern half); State


                                       14

<PAGE>



                              of    New York,  counties  of   Albany,  Dutchess,
                              Clinton,   Columbia,   Essex,   Franklin,  Fulton,
                              Greene,   Hamilton,   Herkimer    (northern half),
                              Jefferson, Lewis,   Montgomery,   Orange,  Putnam,
                              Rensselaer,   Rockland,   Saratoga,   Schenectady,
                              Schoharie, St. Lawrence, Sullivan, Ulster, Warren,
                              Washington,  Westchester;   New York City and Long
                              Island counties;  States  of  Rhode  Island;  and,
                              Vermont.

                  Region B    State of New York,  counties of Allegany,  Broome,
                              Cattaraugus,   Cayuga,   Chautauqua,      Chemung,
                              Chenango,   Cortland,   Delaware,  Erie,  Genesee,
                              Herkimer    (southern    half),
                              Livingston,  Madison,  Monroe,   Niagara,  Oneida,
                              Onondaga,  Ontario,  Orleans,   Oswego,    Otsego,
                              Schuyler, Seneca, Steuben, Tioga, Tompkins, Wayne,
                              Wyoming and Yates.

                  Region C.   Commonwealth  of Pennsylvania; States of Delaware;
                              Maryland;  New  Jersey (southern half); Ohio; and,
                              northern West Virginia.

                  5.3      Nomination Procedures.
                           ---------------------

                        (a)   The  Membership  and  Nominating  Committee of the
board of directors, appointed under section 7.3 of these by-laws, shall have the
responsibility for identifying persons to be nominated by the board of directors
for election at any meeting of the stockholders.

                        (b)   For each year,  there  shall  be  appointed by the
chairman of the board,or by the chairman's designee, three (3) Region Nominating
Task Forces to identify and recommend at least one  potential  member  candidate
who resides in the region for each  member director  position  to be  filled  in
that  region.  Each Region Nominating Task Force shall consist of a chairman who
shall be a member director and one  member  director  from the  region,  neither
of whom  is  standing  for re-election  during such year,  and at least four (4)
members  from  the  director  nominating  forum  of  the  region.   The   Region
Nominating   Task  Force  may  supply initial  recommendations  to  and  solicit
recommendations   from   the   director   nominating   forum regarding potential
candidates for election to the board of directors.

                        (c)   In  each  region  there  shall    be  a   director
nominating  forum comprised of members who reside in the region.  The members of
the director  nominating forums shall represent a majority of members' purchases
of farm  supplies  from the  corporation  during the  preceding  fiscal  year as
determined annually by the board of directors.



                                       15

<PAGE>



                        (d)   Each  Region  Nominating  Task Force shall request
recommendations  from each director  nominating  forum with respect to potential
member  candidates who reside in the region for each member director position to
be filled in that region for election to the board of directors.  Each member of
the director  nominating  forum shall have one vote in the  director  nomination
process.

                        (e)   Each Region  Nominating Task Force shall recommend
to the  Membership  and  Nominating  Committee  the member  who  resides in that
region, who need not be the person recommended by the director nominating forum,
it deems best  qualified to serve as member  director  from such region for each
member director position to be filled in that region.

                        (f)   The   Membership  and  Nominating  Committee shall
recommend to the board of directors the member candidates  and other  candidates
for  each  director  position  to be filled,  who need not be any of the persons
recommended by  the Region  Nominating Task Force, it deems best qualified to be
nominated by the board of directors for election at any meeting of stockholders.

                        (g)   The   board   of   directors   shall   select  the
candidates, who need not be any of the persons recommended by the Membership and
Nominating  Committee,  to be nominated on behalf of the board for each election
of directors.

