UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10Q/A


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                                     OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the Quarterly Period Ended March 31, 1998
                           Commission File No. 1-11941


                           FARM FAMILY HOLDINGS, INC.
                    A Delaware Corporation IRS No. 14-1789227

                   344 Route 9W, Glenmont, New York 12077-2910
                  Registrant's telephone number: (518) 431-5000







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

The number of shares outstanding of the issuer's common stock as of May 13, 1998
is 5,253,813.


<PAGE>


                           FARM FAMILY HOLDINGS, INC.

                                      INDEX



   Part I.   Financial Information

            Item 1.  Financial Statements of Farm Family Holdings, Inc. 
                     (unaudited)
                     Consolidated Balance Sheets
                     March 31, 1998 and December 31, 1997

                     Consolidated Statements of Income and Comprehensive Income
                     Three months ended March 31, 1998 and 1997

                     Consolidated  Statements  of Cash Flow Three  months ended
                     March 31, 1998 and 1997

                     Notes to Consolidated Financial Statements

            Item 2.  Management's Discussion and Analysis of Financial Condition
                     and Results of Operations


  Part II.   Other Information

             Item 6.  Exhibits and Reports on Form 8-K





<PAGE>


<TABLE>


               FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
                    CONSOLIDATED  BALANCE  SHEETS
 (                        $ in thousands)
<CAPTION>
                                                                                  (Unaudited)
                                                                                March 31, 1998*    December 31, 1997*
-----------------------------------------------------------------------------------------------------------------------
Assets
Investments:
     Fixed Maturities
     Available for sale, at fair value
<S>                                                                                    <C>                    <C>
        (Amortized cost: $250,002 in 1998 and $248,984 in 1997 )                       $259,956               $259,199
     Held to maturity, at amortized cost
        (Fair value: $8,949 in 1998 and $9,194 in 1997)                                   8,602                  8,855
   Equity securities
     Available for sale, at fair value
            (Cost: $3,363 in 1998 and 1997)                                               4,730                  4,521
   Mortgage loans                                                                           745                  1,660
   Other invested assets                                                                    544                    553
   Short-term investments                                                                11,609                  5,643
-----------------------------------------------------------------------------------------------------------------------
             Total investments                                                          286,186                280,431
-----------------------------------------------------------------------------------------------------------------------
Cash                                                                                      5,327                  5,841
Insurance receivables:
   Reinsurance receivables                                                               15,630                 12,343
   Premiums receivable, net                                                              31,912                 28,141
Deferred acquisition costs                                                               13,401                 12,613
Accrued investment income                                                                 4,820                  5,408
Deferred income tax asset, net                                                            4,463                  4,422
Prepaid reinsurance premiums                                                                643                  2,044
Receivable from affiliates, net                                                          18,191                 17,786
Other assets                                                                              3,194                  2,202
-----------------------------------------------------------------------------------------------------------------------
             Total Assets                                                              $383,767               $371,231
-----------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------
LIABILITIES aND STOCKHOLDERS' EQUITY
Liabilities:
   Reserves for losses and loss adjustment expenses                                    $163,498               $156,622
   Unearned premium reserve                                                              69,119                 66,069
   Reinsurance premiums payable                                                           1,640                  2,564
   Accrued expenses and other liabilities                                                22,024                 21,474
   Debt                                                                                   1,264                  1,268
-----------------------------------------------------------------------------------------------------------------------
             Total liabilities                                                          257,545                247,997
-----------------------------------------------------------------------------------------------------------------------

Commitments and contingencies
Stockholders' equity:
    Preferred stock $.01 par value 1,000,000 shares authorized
         and no shares issued and outstanding                                                 -                      -

    Common stock $.01 par value 10,000,000 shares authorized
         and 5,253,813 shares issued and outstanding                                         53                     53
    Additional Paid in Capital                                                           92,906                 92,906
    Retained earnings                                                                    25,904                `22,883
    Accumulated other comprehensive income                                                7,359                  7,392
-----------------------------------------------------------------------------------------------------------------------
             Total stockholders' equity                                                 126,222                123,234
-----------------------------------------------------------------------------------------------------------------------
             Total Liabilities and Stockholders' Equity                                $383,767               $371,231
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
 See accompanying notes to Consolidated Financial Statements.
              

*Amounts have been  restated for certain  items as more fully  described in Note
2-Prior Period Adjustments.

</TABLE>

<PAGE>

<TABLE>

               FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
     CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
              ($ in thousands, except per share data)
<CAPTION>


                                                                                                    (Unaudited)
                                                                                               Three Months Ended
                                                                                                     March 31, 
                                                                                               1998*             1997*
------------------------------------------------------------------------------------------------------------------------


Revenues:
<S>                                                                                          <C>                <C>    
     Premiums                                                                                $42,815            $34,973
     Net investment income                                                                     4,767              4,416
     Realized investment gains  (losses), net                                                    126               (90)
     Other income                                                                                219                220
------------------------------------------------------------------------------------------------------------------------
                   Total revenues                                                             47,927             39,519
------------------------------------------------------------------------------------------------------------------------
Losses and Expenses:
     Losses and loss adjustment expenses                                                      32,139             24,697
     Underwriting expenses                                                                    11,474             10,490
     Interest expense                                                                             25                 26
     Dividends to policyholders                                                                   50                 38
------------------------------------------------------------------------------------------------------------------------
             Total losses and expenses                                                        43,688             35,251
------------------------------------------------------------------------------------------------------------------------
Income before federal income tax expense                                                       4,239              4,268
Federal income tax expense                                                                     1,217              1,474
------------------------------------------------------------------------------------------------------------------------
             Net income                                                                        3,022              2,794
------------------------------------------------------------------------------------------------------------------------

Other comprehensive income, net of tax:

Unrealized holding gain (loss) arising during the period
 (net of deferred tax of ($53) and $1,632, respectively)                                        100              (3,031)
Reclassification adjustment for gains (losses) included in net income
 (net of tax expense (benefit) of $72 and ($19), respectively)                                 (133)                36
------------------------------------------------------------------------------------------------------------------------

             Other comprehensive income (loss)                                                  (33)            (2,995)
------------------------------------------------------------------------------------------------------------------------

             Comprehensive income (loss)                                                      $2,989             $(201)
------------------------------------------------------------------------------------------------------------------------

Per Common Share:
       Basic earnings per common share                                                         $0.58             $ 0.53
------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
       Diluted earnings per common share                                                       $0.57             $ 0.53
------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------
       Basic weighted average shares outstanding                                           5,253,813          5,253,813
------------------------------------------------------------------------------------------------------------------------
       Diluted weighted average shares outstanding                                         5,301,498          5,253,813
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.  

*Amounts have been  restated for certain  items as more fully  described in Note
2-Prior Period Adjustments.

