EXHIBIT 99


<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549




                                    FORM 11-K


                     ANNUAL REPORT PURSUANT TO SECTION 15(D)


                                     OF THE


                         SECURITIES EXCHANGE ACT OF 1934



                     FOR THE FISCAL YEAR ENDED JUNE 30, 1998



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
                  ---------------------------------------------
                            (FULL TITLE OF THE PLAN)


                                   AGWAY INC.
           ----------------------------------------------------------
          (NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN)



                               333 BUTTERNUT DRIVE
                             DEWITT, NEW YORK 13214
             -------------------------------------------------------
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES OF THE PLAN AND
                          THE ISSUER OF THE SECURITIES)







<PAGE>














                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                     Report on Audited Financial Statements

                        for the year ended June 30, 1998
     -----------------------------------------------------------------------






<PAGE>



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                             JUNE 30, 1998 AND 1997
     -----------------------------------------------------------------------




                                      INDEX
                                      -----

Report of Independent Accountants............................................F-2


Financial Statements:

         Statements of Net Assets Available for Benefits
                  as of June 30, 1998 and 1997...............................F-3

         Statements of Changes in Net Assets Available for Benefits
                  for the years ended June 30, 1998 and 1997.................F-4

         Notes to Financial Statements...............................F-5 to F-15


Supplemental Schedules (Form 5500 information):

         Item 27a.  Schedule of Assets Held for Investment Purposes
                       as of June 30, 1998.......................S-1.1 and S-1.2

         Item 27d.  Schedule of Reportable Transactions
                       for the year ended June 30, 1998....................S-2.1


















                                       F-1

<PAGE>








                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Employee Benefit Plans
     Administration Committee,
     Agway, Inc.

In our opinion, the accompanying statements of net assets available for benefits
and the  related  statements  of changes in net assets  available  for  benefits
present fairly, in all material respects,  the net assets available for benefits
of the AGWAY INC.  EMPLOYEES'  THRIFT  INVESTMENT  PLAN (the "Plan") at June 30,
1998 and 1997,  and the changes in net assets  available  for  benefits  for the
years then ended, in conformity with generally accepted  accounting  principles.
These financial statements are the responsibility of the Plan's management;  our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable  assurance about whether the financial statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.

Our audit was  performed  for the  purpose  of  forming  an opinion on the basic
financial statements taken as a whole. The supplemental  schedules listed in the
accompanying index are presented for the purpose of additional  analysis and are
not a  required  part of the  basic  financial  statements  but  are  additional
information required by the Employee Retirement Income Security Act of 1974. The
supplemental schedules have been subjected to the auditing procedures applied in
the audit of the basic  financial  statements  and, in our  opinion,  are fairly
stated in all material  respects in relation to the basic  financial  statements
taken as a whole.



/s/ PricewaterhouseCoopers LLP
    ---------------------------

Syracuse, New York
August 14, 1998





                                       F-2

<PAGE>



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                             June 30, 1998 and 1997
                                   -----------

                             (Thousands of Dollars)

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

BGI U.S. Equity Market Fund                    $     70,309          $   55,098

Agway, Inc., Preferred Securities                    25,899              27,699
Agway Financial Corporation, Subordinated
     Money Market Certificates                       22,773              19,190

Agway Financial Corporation, Subordinated
     Debentures                                       1,830               1,980

BGI Government/Corporate Bond Index Fund              2,910               2,085

Collective Cash Investment Funds                      2,328               2,558

Loans to participants                                 1,144               1,078
                                               -------------         -----------

         TOTAL INVESTMENTS                          127,193             109,688

Accrued income                                        1,982               1,887

Contributions receivable, employer                      903                 822
                                               -------------         -----------

NET ASSETS AVAILABLE FOR BENEFITS              $    130,078          $  112,397
                                               =============         ===========











 The accompanying  notes are  an  integral  part  of  the financial statements.