                  5.4    Vacancies.
                         ---------

                        (a)    Any vacancy on the board of directors of a member
director  occurring  during  the  term of such  member  director,  caused  by an
increase in the authorized number of directors,  death, resignation or otherwise
may be filled for the unexpired  portion of the term or until a successor  shall
be elected,  by a vote of a majority of the  directors  then in office,  even if
less than a quorum,  at any regular or special meeting of the board. If the term
of a member director being replaced extends beyond the next annual meeting,  the
newly elected  director shall stand for election by the stockholders at the next
annual  meeting  for the balance of the term.  Any vacancy  shall be filled by a
person from the same region as the member director being replaced.

                        (b)   Any vacancy on the board of directors of any other
director occurring during the term of such other director, caused by an increase
in the authorized  number of directors,  death,  resignation or otherwise may be
filled  for the  unexpired  portion  of the term or until a  successor  shall be
elected by a vote of a majority of the  directors  then in office,  even if less
than a quorum,  at any regular or special  meeting of the board.  If the term of
any other director being replaced  extends beyond the next annual  meeting,  the
newly elected  director shall stand for election by the stockholders at the next
annual meeting for the balance of the term.



                                       16

<PAGE>



                        (c)    In  case  the entire board of directors shall die
or  resign,  the  president  or  secretary  of  the Corporation, or any ten (10)
stockholders may call and cause notice to be given for a special  meeting in the
same  manner  that  the chairman may call such a meeting,  and directors for the
unexpired  terms may be elected at such special meeting.

                  5.5   Regular  Meetings. Regular  meetings  of  the  board  of
                        -----------------
directors  may be held at such time,  date and place as may be  appointed by the
board,  which time may be changed  from time to time.  At least  annually,  at a
regular meeting of the board of directors,  the election of officers,  including
the  chairman  of the  board,  the  vice-chairman  and the  president  and chief
executive officer shall be conducted.

                  5.6   Special  Meetings.  A special  meeting  of the  board of
                        -----------------
directors shall be held whenever and at such location called by the chairman, or
by the vice-chairman of the board in the absence of the chairman, or by any five
(5) directors.  The purpose or purposes of any special meeting will be specified
in the notice  relating  thereto.  Any and all business may be  transacted  at a
special meeting.

                  5.7   Notice of Meetings of  Directors. Three (3) day's notice
                        --------------------------------
of regular  meetings  of the  directors  need be given  except that in case of a
change in the time for regular  meetings  written notice of such change shall be
given to  directors  who were not  present at the  meeting  when such change was
made.  Notice of each special meeting shall be given pursuant to section 12.3 of
these by-laws, showing the time and place, at least twenty-four (24) hours prior
to the time of such meeting.

                  5.8   Conference Telephone  Meetings.  Members of the board of
                        ------------------------------
directors,  or any committee thereof,  may participate in a meeting of the board
of directors or such committee by means of conference telephone or other similar
communications  equipment  by means of which all  persons  participating  in the
meeting  can  hear  each  other  and  communicate  with  each  other,  and  such
participation in a meeting shall constitute presence in person at such meeting.

                  5.9   Adjournment.   Notice  of  the  time, date  and place of
                        -----------
holding an adjourned meeting shall be given to all directors.

                  5.10  Quorum.  Except as herein  provided,  a majority  of the
                        ------
directors  in  office  shall  be  necessary  to  constitute  a  quorum  for  the
transaction  of  business.  In the event of an extreme  emergency,  including  a
substantial  disruption  of  communication  as a result of a  disaster,  whether
nuclear,  labor strike, flood, hurricane or any other cause, making it extremely
difficult  or  impossible  to assemble a majority of the board for a duly called
meeting, and such emergency has been declared,  either by the president,  or, in
his or her absence, the chairman of the board, or by the President of the United
States, or by any of the Governors of the states in which the corporation


                                       17

<PAGE>



does  business,  a quorum  of the  board of  directors  for the  transaction  of
business  at a meeting  duly  called  shall not be less  than  one-third  of the
directors.