</TABLE>


<PAGE>

<TABLE>

               FARM FAMILY HOLDINGS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                         ($ in thousands)
                                                                                                      (Unaudited)
                                                                                                   For the Three Months      
                                                                                                      Ended March 31,               
-------------------------------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities:
Net income                                                                                         $3,022         $2,794
-------------------------------------------------------------------------------------------------------------------------

Adjustments to reconcile net income
      to net cash provided by operating activities:
<S>                                                                                                 <C>               <C>
    Realized investment (gains) losses                                                              (126)             90
    Amortization of bond discount                                                                     76              48
    Deferred income taxes                                                                            (24)           (298)
    Changes in:
         Reinsurance receivables                                                                  (3,287)            342
         Premiums receivable                                                                      (3,771)         (2,891)
         Deferred acquisition costs                                                                 (788)            (39)
         Accrued investment income                                                                    588            388
         Prepaid reinsurance premiums                                                               1,401           (447)
         Receivable from affiliates                                                                 (405)             54
         Other assets                                                                               (991)             57
         Reserves for losses and loss adjustment expenses                                           6,876          1,985
         Unearned premium reserve                                                                   3,050          2,198
         Reinsurance premiums payable                                                               (924)          1,418
         Accrued expenses and other liabilities                                                       550          2,100
-------------------------------------------------------------------------------------------------------------------------
            Total adjustments                                                                       2,225          5,005
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
            Net cash provided by operating activities                                               5,247          7,799
-------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTiNG ACTIVITIES Proceeds from sales:
    Fixed maturities available for sale                                                                 -          3,514
Investment collections:
    Fixed maturities available for sale                                                            14,553          3,303
    Fixed maturities held to maturity                                                                 239            207
    Mortgage loans                                                                                    915             20
Investment purchases:
    Fixed maturities available for sale                                                          (15,507)       (15,528)
    Fixed maturities held to maturity                                                                   -          (131)
    Equity securities                                                                                   -           (56)
Change in short-term investments, net                                                             (5,966)            784
Change in other invested assets                                                                         9          (125)
-------------------------------------------------------------------------------------------------------------------------
            Net cash used in investing activities                                                 (5,757)        (8,012)
-------------------------------------------------------------------------------------------------------------------------

Cash Flows From Financing Activities
Principal payments on debt                                                                            (4)           (11)
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
            Net cash used in financing activities                                                     (4)           (11)
-------------------------------------------------------------------------------------------------------------------------
            Net decrease in cash                                                                    (514)          (224)
Cash, beginning of period                                                                           5,841          4,110
-------------------------------------------------------------------------------------------------------------------------
Cash, end of period                                                                                $5,327         $3,886
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
See accompanying notes to Consolidated Financial Statements.

*Amounts have been  restated for certain  items as more fully  described in Note
2-Prior Period Adjustments.

</TABLE>

<PAGE>


Notes to Consolidated Financial Statements

     1.   Summary of Significant Accounting Policies

     The accompanying  consolidated financial statements include the accounts of
     Farm Family  Holdings,  Inc. ("Farm Family  Holdings") and its wholly owned
     subsidiaries  (collectively  referred  to as the  "Company").  The  primary
     subsidiary  of Farm  Family  Holdings  is Farm  Family  Casualty  Insurance
     Company ("Farm Family Casualty"). The operations of the Company are closely
     related with those of its  affiliates,  Farm Family Life Insurance  Company
     ("Farm  Family  Life"),  and Farm Family  Life's  wholly owned  subsidiary,
     United Farm Family Insurance Company ("United Farm Family").

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance  with the  instructions to Form 10-Q. In the opinion
     of management,  these statements  contain all adjustments  including normal
     recurring  accruals,  which are  necessary for a fair  presentation  of the
     consolidated  financial  position at March 31, 1998,  and the  consolidated
     results of  operations  for the three months ended March 31, 1998 and 1997.
     The results of the  Company's  operations  for any  interim  period are not
     necessarily  indicative  of the results of the Company's  operations  for a
     full fiscal year.  The year end balance sheet data was derived from audited
     financial  statements,  but does not  include all  disclosures  required by
     generally accepted accounting principles.

     Effective  January 1, 1998,  the Company  adopted  Statement  of  Financial
     Accounting  Standards No. 130  "Comprehensive  Income",  which  established
     standards for the reporting and disclosure of comprehensive  income and its
     components,  and restated prior period  financial  statements to conform to
     this reporting standard.

    2.  Prior Period Adjustments

     Previously,  the  Company  accounted  for  its  extended  earnings  program
     pursuant  to  Statement  of  Financial  Accounting  Standards  No.  5.  The
     restatement of certain amounts within the Company's  consolidated financial
     statements relates to the Company's  retroactive adoption effective January
     1, 1994 of Statement of Financial  Accounting Standards No. 112 "Employers'
     Accounting for  Postemployment  Benefits"  ("Statement 112") to account for
     the  Company's  extended  earnings  program  with  its  agents  and  agency
     managers.  Pursuant  to  agreements  between the Company and its agents and
     agency managers (collectively  referred to hereafter as "agents"),  subject
     to certain  conditions  including length of service,  confidentiality,  and
     non-competition,  certain agents are eligible to receive  monthly  extended
     earnings  payments  for a period  of up to eight  years  subsequent  to the
     termination  of their  association  with the  Company.  Historically,  such
     payments  have been funded by  deductions  from the  commissions  earned by
     successor  agents  who have  assumed  the  right to  service  the  books of
     business  previously  serviced by eligible former agents  subsequent to the
     termination of the former agent's association with the Company.



<PAGE>


     The Company has restated certain amounts within its consolidated  financial
     statements  as of March 31,  1998 and  December  31, 1997 and for the three
     months  ended March 31, 1998 and 1997.  The  following  table  presents the
     restated and previously reported amounts:              
<TABLE>
<CAPTION>

(Dollars in thousands, except per share data)
                                                               March 31, 1998          December 31, 1998
                                                              As           As            As          As
                                                           Reported     Restated      Reported    Restated
         Balance Sheet:
<S>                                                            <C>         <C>         <C>         <C>   
             Deferred income tax asset, net                    $1,435      $4,463      $1,469      $4,422
             Total assets                                     380,739     383,767     368,278     371,231
             Accrued expenses and other liabilities            12,116      22,024      11,828      21,474
             Total liabilities                                247,637     257,545     238,351     247,997
             Stockholders' equity                             133,102     126,222     129,927     123,234
             Total liabilities and stockholders' equity       380,739     383,767     368,278     371,231

