EXHIBIT 12



<PAGE>



                    COMPUTATION OF RATIO OF MARGINS TO FIXED
                    CHARGES AND PREFERRED DIVIDENDS COMBINED
<TABLE>
<CAPTION>
                                                            AGWAY INC. AND CONSOLIDATED SUBSIDIARIES
                                                                   FOR THE YEARS ENDED JUNE 30,
                                                                     (THOUSANDS OF DOLLARS)
                                            ----------------------------------------------------------------
                                                1998         1997          1996         1995         1994
                                            -----------   ----------   -----------   ----------   ----------
<S>                                         <C>           <C>          <C>           <C>          <C>   
Margins before income taxes and
member refunds...........................   $   25,203    $  16,583    $   21,070    $  (6,053)   $    4,833

Fixed charges - Interest.................       67,728       64,432        63,721       56,507        49,849
              - Rentals..................        4,651        3,772         3,004        2,789         2,298
                                            -----------   ----------   -----------   ----------   ----------
Total fixed charges......................       72,379       68,204        66,725       59,296        52,147
                                            -----------   ----------   -----------   ----------   ----------
Adjusted net margins.....................   $   97,582    $  84,787    $   87,795    $  53,243    $   56,980
                                            ===========   ==========   ===========   ==========   ==========

Ratio of adjusted net margins to total
fixed charges............................          1.3          1.2           1.3       (a)              1.1
                                            ===========   ==========   ===========   ==========   ==========

Deficiency of adjusted net margins to
total fixed charges......................       N/D          N/D          N/D        $   6,053         N/D
                                            ===========   ==========   ===========   ==========   ==========

Fixed charges and preferred dividends
   combined:
Preferred dividend factor:
   Preferred dividend requirements.......   $    3,522    $   4,115    $    4,255    $   4,654    $    4,909
   Ratio of pre-tax margins to
   after-tax margins*....................         50.8%        64.3%         52.9%        71.1%         13.5%
   Preferred dividend factor on
   pre-tax basis.........................        6,933        6,400         8,043        6,546        36,363

Total fixed charges (above)..............       72,379       68,204        66,725       59,296        52,147
                                            -----------   ----------   -----------   ----------   ----------

Fixed charges and preferred dividends
combined.................................   $   79,312    $  74,604    $   74,768    $  65,842    $   88,510
                                            ===========   ==========   ===========   ==========   ==========

Ratio of adjusted net margins to fixed
charges and preferred dividends
combined**...............................          1.2          1.1           1.2       (b)           (b)
                                            ===========   ==========   ===========   ==========   ==========

Deficiency of adjusted net margins to
fixed charges and preferred dividends
combined.................................       N/D          N/D           N/D       $  12,599    $   31,530
                                            ===========   ==========   ===========   ==========   ==========
</TABLE>

*        Represents  pre-tax  adjusted  net margin  from  continuing  operations
         divided by after-tax margin, which adjusts dividends on preferred stock
         to a pre-tax basis.

**       Represents adjusted net margin divided by fixed charges and preferred
         dividends combined.

N/D      No deficiency.

(a)      Adjusted net margins are inadequate to cover total fixed charges.

(b)      Adjusted  net margins  are  inadequate  to cover  total  fixed  charges
         and preferred dividends combined.



<PAGE>


                    COMPUTATION OF RATIO OF MARGINS TO FIXED
                    CHARGES AND PREFERRED DIVIDENDS COMBINED
<TABLE>
<CAPTION>
                                                                  AGWAY INC. (PARENT)
                                                              FOR THE YEARS ENDED JUNE 30,
                                                                 (THOUSANDS OF DOLLARS)
                                            -----------------------------------------------------------------
                                                1998         1997          1996         1995         1994
                                            -----------   ----------   -----------   ----------   -----------
<S>                                         <C>           <C>          <C>          <C>           <C>       
Margins before income taxes and
member refunds...........................   $   19,819    $   3,535    $   24,106    $   4,600    $  (17,330)

Fixed charges - Interest.................        7,174        6,792         7,156        5,874        14,985
              - Rentals..................        2,375        2,074         1,506        1,960         1,183
                                            -----------   ----------   -----------   ----------   -----------
Total fixed charges......................        9,549        8,866         8,662        7,834        16,168
                                            -----------   ----------   -----------   ----------   -----------
Adjusted net margins.....................   $   29,368    $  12,401    $   32,768    $  12,434    $   (1,162)
                                            ===========   ==========   ===========   ==========   ===========

Ratio of adjusted net margins to total
fixed charges............................          3.1          1.4           3.8          1.6        (a)
                                            ===========   ==========   ===========   ==========   ===========

Deficiency of adjusted net margins to
total fixed charges......................       N/D          N/D           N/D          N/D       $   17,330
                                            ===========   ==========   ===========   ==========   ===========

Fixed charges and preferred dividends
  combined:
Preferred dividend factor:
   Preferred dividend requirements.......   $    3,522    $   4,115    $    4,255    $   4,654    $    4,909
   Ratio of pre-tax margin to
   after-tax margins*....................        133.1%       323.6%         90.9%     (291.2%)        214.5%
   Preferred dividend factor on..........  
   pre-tax basis.........................        2,646        1,272         4,681       (1,598)        2,289

Total fixed charges (above)..............        9,549        8,866         8,662        7,834        16,168
                                            -----------   ----------   -----------   ----------   -----------

Fixed charges and preferred dividends
combined.................................   $   12,195    $  10,138    $   13,343    $   6,236    $   18,457
                                            ===========   ==========   ===========   ==========   ===========

Ratio of adjusted net margins to fixed
charges and preferred dividends
combined**...............................          2.4          1.2           2.5          2.0        (b)
                                            ===========   ==========   ===========   ==========   ===========

Deficiency of adjusted net margins to
fixed charges and preferred dividends....       N/D          N/D           N/D          N/D       $   19,619
                                            ===========   ==========   ===========   ==========   ===========
</TABLE>

*        Represents  pre-tax  adjusted  net margin  from  continuing  operations
         divided by after-tax margin, which adjusts dividends on preferred stock
         to a pre-tax basis.

**       Represents adjusted net margin divided by fixed charges and preferred
         dividends combined.

N/D       No deficiency.

(a)      Adjusted net margins are inadequate to cover total fixed charges.

(b)      Adjusted  net margins  are  inadequate  to cover  total  fixed  charges
         and preferred dividends combined.