                  5.11   Compensation  of  Directors.  Directors, as such, shall
                         ---------------------------
not receive  any stated  compensation  for their services unless its payment has
been  first  authorized  by  the  board  of directors.  In addition to an annual
retainer, the board of directors may allow a reasonable  per diem  and  expenses
for  attendance   at  any  meeting  of  the  board  or  of  the   Executive  and
Compensation Committee, and any other meeting or official business.

                  5.12   Removal  for  Cause.   A  director  may  be removed for
                         -------------------
failure  to  attend three (3) consecutive meetings of the board without adequate
cause, or  for  other neglect of duty, or for any other cause.  Such removal may
be effected in either of the following two ways:

                         (a)    Removal  may  be  by  the vote or consent of the
holders  of a  majority  of the  shares  entitled  to  vote  at an  election  of
directors; or

                         (b)    Removal may be by the affirmative vote of three-
fourths (3/4) of  the entire board  (excluding  the director  complained  of) at
any regular  or special  meeting  of  the  board,  following  reasonable  notice
to  the  director  complained  of  and  a  hearing  by  the  board of directors;
provided,  however,  that  in  the  event of  any  such  removal,  the  board of
directors,  if  requested  in writing by the director  subject to removal within
ten (10) days of the removal decision  by the  board  of directors,  shall  call
a  special  meeting  of the stockholders  to confirm or overrule the decision of
the board of  directors.  If the earliest  practicable  date to hold the special
meeting of the  stockholders  falls  within  ninety (90) days of the date of the
annual meeting as provided in section 4.1 of these by-laws,  the matter shall be
presented to the stockholders  for a vote at the annual meeting.  At the meeting
of  stockholders  at which  the  question  of the  removal  of the  director  is
presented for a vote, the director  complained of shall be provided a reasonable
opportunity  to  present  his or her  position.  The  vote of the  holders  of a
majority of the shares,  present and voting,  entitled to vote at an election of
directors  shall  confirm or overrule  the  decision of the board of  directors.
Until  such  time  as  the  stockholders  act  on the  removal  of the  director
complained of, if the  stockholders  are required to do so, neither the board of
directors nor the  stockholders  shall fill the vacancy caused by the removal of
the director.

                         A vacancy resulting from a vote of the stockholders may
be filled by the  stockholders  at the meeting  voting the removal and if not so
filled  shall be filled by the board of  directors as provided in section 5.4 of
these by-laws.



                                       18

<PAGE>



                               POWERS OF DIRECTORS

                  6.1   General  Powers.  Subject  to  the  limitations  of  the
                        ---------------
certificate of incorporation, of the by-laws and of the statutes of the State of
Delaware   relating  to  action  which  shall  be   authorized  or  approved  by
stockholders,  all corporate powers shall be exercised by or under the authority
of, and the business and affairs of the corporation  shall be controlled by, the
board of directors. Without prejudice to such general powers, but subject to the
same  limitations,  it is expressly  declared that the board of directors  shall
have the following powers to wit:

                        (a)    To  control  the  affairs  and  business  of  the
corporation and to establish and enforce rules and regulations not  inconsistent
with the laws of the State of Delaware,  the  certificate  of  incorporation  or
by-laws,  for the guidance of its officers and the management and conduct of its
affairs and business.

                        (b)    To  borrow  money  and  incur  indebtedness   for
corporate purposes,  and to cause to be executed and delivered therefor,  in the
corporate name, promissory notes, bonds, debentures,  deeds of trust, mortgages,
pledges,  hypothecations  and  other  evidences  of  indebtedness and securities
therefor,  and to do every act and thing necessary to effectuate the same.

                             COMMITTEES OF THE BOARD

                  7.1    Executive  Committee.  An Executive  Committee  may  be
                         --------------------
established by resolution  adopted by a majority of the whole board,  to consist
of such  number of  directors  as may be  specified,  which  shall  have and may
exercise,  in the intervals  between  meetings of the board,  all the powers and
authority  of the  board  of  directors,  and  may  authorize  the  seal  of the
corporation to be affixed to all papers which may require it.