                                                                  For the three months ended March 31
                                                                       1997                 1998            
                                                                       ----                 ----
                                                                 As           As        As         As
                                                              Reported     Restated  Reported    Restated
         Statements of Income:
             Underwriting expenses                             11,213      11,474     $10,090     $10,490
             Federal income tax expense                         1,292       1,217       1,612       1,474
             Net income                                         3,208       3,022       3,056       2,794
         Per share data:
             Net income-Basic                                   $0.61       $0.58       $0.58       $0.53
             Net income-Diluted                                 $0.61       $0.57       $0.58       $0.53
</TABLE>

     3.  Earnings Per Share

     The  following  table  presents  a  reconciliation  of the  numerators  and
     denominators of the basic and diluted earnings per share computations.
<TABLE>

<CAPTION>
                                                                                         Three Months Ended 
                                                                                              March 31,                             
<S>                                                                                       <C>         <C> 
                                                                                          1998        1997
         Net income available to common stockholders                                  $3,022,000  $2,794,000
                                                                                     ------------------------
         Weighted average number of  shares in basic earnings per share                5,253,813   5,253,813
         Effect of stock options                                                          47,685         ---
                                                                                     ------------------------
         Weighted average number of shares in diluted earnings per share               5,301,498   5,253,813
                                                                                     ------------------------
         Basic net income per share                                                        $0.58       $0.53
                                                                                     ------------------------
         Diluted net income per share                                                      $0.57       $0.53
                                                                                     ------------------------
</TABLE>



<PAGE>


     4.  Future Application of Accounting Standards

     In  February of 1998,  the  Financial  Accounting  Standards  Board  issued
     Statement  of  Financial   Accounting  Statement  (SFAS)  132,  "Employers'
     Disclosures about Pensions and Other  Postretirement  Benefits,"  effective
     for  years  beginning  after  December  15,  1997.  SFAS  132  revises  the
     disclosure  requirements but does not change the measurement or recognition
     of pensions and other post  retirement  benefits.  The adoption of SFAS 132
     will result in revised and additional  disclosures  but will have no effect
     on the  financial  position,  results of  operations,  or  liquidity of the
     Company.

     5.   Contingencies

     The Company is party to numerous legal actions arising in the normal course
     of business.  Management  believes  that  resolution of these legal actions
     will not have a  material  adverse  effect  on its  consolidated  financial
     condition.

     Catastrophes  are an inherent  risk in the property and casualty  insurance
     industry  and  could  produce  significant  adverse   fluctuations  in  the
     Company's  results of operations  and financial  condition.  The Company is
     subject to a concentration of risk within the  Northeastern  United States.
     For the three months ended March 31, 1998 and 1997,  approximately  62% and
     60%,  respectively,  of the Company's  direct  premiums were written in the
     states of New York and New Jersey.  As a result of the concentration of the
     Company's  business  in the  states  of New York and New  Jersey,  and more
     generally,  in the  Northeastern  United States,  the Company's  results of
     operations   may  be   significantly   affected   by  weather   conditions,
     catastrophic events and regulatory  developments in these two states and in
     the Northeastern United States,  despite the Company's  reinsurance program
     designed to mitigate the impact of these factors.

     As a condition of its license to do business in various states, the Company
     is  required  to  participate  in a variety of  mandatory  residual  market
     mechanisms  (including  mandatory  pools) which provide  certain  insurance
     (most notably  automobile  insurance) to consumers who are otherwise unable
     to obtain such coverages from private insurers. The amount of future losses
     or assessments  from residual  market  mechanisms can not be predicted with
     certainty and could have a material  adverse effect on the Company's future
     results of operations.

     Many of the  Company's  existing  computer  programs use only two digits to
     identify  a year in the  date  field.  These  programs  were  designed  and
     developed  without  considering  the impact of the  upcoming  change in the
     century. If not corrected,  many of these computer  applications could fail
     or create  erroneous  results by or at the Year  2000.  The Year 2000 issue
     affects virtually all companies and organizations . Therefore,  the Company
     must also  coordinate with other entities with which it interacts to ensure
     these entities are also addressing the Year 2000 issue. If not successfully
     addressed,  the Year 2000 issue could have material adverse consequences on
     the  Company.  The  Company  has an  on-going,  enterprise-wide  project to
     address  its Year  2000  issue.  During  1998,  the  Company  will  perform
     system-wide  testing to support  its plan of having  policy  administration
     systems  Year  2000  compliant  by  December  31,  1998.  Year 2000 work on
     remaining systems will continue through 1999. In addition,  the Company has
     contacted  other  entities  on which it relies to process  and  support its
     business.  The  Company  will  react to their  plans to  achieve  Year 2000
     compliance and will adjust operations as required.  The Company believes it
     will  successfully  address its Year 2000 issue  without  material  adverse
     consequences to the Company.  However, there can be no assurance that other
     entities with which the Company interacts will achieve Year 2000 compliance
     or that the failure by such entities to achieve Year 2000 compliance  would
     not have a material adverse effect on the Company.

     Pursuant  to  agreements  between  the  Company  and its  agents and agency
     managers  (collectively  referred to  hereafter  as  "agents"),  subject to
     certain  conditions  including  length  of  service,  confidentiality,  and
     non-competition,  certain agents are eligible to receive  monthly  extended
     earnings  payments  for a period  of up to eight  years  subsequent  to the
     termination  of their  association  with the  Company.  Historically,  such
     payments  have been funded by  deductions  from the  commissions  earned by
     successor  agents  who have  assumed  the  right to  service  the  books of
     business  previously  serviced by eligible former agents  subsequent to the
     termination  of  the  former  agent's  association  with  the  Company.  As
     described in note 2 - Prior Period Adjustments,  the Company has recorded a
     $10,157,000  liability for the extended earnings program (the "Program") in
     accordance  with  Statement  of  Financial  Accounting  Standards  No. 112,
     "Employers'  Accounting for Postemployment  Benefits"  ("Statement 112") to
     account  for the  Program.  During the third  quarter of 1998,  the Company
     intends  to  modify  the  agreements  with its  agents to  include  revised
     conditions  under  which  eligible  agents may  receive  extended  earnings
     payments.  In addition to the  conditions  described  previously,  extended
     earnings  will be paid only if a  successor  agent(s)  assumes the right to
     service  the book of business of the  eligible  former  agent and agrees to
     become primarily  responsible for making the extended earnings payments. In
     the event that no successor  agent(s) assumes the right to service the book
     of business of an eligible  former agent,  the Company has no obligation to
     make the extended earnings payments.  The Company has no intention to waive
     this  provision  of its  agreements  with  its  agents.  As a  result,  the
     successor  agent(s),   not  the  Company,   will  be  the  primary  obligor
     responsible  for extended  earnings  payments.  Since the  inception of the
     Program in 1986,  the Company  has always  been able to identify  successor
     agents willing to assume the rights to service such books of business.  The
     Company  will act as guarantor  of the amounts  payable to eligible  former
     agents who have terminated their  association with the Company by successor
     agents  who  agree to make the  extended  earnings  payments.  The  Company
     expects to enforce the terms of the  guarantee in the event of default by a
     successor  agent.  When the Company's  modified  agreements with its agents
     become  effective,  which the  Company  expects  to be during  the third or
     fourth quarter of 1998, approximately $6,319,000 of the Company's Statement
     112 liability will be extinguished  and the Company expects to record a net
     gain on this  extinguishment of approximately  $4,171,000  ($6,319,000 less
     taxes of  $2,148,000).  The  Company  is primary  liable for its  remaining
     Statement  112  liability  which  will  be  approximately   $3,838,000  and
     represents  the  aggregate  amount owed by the  Company to eligible  former
     agents  that have  terminated  their  association  with the Company and are
     currently  receiving  extended earnings payments.  The Company's  remaining
     Statement 112 liability is being funded by deductions  from the commissions
     earned by successor  agents who have assumed the right to service the books
     of  business  previously  serviced  by  eligible  former  agents  who  have
     terminated  their  association with the Company pursuant to agreements with
     such agents. Funding from successor agents is subject to the ability of the
     successor  agents  to  generate  sufficient   commissions  to  satisfy  the
     liability.




<PAGE>


     6   Acquisition of Farm Family Life

     Farm Family  Holdings  entered into an Option  Purchase  Agreement with the
     shareholders  of Farm  Family Life  pursuant to which Farm Family  Holdings
     has,  for a two-year  period  commencing  on July 26,  1996,  the option to
     acquire  Farm Family Life  subject to certain  conditions.  On February 26,
     1998, the Board of Directors of Farm Family Holdings  approved the exercise
     of the option to acquire Farm Family Life and its wholly  owned  subsidiary
     United Farm Family. Under the terms of the Option Purchase Agreement,  Farm
     Family Holdings will pay an exercise price of $37.5 million to acquire Farm
     Family  Life,  consisting  of $31.5  million of common stock of Farm Family
     Holdings,  and $6 million stated value of 6-1/8% voting  preferred stock of
     Farm Family Holdings,  less certain expenses to be paid by Farm Family Life
     in the  acquisition on behalf of the  shareholders of Farm Family Life. The
     proposed  acquisition of Farm Family Life is subject to the approval of the
     shareholders   of  Farm  Family   Holdings  and  receipt  of  all  required
     governmental  approvals.  Management  expects that the  acquisition of Farm
     Family Life will be brought to the shareholders of Farm Family Holdings for
     their approval in 1998.

     The  following  unaudited  pro  forma  consolidated  financial  information
     reflects  the  acquisition  by the  Company of Farm  Family  Life under the
     purchase  method of accounting.  The pro forma  consolidated  balance sheet
     combines balance sheets of the Company and Farm Family Life as of March 31,
     1998,  as if the  acquisition  had occurred as of March 31,  1998.  The pro
     forma  consolidated  statements  of income  combines the  operations of the
     Company and Farm Family Life for the year ended  December  31, 1997 and the
     three  months  ended March 31, 1998 as if the  acquisition  had occurred on
     January 1, 1997

     The pro forma  adjustment and pro forma  combined  amounts are provided for
     informational  purposes  only  and are not  necessarily  indicative  of the
     actual  financial  position or results of  operations  that would have been
     achieved had the acquisition  been consummated at the dates indicated or of
     future  results.  The pro  forma  financial  statements  should  be read in
     conjunction  with the  historical  financial  statements of the Company and
     Farm Family Life.

     The pro forma financial statements are based upon available information and
     certain  assumptions  that  the  Company  believes  are  reasonable  in the
     circumstances.  The Company's preliminary  allocation of purchase price was
     based upon the  estimated  fair value of assets  acquired  and  liabilities
     assumed.  The actual  allocation  will be based upon  valuations  as of the
     closing date of the acquisition  and,  accordingly,  the final  allocations
     will be different from the amounts herein.


<PAGE>
<TABLE>
<CAPTION>


              Farm Family Holdings, Inc.
    Unaudited Pro Forma Consolidated Balance Sheet
                    March 31, 1998
                   ($ in thousands)
                                                                                              Pro
                                                                                             Forma
                                                          Farm Family     Farm Family      Adjustments
                                                            Holdings         Life            Dr.         Cr.       Pro Forma
ASSETS
Investments
Fixed maturities
<S>                                                             <C>           <C>          <C>         <C>              <C>         
     Available for sale                                         $259,956      $698,929     $           $                $958,885
     Held to maturity, at amortized cost                           8,602                                                   8,602
   Equity securities                                               4,730        40,393                                    45,123
   Mortgage loans                                                    745        13,361                                    14,106
   Policy loans                                                                 29,386                                    29,386
   Other invested assets                                             544           724                                     1,268
   Short-term investments                                         11,609         6,582                                    18,191
                                                        -------------------------------------------------------------------------
        Total investments                                        286,186       789,375                                 1,075,561
                                                        -------------------------------------------------------------------------

Cash                                                               5,327         1,378                                     6,705
Insurance receivables:
   Reinsurance receivables                                        15,630         1,960                                    17,590
   Premiums receivable                                            31,912                           (D)     107            31,805
Deferred acquisition costs                                        13,401        30,661             (B)  30,661            13,401
Present value of future profits                                                        (B)  20,941                        20,941
Accrued investment income                                          4,820        12,765                                    17,585
Property and equipment, net                                                     12,416 (B)   4,235                        16,651
Deferred income tax asset, net                                     4,463                                                   4,463
Prepaid reinsurance premiums                                         643                                                     643
Receivable from affiliates, net                                   18,191                           (D)  18,191                 0
Other assets                                                       3,194         1,827             (A)     824             4,197
                                                        -------------------------------------------------------------------------
        Total Assets                                            $383,767      $850,382     $25,176     $49,783        $1,209,542
                                                        -------------------------------------------------------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
   Reserves for losses and loss adjustment expenses             $163,498       $           $           $                $163,498
   Future policy and contract benefits                                         216,619                                   216,619
   Funds on deposit from policyholders                                         423,112 (B)   2,251                       420,861
   Unearned premium reserve                                       69,119                                                  69,119
   Accrued dividends to policyholders                                            5,023                                     5,023
   Reinsurance premiums payable                                    1,640                                                   1,640
   Deferred income tax liability                                                33,780 (B)   1,133                        32,647
   Payable to affiliate                                                         18,298 (D)  18,298                             0
   Accrued expenses and other liabilities                         22,024         4,800             (B)     100            26,924
   Debt                                                            1,264                                                   1,264
   Participating policyholders' interest                                       109,125                                   109,125
                                                        -------------------------------------------------------------------------
        Total liabilities                                        257,545       810,757      21,682         100        $1,046,720
                                                        -------------------------------------------------------------------------
Commitments and contingencies
Mandatory redeemable preferred stock                                                               (A)   5,856             5,856