                  7.2    Audit Committee.  An Audit Committee may be established
                         ---------------
by resolution adopted by a majority of the whole  board,  to consist of at least
three  (3)  financially  literate  member  or  other  directors  one of whom has
financial expertise, to assure members, investors, and others that the system of
internal   controls   established  by  management   effectively   safeguard  the
corporation's  assets,  real and intangible;  that the  corporation's  financial
reporting meets generally accepted standards and the directors' expectations for
quality and  integrity.  The chief  executive  officer shall not be eligible for
appointment to the Audit Committee. The board of directors shall adopt a charter
for the Audit  Committee,  and the Audit  Committee  shall  review this  charter
annually to assess the charter's adequacy.  This charter shall specify the scope
of the Audit Committee's responsibilities,  including the selection,  evaluation
and replacement of auditors and overseeing auditor independence.



                                       19

<PAGE>



                  7.3    Human  Resources   Management  Committee.   A   Human
                         -----------------------------------------
Resources Management Committee may  be  established  by  resolution  adopted  by
a  majority of the whole board, to consist of such  number of  directors  as may
be  specified,  to review  and  make  recommendations  on  compensation  issues.
The chief executive officer shall not be eligible for appointment to  the  Human
Resources Management Committee.

                  7.4    Membership and Nominating  Committee.  A Membership and
                         ------------------------------------
Nominating  Committee may be established by resolution  adopted by a majority of
the whole board, to consist of such number of directors as may be specified,  to
review and make recommendations on membership issues and to conduct the director
nomination procedures as set forth in section 5.3 of these by-laws.

                  7.5    Other  Committees of the Board.  Other  committees  may
                         ------------------------------
be  established,  from time to time, by resolution  adopted by a majority of the
whole board  specifying  the number of members  and  prescribing  the  committee
functions  and  duties.  In the  absence  or  disqualification  of a member of a
committee,  the member or members  present at any meeting  and not  disqualified
from voting,  whether or not the member or members present  constitute a quorum,
may  unanimously  appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member.

                             OFFICERS AND MANAGEMENT

                  8.1    Corporate  Officers.  The  officers  of the corporation
                         -------------------
shall be  elected  by the  board of  directors  and  shall  be three  (3)  board
officers,  a chairman  of the board,  a  vice-chairman,  a  president  and chief
executive  officer;   and,   executive  officers   consisting  of  one  or  more
vice-presidents,  a secretary, a controller,  a treasurer and a general counsel.
The  board  may also  appoint  any  other  employee  officers  whom the board of
directors may see fit in its discretion to designate.  The chairman of the board
and the  vice-chairman  shall be  elected  by the  member  directors  from their
number. The president and chief executive officer shall recommend  executive and
employee officers to the board of directors.

                  8.2    Election  and Term of Office. On the  recommendation of
                         ----------------------------
the president and chief executive officer, executive and employee officers shall
be elected annually at the first meeting of the board of directors following the
annual meeting of stockholders,  or at such other time as the board of directors
shall determine. Unless sooner removed by the board of directors, or unless they
resign or become  disqualified,  all  officers  shall hold  office  until  their
successors  are chosen  and have  qualified.  Any  officer,  whether  elected or
appointed  by the board of  directors,  may be removed at any time by a majority
vote of all of the directors.



                                       20

<PAGE>



                  8.3   Powers  and  Duties. Subject at all times to the control
                        -------------------
and  direction of the board of  directors,  the  president  and chief  executive
officer shall  conduct the business of the  corporation  in accordance  with its
purposes, and shall have administrative authority over all personnel,  including
executive employee officers, in the employ of the corporation; and each employee
officer shall have and exercise the powers and duties usual to his or her office
or delegated to him or her by the board of directors.

                  8.4   Compensation  of  Officers.  Officers shall each receive
                        --------------------------
such  compensation  as may be fixed by the  directors.  The  president and chief
executive  officer shall recommend  compensation  for executive  officers to the
board of directors.