Stockholders' equity:
   Common stock                                                       53         3,001 (C)   3,001 (A)       8                61
   Additional Paid in Capital                                     92,906                           (A)  30,736           123,642
   Retained earnings                                              25,904        34,931 (C)  34,931                        25,904
   Accumulated other comprehensive income                          7,359         1,693 (C)   1,693                         7,359
                                                        -------------------------------------------------------------------------
        Total stockholder's equity                               126,222        39,625      39,625      30,744           156,966
                                                        -------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                      $383,767      $850,382     $61,307     $36,700        $1,209,542
                                                        -------------------------------------------------------------------------
                                   See accompanying notes to unaudited pro forma consolidated balance sheet
</TABLE>


<PAGE>

                         Farm Family  Holdings,  Inc. 
          Notes to Unaudited Pro Forma  Consolidated  Balance Sheet 
                              March 31, 1998 
                             ($ in thousands)

(A) The following pro forma  adjustments  reflect the funding of the acquisition
and consideration given ($37,500 less certain expenses currently estimated to be
equal to approximately $900 to be paid by Farm Family Life in the acquisition on
behalf of the selling stockholders)

     Series A Preferred stock                                           ($5,856)

     Unregistered  common stock issued  (824,650  shares  issued,
     $.01 par  value)  in the  acquisition  assuming  an  average
     closing  price of $37 9/32 if the  closing  had  occurred on
     April 6, 1998.  The  actual  average  closing  price and the
     actual  number of shares of Common Stock that will be issued
     to the  selling  stockholders  may vary  significantly  from
     these amounts.                                                          (8)
                        
     
     Paid in capital                                                    (30,736)

     Expenses relating to acquisition                                        824

(B) The  following  pro forma  adjustments  result  from the  allocation  of the
purchase price for the acquisition based on the fair value of the underlying net
assets acquired.

     Assets Adjustment of carrying amount of properties  occupied
     by Farm  Family  Life  based on a current  appraisal  of the
     estimated  fair market value of the  building.  In addition,
     based on information  contained in the current appraisal and
     an evaluation of the current condition of the building,  the
     estimated useful life has been changed to 20 years.                  $4,235

     Elimination  of  historical   deferred   acquisition   costs       (30,661)
                                                                       
     Adjustment  to  record   present  value  of  future  profits
     calculated  based on a discount  rate  equal to each  year's
     earned rate for traditional insurance products,  which range
     from 8% to 9%, and each year's  credited  rate for annuities
     and universal life products, which range from 6% to 7%, less
     the excess of net assets  acquired over the purchase  price.
     The earned rate for traditional life insurance  products and
     the credited rate for annuities and universal  life products
     is the rate used by Farm Family  Life to credit  interest to
     policyholders'  funds held by these products.  The amount of
     interest accrued on the unamortized  present value of future
     profits  balance  during  the  year was  $0.4  million.  The
     interest  accrual rate was 6.5% for universal life products,
     6.3% for annuities, and 9.0% for traditional life products.

     For  traditional  insurance  products,  the present value of
     future profits is amortized,  with interest in proportion to
     the ratio of  estimated  annual  revenues  over the contract
     period.  For universal life contracts and annuity contracts,
     the  present  value of  future  profits  is  amortized  at a
     constant rate based upon the amount  expected to be realized
     over  the  life  of  the  contracts,  which  is  reevaluated
     annually.  For most life  insurance,  a 15-year  to  40-year
     amortization  period is used,  and a 20-year  period is used
     for annuities.  Approximately $2.1 million is expected to be
     amortized  during each of the years ended December 31, 1998,
     1998, 2000, 2001 and 2002.                                           20,941







                          Farm Family Holdings, Inc.
              Notes to Unaudited Pro Forma Consolidated Balance Sheet
                               March 31, 1998
                              ($ in thousands)

Liabilities  Adjustment  to reflect  the net  deferred  tax  benefit of purchase
accounting adjustments using a statutory rate of 34% $1,133

Adjustment to record liability for Guaranty Funds                          (100)

Adjustment of carrying  amount of funds on deposit from  policyholders  based on
fair market  value.  Policyholder  funds held at  variable  rates are carried at
their  account  value  which   approximates   fair  value.  The  fair  value  of
policyholder  funds  held at fixed  rates  is the  present  value  of the  funds
calculated using current market rates.                                     2,251

(C) Adjustment to eliminate Farm Family Life's stockholder's equity

(D) Adjustment to eliminate intercompany balances



<PAGE>

<TABLE>
<CAPTION>

                    Farm  Family  Holdings,  Inc. 
   Unaudited  Pro Forma  Consolidated Statement  of Income 
              For the three months ended March 31, 1998 
              ($in thousands, except per share data)

                                                                                                   Pro
                                                                                                  Forma
                                                         Farm Family       Farm Family          Adjustments
                                                          Holdings             Life           Dr.          Cr.      Pro Forma

Revenues:
<S>                                                           <C>                     <C>    <C>         <C>            <C>         
    Premiums from property/casualty operations                $42,815                 $0     $           $              $42,815
    Premiums from life and health operations                                       7,827                                  7,827
    Net investment income                                       4,767             13,889                                 18,656
    Realized investment gains (losses), net                       126                663                                    789
    Policy and contract charges                                                    1,167                                  1,167
    Other income                                                  219                264 (c)    217                         266
                                                        ------------------------------------------------------------------------
        Total revenues                                         47,927             23,810        217                      71,520
                                                        ------------------------------------------------------------------------

Losses, Benefits and Expenses:
    Losses and loss adjustment expenses                        32,139                469                                 32,608
    Benefits to policyholders                                                      6,052                                  6,052
    Underwriting & operating expenses                          11,474              1,994 (a)     37  (c)      217        13,288
    Non-recurring charges                                                             92                                     92
    Interest credited to policyholders                                             6,309                                  6,309
    Amortization of policy acquisition costs                                       1,782             (a)    1,782             0
    Amortization of present value of future profits                                      (a)    516                         516
    Interest expense                                               25                                                        25
    Dividends to policyholders                                     50                                                        50
    Participating policyholders' interest                                          5,753 (a)  1,579  (a)      444         6,888

                                                        ------------------------------------------------------------------------
        Total losses and expenses                              43,688             22,451      2,132         2,443        65,828
                                                        ------------------------------------------------------------------------

        Net Income before federal income tax expense            4,239              1,359      2,349         2,443         5,692

        Federal income tax expense                              1,217                455 (b)     32                       1,704
                                                        ------------------------------------------------------------------------

        Net Income before preferred stock dividends             3,022                904      2,381         2,443         3,988