                  8.5   Vacancies.   A  vacancy  occurring  in any office may be
                        ---------
filled by a majority of the  directors  then in office at any regular or special
meeting of the board.

                  8.6   Checks, Bills and Notes.  All checks,  drafts,  bills of
                        -----------------------
exchange,   notes,  orders  for  the  payment  of  money  and  other  negotiable
instruments of the corporation shall be made in the name of the corporation, and
shall be signed by any one of the following:  the president, any vice president,
the secretary,  treasurer,  controller,  or any assistant  secretary,  assistant
treasurer or assistant  controller.  The board of directors may also delegate to
other officers or agents the power to sign or countersign such  instruments.  No
officers or agents of the  corporation  singly or jointly with others shall have
the power to make any bill payable, note or check or other negotiable instrument
or endorse the same in the name of the  corporation,  or contract or cause to be
contracted  any debt or liability  in the name or on behalf of the  corporation,
except  as  provided  in  these  by-laws,  and as  authorized  by the  board  of
directors.  Bills of exchange,  checks,  notes and other negotiable  instruments
received by the corporation shall be endorsed for collection by such officers or
agents as may be designated by the board of directors for that purpose.

                              PATRONAGE ACCOUNTING

                  9.1   Scope  of Patronage  Refund  Provisions.  The provisions
                        ---------------------------------------
of  sections  9.2-9.5 of  these  by-laws  provide  for  patronage  refunds  only
with respect to that portion of the corporation's  business  consisting of sales
of  farm  supplies.  Patronage  refunds,  if  any,  with  respect  to  marketing
operations  will be paid only pursuant to marketing  contracts  with members and
contract patrons providing for the payment of such refunds.

                  9.2   Definitions.  As  used  in sections 9.2-9.5 of these by-
                        -----------
laws:

                        (a)    Member.  The term "member" includes any member of
                               ------
the  corporation  as  defined in section  1.2(c) of these  by-laws  and also any
person who has


                                       21

<PAGE>



entered into a patronage  refund  contract with the corporation as authorized by
section 9.5 of these by-laws.  The term "non-member" refers to any person who is
not a member as that term is defined in the preceding sentence.

                         (b)   Net  Margin.  The "net margin" of the corporation
                               -----------
shall be taxable  income from sales of farm  supplies  for the fiscal  year,  as
computed for federal  income tax purposes,  but without  taking into account any
deductions for patronage refunds.

                         (c)   Member  Margin.  "Member  margin"  shall  be that
                               --------------
portion  of the net  margin  derived  from sales of farm  supplies  to  members,
determined by multiplying  the net margin by the percentage of gross  purchasing
volume which is attributable to sales of farm supplies to members.

                         (d)   Volume  Subject  to  Refund.   "Volume subject to
                               ---------------------------
refund" is the gross volume of the  corporation  from sales of farm supplies for
any fiscal year, reduced by that portion of such volume attributable to business
with non-members,  and increased by the average  percentage mark-up necessary to
reflect an equivalent volume at the retail level.

                         (e)   Member's Pro Rata Share.  Each "member's pro rata
                               -----------------------
share" of any refund or reserve shall be computed by  multiplying  the amount or
volume subject to refund attributable to such member by a percentage  determined
by dividing the total refund or reserve to be allocated,  as the case may be, by
the total amount of volume subject to refund.

                         (f)   Patronage  Refund.  The  term  "patronage refund"
                               -----------------
shall  include a  patronage  refund or  rebate  or any  amount  paid to a patron
pursuant to section 9.5 of these  by-laws on the basis of business  done with or
for such a patron.