        Preferred stock dividends                                                        (a)     90                          90
                                                        ------------------------------------------------------------------------

        Net Income applicable to common shareholders           $3,022               $904     $2,471        $2,443        $3,898
                                                        ------------------------------------------------------------------------

        Net Income per Common Share - Basic                     $0.58                                                     $0.64
                                                        --------------                                            --------------

        Net Income per Common Share - Diluted                   $0.57                                                     $0.64
                                                        --------------                                            --------------

        Weighted average shares - Basic                     5,253,813                                (d)  824,650     6,078,463
                                                        --------------                                            --------------

        Weighted average shares - Diluted                   5,301,498                                (d)  824,650     6,126,148
                                                        --------------                                            --------------
See accompanying notes to unaudited pro forma consolidated statements of income

</TABLE>


<PAGE>


                             Farm Family Holdings,  Inc. 
          Notes to Unaudited Pro Forma Consolidated Statements of Income
                      For the three months ended March 31, 1998 
                       ($ in thousands, except per share data)

(a)  Adjustment  resulting  from the  allocation  of the purchase  price for the
acquisition  based on the estimated  fair value of the underlying net assets are
as follows:

     Additional  depreciation  expense incurred due an adjustment
     of the fair market value of the building  based on a current
     appraisal and a change in the  estimated  useful life of the
     building to 20 years based on  information  contained in the
     current appraisal and an evaluation of the current condition
     of the building                                                         $37

     Adjustment to reverse  amortization of deferred  acquisition
     costs                                                               (1,782)

     Participating   policyholders'   share  of  amortization  of
     deferred acquisition costs                                            1,579


     Adjustment to record amortization of present value of future
     profits                                                                 516

     Participating   policyholders'   share  of  amortization  of
     present value of future profits                                       (444)

     Series A Preferred  stock  dividends on estimated fair value
     of $5,856 of  preferred  stock at a rate of 6 1/8% per annum             90
                                                                              

(b)  Adjustment to reflect the federal  income tax effect of item
     (a) above using statutory rate of 34%                                    32

(c) Adjustment to eliminate intercompany balances                            217

(d) Adjustment to reflect estimated  additional shares of common stock issued in
the acquisition assuming an average closing price of $37 9/32 if the closing had
occurred  on April 6, 1998.  The  actual  average  closing  price and the actual
number of shares of common stock that will be issued to the selling stockholders
may vary significantly from these amounts.                               824,650



<PAGE>
<TABLE>
<CAPTION>


               Farm Family Holdings, Inc.
  Unaudited Pro Forma Consolidated Statement of Income
          For the year ended December 31, 1997
         ($ in thousands, except per share data)

                                                                                                    Pro
                                                                                                   Forma
                                                           Farm Family       Farm Family         Adjustments
                                                             Holdings            Life           Dr.         Cr.     Pro Forma

Revenues:
<S>                                                             <C>                 <C>       <C>        <C>           <C>          
     Premiums from property/casualty operations                 $149,220            $9,020    $          $             $158,240
     Premiums from life and health operations                                       30,505                               33,356
     Net investment income                                        18,077            54,964                               73,041
     Realized investment gains (losses), net                       5,406             2,914                                8,320
     Policy and contract charges                                                     5,041                                5,041
     Other income                                                  1,020             1,153 (c)    808                     1,365
                                                          ----------------------------------------------------------------------
         Total revenues                                          173,723           103,597        808                   279,363
                                                          ----------------------------------------------------------------------

Losses, Benefits and Expenses:
     Losses and loss adjustment expenses                         103,301             9,975                              113,276
     Benefits to policyholders                                                      26,843                               26,843
     Underwriting & operating expenses                            43,320             7,748 (a)    158 (c)      808       50,418
     Non-recurring charges                                                             707                                  707
     Interest credited to policyholders                                             24,813                               24,813
     Amortization of policy acquisition costs                                        6,852            (a)    6,852            0
     Amortization of present value of future profits                                       (a)  2,233                     2,233
     Interest expense                                                102                                                    102
     Dividends to policyholders                                      282                                                    282
                                                          ----------------------------------------------------------------------
     Participating policyholders' interest                                          21,617 (a)  5,994 (a)    1,929       25,682
                                                          ----------------------------------------------------------------------
         Total losses and expenses                               147,005            98,555      8,385        9,589      244,356
                                                          ----------------------------------------------------------------------

         Net Income before federal income tax expense             26,718             5,042      9,193        9,589       32,156

         Federal income tax expense                                9,218             1,702 (b)    135                    11,055
                                                          ----------------------------------------------------------------------

         Net Income before preferred stock dividends              17,500             3,340      9,328        9,589       21,101

         Series A Preferred stock dividends                                                (a)    359                       359
                                                          ----------------------------------------------------------------------

         Net Income applicable to common shareholders            $17,500            $3,340     $9,687       $9,589       20,742
                                                          ----------------------------------------------------------------------

         Net Income per Common Share - Basic                       $3.33                                                  $3.41
                                                          ---------------                                          -------------

         Net Income per Common Share - Diluted                     $3.32                                                  $3.40
                                                          ---------------                                          -------------

         Weighted average shares - Basic                       5,253,813                              (d)  824,650    6,078,463
                                                          ---------------                                          -------------

         Weighted average shares - Diluted                     5,270,947                              (d)  824,650    6,095,597
                                                          ---------------                                          -------------
                               See accompanying notes to unaudited pro forma consolidated statements of income
</TABLE>


<PAGE>


                        Farm Family Holdings,  Inc. 
          Notes to Unaudited Pro Forma Consolidated Statements of Income
                    For the year ended December 31, 1997 
                  ($ in thousands, except per share data)

(a) Adjustment resulting from the allocation of the purchase price for the
Acquisition based on the estimated fair value of the underlying net assets are
as follows:

     Additional  depreciation  expense incurred due an adjustment
     of the fair market value of the building  based on a current
     appraisal and a change in the  estimated  useful life of the
     building to 20 years based on  information  contained in the
     current appraisal and an evaluation of the current condition
     of the building                                                        $158

     Adjustment to reverse  amortization of deferred  acquisition
     costs                                                               (6,852)

     Participating   policyholders'   share  of  amortization  of
     deferred acquisition costs 5,994

     Adjustment to record amortization of present value of future
     profits                                                               2,233

     Participating   policyholders'   share  of  amortization  of
     present value of future profits                                     (1,929)

     Series A Preferred  stock  dividends on estimated fair value
     of $5,856 of  preferred  stock at a rate of 6 1/8% per annum
                                                                             359

     (b)  Adjustment to reflect the federal  income tax effect of
     item (a) above using statutory rate of 34%                              135

     (c) Adjustment to eliminate intercompany balances                       808

     (d)  Adjustment to reflect  estimated  additional  shares of
     Common Stock issued in the  acquisition  assuming an average
     closing  price of $37 9/32 if the  closing  had  occurred on
     April 6, 1998.  The  actual  average  closing  price and the
     actual  number of shares of common Stock that will be issued
     to the  selling  stockholders  may vary  significantly  from
     these amounts.                                                      824,650



<PAGE>


Management's  Discussion and Analysis of Financial  Condition and
Results of Operations.