                   9.3   Reasonable  Reserves.  The  board  of directors may set
                         --------------------
aside  each fiscal year,  from the net margin of the  corporation,  such amounts
as the board of directors in its discretion deems necessary  for  the  efficient
prosecution of the corporation's  business,  provided  however,  that no amounts
shall be set aside which are not reasonable in amount,  giving due regard to the
purposes  thereof  (such  amounts  being  sometimes  hereinafter  referred to as
"reasonable reserves").  Any reserves set aside pursuant to section 9.3 of these
by-laws  shall be  allocated  first to all net  earnings,  as defined in (ii) of
section 9.4 of these by-laws,  of the corporation  other than member margin and,
to the extent that such  reserves  exceed such net earnings,  to member  margin.
Such reasonable reserves may be used for such proper corporate purposes as shall
be  determined  by the board of  directors,  including,  but not  limited to the
accumulation of working  capital,  contributions to sinking funds to meet future
indebtedness, payment of Federal income and excess profits taxes, acquisition of


                                       22

<PAGE>



funds for expansion or replacement, or accumulations of reserves to offset price
declines.  The corporation shall maintain records sufficient to afford permanent
means for  apportioning  to each member his or her pro rata share of all amounts
retained by the corporation as reasonable reserves for each fiscal year.

                  9.4   Dividends on Capital  Stock. The  board of directors may
                        ---------------------------
set aside each fiscal year from funds  available  therefor  such  amounts as the
board  deems  appropriate  for  payment  as dividends on issued and  outstanding
capital  stock.  Such  amounts  shall be  allocated  pro rata between (i) member
margin and (ii) all other net earnings of the  corporation  (including  both net
margin derived from purchasing business conducted with non-members, and earnings
not derived from purchasing).

                  9.5    Payment of Patronage Refunds.
                         ----------------------------

                        (a)  Obligation  to  Pay  Patronage Refunds.
                             ---------------------------------------
The corporation shall be  obligated,  as  soon as practicable after the close of
each  fiscal  year and in no event  later  than 8 1/2  months  after  the  close
thereof,  to pay each member in cash as a  patronage  refund his or her pro rata
share of all member margin remaining after deducting amounts,  if any, set aside
therefrom  by the board of  directors  (1) as  reasonable  reserves  pursuant to
section  9.3 of these  by-laws and (2) for  payment as  dividends  on issued and
outstanding  capital stock  pursuant to section 9.4 of these by- laws;  provided
that the amount of  patronage  refunds  thus  determined  shall be  increased or
decreased to the extent  necessary to enable the  obligation  for the payment of
such refunds to be expressed as a percentage of volume.

                        (b)  Minimum   Payment  of  Patronage  Refunds.
                             -----------------------------------------
Notwithstanding the provisions of paragraph (a) of section 9.5 of these by-laws,
the board of  directors  shall fix and/or  amend  from time to time the  minimum
amount  which shall be paid as a patronage  refund and any amount less than that
so fixed shall not be  distributed  to the member  entitled  thereto  (unless he
claims it in cash) but shall be retained by the  corporation  as through it were
part of a reasonable reserve set aside pursuant to section 9.3 of these by-laws.

                        (c)  Obligation to Pay Patronage Refunds Absolute.  The
                             --------------------------------------------
corporation  shall be absolutely  liable for the payment of patronage refunds as
provided  herein  without  further  action on the part of any  officer or of the
board of directors.

                        (d)  Place of Purchase.  Each  member  shall be entitled
                             -----------------
to his or her  respective  pro rata  share of any  patronage  refunds  paid with
respect to Agway distributed goods purchased from Agway and certain dealers. The
corporation may enter into such contracts,  undertakings and understandings with
certain  dealers as may be necessary  and proper to insure that each member will
receive his or her pro rata share of such refunds.


                                       23

<PAGE>



                  9.6    Contract Patrons. The  board of directors may authorize
                         ----------------
the appropriate  officers and/or employees of the corporation to contract to pay
and to pay  patronage  refunds to patrons  other than the  members as defined in
section 1.2(c) of these by-laws,  provided the amounts of such patronage refunds
are  determined  upon the same basis and under the same terms and  conditions as
those of such  members,  and provided  further that any such  contract  shall be
entered  into prior to the  accumulation  of any gross  receipts  subject to the
charge of such patronage refunds.

                                    MARKETING

                  10.1   Marketing  Contracts.  The  terms  and conditions under
                         --------------------
which  agricultural  products of members shall be marketed may be established by
marketing  contracts  to be  executed by the  corporation  and its members on an
individual  commodity  or  commodity  group  basis,  not  inconsistent  with the
provisions of these by-laws.

                                 INDEMNIFICATION

                  11.1   Right  to  Indemnification.    The  corporation   shall
                         --------------------------
indemnify and hold harmless,  as such separate and  independent  rights shall be
applicable to the fullest extent  possible under  applicable law as it presently
exists or may hereafter be amended,  any person (an  "Indemnitee") who was or is
made or is threatened to be made a party or is otherwise involved in any action,
suit or proceeding, whether civil, criminal,  administrative or investigative (a
"proceeding"),  by reason of the fact that he or she, or a person for whom he or
she is the legal  representative,  is or was a  director,  officer,  employee or
agent of the corporation or, while a director or officer of the corporation,  is
or was  serving  at the  request  of the  corporation  as a  director,  officer,
employee or agent of another corporation or of a partnership,  limited liability
company, joint venture, trust, enterprise or nonprofit entity, including service
with respect to employee benefit plans,  against all liability and loss suffered
and expenses (including attorneys' fees) reasonably incurred by such Indemnitee.
Notwithstanding the preceding sentence,  except as otherwise provided in section
11.3, the corporation shall be required to indemnify an Indemnitee in connection
with a proceeding  (or part thereof)  commenced by such  Indemnitee  only if the
commencement  of  such  proceeding  (or  part  thereof)  by the  Indemnitee  was
authorized by the board of directors of the corporation.

                  11.2   Prepayment of Expenses.  The corporation  shall pay the
                         ----------------------
expenses   (including   attorneys'  fees)  incurred  by  an  Indemnitee  of  the
corporation  in defending any  proceeding  in advance of its final  disposition,
provided, however, that, to the extent required by law, such payment of expenses
in advance of the final  disposition of the  proceeding  shall be made only upon
receipt of an undertaking by the Indemnitee to repay all amounts  advanced if it
should be ultimately determined that the Indemnitee


                                       24

<PAGE>



is not entitled to be indemnified  under sections  11.1-11.7 of these by-laws or
otherwise.  Except as otherwise  provided in Section 11.3, the corporation shall
be required to pay expenses in advance in connection  with a proceeding (or part
thereof)  commenced  by  such  Indemnitee  only  if  the  commencement  of  such
proceeding  (or part thereof) by the  Indemnitee  was authorized by the board of
directors of the corporation.

                  11.3    Claims. If a claim for  indemnification or advancement
                          ------
of expenses under sections 11.1-11.7 of these by-laws is not paid in full within
sixty days after a written claim therefor by the Indemnitee has been received by
the  corporation,  the  Indemnitee may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part,  shall be entitled to be paid
the  reasonable  expense  of  prosecuting  such  claim.  In any such  action the
corporation shall have the burden of proving that the Indemnitee is not entitled
to the requested  indemnification  or advancement  of expenses under  applicable
law.

                  11.4    Nonexclusivity of Rights.  The rights conferred on any
                          ------------------------
Indemnitee by sections  11.1-11.7 of these by-laws shall not be exclusive of any
other  rights which such  Indemnitee  may have or  hereafter  acquire  under any
statute,   provision  of  the  certificate  of  incorporation,   these  by-laws,
agreement, vote of stockholders or disinterested directors or otherwise.