General

The following  discussion includes the operations of Farm Family Holdings,  Inc.
("Farm  Family  Holdings")  and  its  wholly  owned  subsidiaries  (collectively
referred to as the "Company"). The primary subsidiary of Farm Family Holdings is
Farm Family Casualty Insurance Company ("Farm Family Casualty").  The operations
of the Company are closely  related  with those of its  affiliates,  Farm Family
Life Insurance Company ("Farm Family Life"), and Farm Family Life's wholly owned
subsidiary, United Farm Family Insurance Company ("United Farm Family").

Farm Family  Casualty is a specialized  property and casualty  insurer of farms,
other  generally  related   businesses  and  residents  of  rural  and  suburban
communities  primarily in the Northeastern  United States.  Farm Family Casualty
provides property and casualty insurance  coverages to members of the state Farm
Bureau(R) organizations in New York, New Jersey, Delaware, West Virginia and all
of the New England states.  Membership in a state Farm Bureau  organization is a
prerequisite  for  voluntary  insurance  coverage  (except for  employees of the
Company and its affiliates).

The Company's  operating  results are subject to significant  fluctuations  from
period to period depending upon, among other factors, the frequency and severity
of losses from  weather  related and other  catastrophic  events,  the effect of
competition  and  regulation  on the  pricing of  products,  changes in interest
rates, general economic conditions, tax laws and the regulatory environment.  As
a condition  of its license to do  business  in various  states,  the Company is
required to participate  in a variety of mandatory  residual  market  mechanisms
(including  mandatory  pools) which  provide  certain  insurance  (most  notably
automobile  insurance)  to  consumers  who are  otherwise  unable to obtain such
coverages from private  insurers.  In all such states,  residual  market premium
rates are subject to the  approval of the state  insurance  department  and have
generally  been  inadequate.  The amount of future  losses or  assessments  from
residual market  mechanisms  cannot be predicted with certainty and could have a
material adverse effect on the Company's results of operations.

For the three month  periods  ended  March 31,  1998 and 1997,  33.2% and 36.3%,
respectively,  of the  Company's  direct  written  premiums  were  derived  from
policies  written  in New York  and,  for the same  periods,  28.4%  and  23.8%,
respectively,  were derived from policies written in New Jersey.  For these same
periods,  no other state  accounted for more than 10.0% of the Company's  direct
written  premiums.  As a result,  the  Company's  results of  operations  may be
significantly affected by weather conditions, catastrophic events and regulatory
developments  in  these  two  states  and  in  the  Northeastern  United  States
generally.




<PAGE>


Safe Harbor  Statement  under The Private  Securities  Litigation  Reform Act of
1995:  With  exception  of  historical  information,  the matters  discussed  or
incorporated  by reference in this Report on Form 10-Q contains  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 that are based on management's current knowledge, expectations,  estimates,
beliefs  and  assumptions.  The  forward-looking  statements  in this  Form 10-Q
include,  but are not  limited  to,  statements  with  respect to the  Company's
potential  acquisition  of  Farm  Family  Life,  the  impact  of  the  potential
acquisition  of Farm Family Life on the  earnings and  shareholder  value of the
Company, projections of revenue, earnings, capital structure and other financial
items,  statements of the plans and objectives of the Company or its management,
and  statements  of  future  economic  performance  and  assumptions  underlying
statements  regarding the Company or its business.  Readers are hereby cautioned
that  certain  events or  circumstances  could  cause  actual  results to differ
materially from those estimated,  projected,  or predicted.  The forward-looking
statements in this Form 10-Q are not  guarantees of future  performance  and are
subject  to a number of  important  risks and  uncertainties,  many of which are
outside  the  Company's  control,  that  could  cause  actual  results to differ
materially.  These risks and uncertainties  include, but are not limited to, the
results of operations of the Company and Farm Family Life,  fluctuations  in the
market value of shares of the Company's  common stock,  the  satisfaction of the
closing  conditions  set  forth in the  Amended  and  Restated  Option  Purchase
Agreement (which conditions include, but are not limited to, the approval of the
Company's  shareholders  and  receipt  of all  required  government  approvals),
exposure  to  catastrophic  loss,  geographic  concentration  of loss  exposure,
general economic conditions and conditions specific to the property and casualty
insurance  industry,  including  its  cyclical  nature,  regulatory  changes and
conditions,  rating agency policies and practices,  competitive factors,  claims
development and the impact thereof on loss reserves and the Company's  reserving
policy, the adequacy of the Company's reinsurance programs,  developments in the
securities markets and the impact thereof on the Company's investment portfolio,
factors relating to the Company's ability to successfully  address its Year 2000
issues and other risks listed from time to time in the Company's  Securities and
Exchange Commission  filings,  including the Form 10-K filed for the fiscal year
ended  December 31, 1997 and the  Prospectus  dated July 22, 1996.  Accordingly,
there  can  be  no   assurance   that  actual   results   will  conform  to  the
forward-looking statements in this Form 10-Q.


Results of Operations

The Three  Months  Ended  March 31,  1998  Compared  to the Three Months Ended 
March 31, 1997

Premiums
Premium revenue  increased $7.8 million or 22.4%,  during the three months ended
March 31, 1998 to $42.8  million from $35.0 million for the same period in 1997.
The  increase  in premium  revenue in 1998  resulted  from an  increase  of $5.9
million  in earned  premiums  on  additional  business  directly  written by the
Company,  and an  increase  of $0.1  million  in earned  premiums  from  assumed
business and a decrease of $1.8 million in earned  premiums  ceded to reinsurers
and not retained by the Company. The $5.9 million increase in earned premiums on
additional  business directly written by the Company was primarily  attributable
to an increase of $4.8 million,  or 15.6%, in earned premiums from the Company's
primary  products  (personal  and  commercial  automobile  products  other  than
assigned risk  automobile  business,  the Special Farm  Package,  businessowners
products, homeowners products, and Special Home Package), as well as an increase
of $0.7 million in earned  premiums  from the  Company's  workers'  compensation
business.  The Company has  approximately  158,600 total policies in force.  The
number of policies in force related to the Company's primary products  increased
by 11.7% to  approximately  130,600  as of March  31,  1998  from  approximately
116,900 as of March 31, 1997 and the average premium earned for each such policy
increased by 3.4% during the three  months ended March 31, 1998  compared to the
same period in 1997. Net written  premiums  increased 28.9% to $47.4 million for
the three  months  ended March 31, 1998  compared to $36.7  million for the same
period in 1997. The increase in net written  premiums is primarily  attributable
to the growth in direct  writings to  customers,  a decrease in written  premium
ceded to  reinsurers  and, to a lesser  extent,  an  increase  in the  Company's
voluntary  assumed  reinsurance  business.  Geographically,  the increase in the
Company's  direct  writings  came  from New  Jersey,  New  York,  Massachusetts,
Connecticut,  Delaware,  West Virginia,  and Rhode Island.  In addition,  direct
writings  of  all  the  Company's   primary  products,   particularly   personal
automobile, increased during the first quarter of 1998.