                  11.5    Other Sources. The corporation's  obligation,  if any,
                          -------------
to indemnify or to advance  expenses to any  Indemnitee who was or is serving at
its request as a director,  officer,  employee or agent of another  corporation,
partnership,  limited liability  company,  joint venture,  trust,  enterprise or
nonprofit  entity shall be reduced by any amount such  Indemnitee may collect as
indemnification   or  advancement  of  expenses  from  such  other  corporation,
partnership,  limited liability  company,  joint venture,  trust,  enterprise or
non-profit enterprise.

                  11.6    Amendment  or Repeal.  Any repeal or  modification  of
                          --------------------
the  foregoing  provisions  of sections  11.1-11.5  of these  by-laws  shall not
adversely affect any right or protection  hereunder of any Indemnitee in respect
of  any  act or  omission  occurring  prior  to  the  time  of  such  repeal  or
modification.

                  11.7    Other  Indemnification  and  Prepayment  of  Expenses.
                          -----------------------------------------------------
Sections   11.1-11.6  of  these  by-laws  shall  not  limit  the  right  of  the
corporation,  to the extent and in the manner  permitted by law, to indemnify or
to advance  expenses to persons other than Indemnitees when and as authorized by
appropriate corporate action.

                                  MISCELLANEOUS



                                       25

<PAGE>



                  12.1    Principal  Office.    The  principal  office   of  the
                          -----------------
corporation  in the State of Delaware  shall be located at 1209 Orange Street in
the City of Wilmington, County of New Castle.

                  12.2    Other Offices.  The principal office outside the State
                          -------------
of  Delaware  shall be at DeWitt,  New York.  The  corporation  may also have an
office or offices at such other place or places,  within or without the State of
Delaware  as the  board of  directors  may  from  time to time  appoint,  or the
business of the corporation may require.

                  12.3    Method of Giving Notice.   Whenever  in  these by-laws
                          -----------------------
notice  is  required  to be  given,  it may be  given  by any one or more of the
following methods:
                           (a)      Delivered personally; or

                           (b)      Written notice either deposited  in the mail
postage  prepaid or sent by  telegraph,  addressed to the  residence or place of
business of the person to be notified as the same shall appear on the records of
the corporation; or

                           (c)      To members or stockholders by publication in
any corporation  bulletin or other periodical mailed to members or stockholders;
or

                           (d)      Any  other  means permitted under applicable
law,  including by means of electronic  transmission  pursuant to Section 232 of
the Delaware General Corporation Law.

                  12.4    Waiver of Notice.  The  transactions of any meeting of
                          ----------------
the board of directors or any committee  however  called and noticed or wherever
held, shall be as valid as though had at a meeting duly held, after regular call
and notice, if a quorum be present,  and if, either before or after the meeting,
each of the directors or committee members not present signs a written waiver of
notice,  a waiver of notice by electronic  transmission  or a consent to holding
such  meeting.  All such waivers or consents  shall be filed with the  corporate
records or made a part of the minutes of the meeting.

                  12.5    Effect of Holiday.   If the time designated herein for
                          -----------------
any meeting shall fall upon a legal holiday, then any such meeting shall be held
on the next day following which is not a holiday.

                  12.6    Fiscal Year.  The fiscal year of the corporation shall
                          -----------
extend from July 1 to June 30 following.



                                       26

<PAGE>



                  12.7     Seal.  The  seal of the corporation shall be circular
                           ----
in form and shall have inscribed  thereon the name of the corporation,  the year
of organization and the words: "Corporate Seal, Delaware."

                  12.8     Amendments.  These by-laws may be amended or repealed
                           ----------
or new by-laws adopted as follows:

                           (a)    At  any  meeting of stockholders, by a vote of
a majority of the stockholders  present and voting,  provided that the notice of
the meeting shall have set forth the substance of the proposed amendment, repeal
or new by-law provision upon which the vote is taken, or

                           (b)    By vote of a majority of the directors present
at a meeting at which a quorum is present unless otherwise  provided by law, the
certificate of incorporation or these by-laws.







                                       27

<PAGE>