Net Investment Income
Net  investment  income  increased  $0.4 million or 7.9% to $4.8 million for the
three months ended March 31, 1998 from $4.4 million for the same period in 1997.
The increase in net investment income was primarily the result of an increase in
average cash and invested  assets (at  amortized  cost) of  approximately  $44.3
million,  or 18.8% from March 31, 1998  compared to March 31,  1997.  The return
realized on the  Company's  cash and  investments  was 6.9% for the three months
ended March 31, 1998 and 7.5% for the same period in 1997.  The reduction in the
return  realized  on  the  Company's  cash  and  invested  assets  is  primarily
attributable to an increase in investment in tax-exempt  bonds which provide for
a larger after tax return.

Losses and Loss Adjustment Expenses
Losses and loss adjustment  expenses increased $7.4 million,  or 30.1%, to $32.1
million for the three  months  ended  March 31, 1998 from $24.7  million for the
same period in 1997.  Loss and loss  adjustment  expenses  were 75.1% of premium
revenue for the three months  ended March 31, 1998  compared to 70.6% of premium
revenue for the same period in 1997.  The  increase in loss and loss  adjustment
expenses  as a percent of premium  revenue  was  primarily  attributable  to the
increase in weather related losses during the first three months of 1998. Losses
believed to be weather related aggregated $4.1 million in the three months ended
March 31,  1998  compared  to $2.1  million  for the same  period  in 1997.  The
increase in weather  related  losses was  primarily  attributable  to severe ice
storms which  impacted the upstate New York and Maine  territories  in which the
Company writes business.

Underwriting Expenses
Underwriting  expenses increased $1.0 million, or 9.4%, to $11.5 million for the
three  months  ended  March 31,  1998 from $10.5  million for the same period in
1997.  For the three  months ended March 31, 1998,  underwriting  expenses  were
26.8% of premium  revenue  compared  to 30.0% for the same  period in 1997.  The
decrease in underwriting  expenses as a percent of premium revenue was primarily
attributable  to a greater  relative  increase in the Company's  premium revenue
than in the  level  of  overhead  expenses,  as well  as the  continuation  of a
company-wide expense management program.

Federal Income Tax Expense
Federal  income tax expense  decreased $0.3 million to $1.2 million in 1998 from
$1.5  million in 1997.  Federal  income tax expense  was 28.7% of income  before
federal income tax expense for the three months ended March 31, 1998 compared to
34.5% for the same period in 1997.

Net Income Net  income  increased  $0.2  million to $3.0  million  for the three
months  ended  March  31,  1998 from $2.8  million  for the same  period in 1997
primarily as a result of the foregoing factors.




<PAGE>


Liquidity and Capital Resources

Net cash  provided by  operating  activities  was $5.2  million and $7.8 million
during the three month periods ended March 31, 1998 and 1997, respectively.  The
decrease in net cash  provided by operating  activities  during the three months
ended March 31, 1998 was primarily  attributable  to an increase of $2.6 million
of loss and loss  adjustment  expenses  paid to $25.3 million from $22.7 million
for the three months ended March 31, 1998 and 1997, respectively.

Net cash used in investing  activities  was $5.8 million during the three months
ending  March 31,  1998  compared  to $8.0  million  for the same period in 1997
primarily  as a result of an  increase  in  investment  collections  from  fixed
maturities,  which was partially offset by an increase in short-term investments
by the Company.

The Company has in place unsecured lines of credit with two banks under which it
may borrow up to $12.0 million.  At March 31, 1998, no amounts were  outstanding
on either of the lines of credit.  In addition,  at March 31, 1998,  Farm Family
Casualty had $1.3 million  principal  amount of surplus notes  outstanding.  The
surplus  notes bear  interest at the rate of eight percent per annum and have no
maturity date. Farm Family  Casualty  redeemed all of the surplus notes on April
1, 1998.

Future Application of Accounting Standards

In February of 1998, the Financial  Accounting  Standards Board issued Statement
of  Financial  Accounting  Statement  No.  132,  "Employers'  Disclosures  about
Pensions and Other  Postretirement  Benefits,"  ("Statement  132") effective for
years  beginning  after December 31, 1997.  Statement 132 revises the disclosure
requirements  but does not change the measurement or recognition of pensions and
other post  retirement  benefits.  The adoption of Statement  132 will result in
revised  and  additional  disclosures  but will have no effect on the  financial
position, results of operations, or liquidity of the Company.



Item 6:        Exhibits and Reports on Form 8-K

                                  EXHIBIT INDEX

                      FARM FAMILY HOLDINGS, INC. FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 1998


Exhibit Number       Document Description

*2.1                Plan of  Reorganization  and  Conversion  dated February 14,
                    1996 as amended by Amendment No. 1, dated April 23, 1996

*3.1                Certificate of Incorporation of Farm Family Holdings, Inc.

*3.2                Bylaws of Farm Family Holdings, Inc.


*Incorporated by reference to Registration Statement No. 333-4446



<PAGE>


Reports on Form 8-K

        A report on Form 8-K was filed on January  28,  1998  reporting  a press
release issued  announcing that a committee of its  independent  directors and a
committee  representing  the  shareholders  of Farm  Family  Life  negotiated  a
revision  of the form of  consideration  to be paid,  under the Option  Purchase
Agreement  pursuant to which Farm Family  Holdings has an option of acquire Farm
Family Life.

         A report on Form 8-K was filed on February  27, 1998  reporting a press
release issued announcing the Company's  operating results for the quarter ended
and the year ended December 31, 1997.

No financial statements were filed with either Form 8-K.


<PAGE>


Pursuant  to the  requirements  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.


                           FARM FAMILY HOLDINGS, INC.
                                  (Registrant)



October 20, 1998 By: /s/ Philip P. Weber
------------     ----------------------------------------------------------
  (Date)         Philip P. Weber, President & Chief Executive Officer
                              (Principal Executive Officer)




October 20, 1998 By: /s/ Timothy A. Walsh
------------    -------------------------------------------------------------
  (Date)        Timothy A. Walsh, Executive Vice President - Finance & Treasurer
                         (Principal Financial & Accounting Officer)