                                       F-3

<PAGE>



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

           STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

                   for the years ended June 30, 1998 and 1997
                                   -----------

                             (Thousands of Dollars)


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

Net increase of interest in common
       collective trust funds             $          15,996     $       13,385
Interest income                                       2,057              1,782
Dividend income                                       2,032              2,191
                                          ------------------    ---------------
                                                     20,085             17,358
                                          ------------------    ---------------
Contributions:
    Participants                                      6,131              5,513
    Agway, Inc.                                       1,349              1,233
                                          ------------------    ---------------
                                                      7,480              6,746
                                          ------------------    ---------------
         Total additions                             27,565             24,104
                                          ------------------    ---------------

Deductions:
    Benefit payments to participants                  9,593             12,390
    Trustee fees, administrative and
      other expenses                                    291                278
                                          ------------------    ---------------
                                                      9,884             12,668
                                          ------------------    ---------------
         Net additions                               17,681             11,436

Net assets available for benefits:
         Beginning of year                          112,397            100,961
                                          ------------------    ---------------

Net assets available for benefits:
         End of year                      $         130,078     $      112,397
                                          ==================    ===============













 The  accompanying   notes  are  an  integral part  of the financial statements.

                                       F-4

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

1.       DESCRIPTION OF THE PLAN
         The following brief  description of the Agway,  Inc.  Employees' Thrift
         Investment  Plan (the  "Plan")  is  provided  for  general  information
         purposes only.  Participants should refer to the Plan document for more
         complete information of benefits provided under the Plan.

         General
         The Plan is a defined  contribution  plan  covering  substantially  all
         full-time  employees of Agway,  Inc. (the  "Sponsor" or "Company")  and
         part-time  employees who have reached their first  anniversary date (as
         defined  in the Plan) and  worked  1,000  hours.  It is  subject to the
         provisions of the Employee  Retirement  Income Security Act of 1974, as
         amended ("ERISA").

         Contributions
         Participants may elect to contribute "regular  investments" of 2% to 6%
         of annual  compensation (as defined in the Plan). These investments can
         be made on a "pre-tax"  basis,  an  "after-tax"  basis or a combination
         thereof,  subject to  Internal  Revenue  Service  ("IRS")  limitations.
         Pre-tax  regular  investments are designed to take advantage of Section
         401(k) of the Internal  Revenue Code ("IRC") and are contributed to the
         Plan  before  being  subject to federal  income tax and, in most cases,
         state income tax. After-tax regular  investments are contributed to the
         Plan after being subject to federal and state income taxes.

         Participants  may invest an additional 1% to 9% of annual  compensation
         (as defined in the Plan) as "additional investments" on a pre-tax basis
         (subject to IRS limitations) if the participant contributes the maximum
         6% of regular  investments.  Amounts exceeding the pre-tax contribution
         limits  established by the IRS will be made on an after-tax basis based
         on the election of the participant.

         Participants  may also contribute  amounts  representing  distributions
         from other qualified defined benefit or contribution plans.

         The Sponsor  shall  contribute an amount equal to at least 10%, but not
         more than 50%, of each  participant's  regular  investment to the Plan.
         All employer  contributions  are invested in the Company Security Fund.
         The  discretionary  percentage of Sponsor  contributions  above 10% for
         each year of operation of the Plan shall be  determined by the Board of
         Directors of the Sponsor. The Sponsor's  contribution will be made each
         pay period at a rate of 10% of the  participant's  regular  investment.
         Any  amount  of the  Sponsor's  contribution  greater  than  10% of the
         participant's   regular  investment  as  determined  by  the  Board  of
         Directors  will be paid not later than the time  prescribed  by law for
         filing the  Sponsor's  federal  income  tax  return for the  applicable
         taxable year, including extensions for such filing.

                                       F-5

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

1.       DESCRIPTION OF THE PLAN (CONTINUED)

         Contributions (continued)
         The Sponsor  shall also  contribute on behalf of each  participant,  if
         necessary,  an amount  such that the rate of return on  current  market
         value of that portion of the Company  Security Fund not invested in the
         Sponsor's Money Market  Certificates  will equal one-half  percent less
         than the interest rate plus any declared  "extra" paid on the Sponsor's
         member   debentures.   This  contribution  is  made   semi-annually  to
         participants with amounts invested in the Company Security Fund.

         Participant Accounts
         Each   participant's   account  is  credited  with  the   participant's
         contributions and allocations of (a) the Sponsor's  contributions,  (b)
         plan  earnings,  and (c)  administrative  expenses.  Allocation of plan
         earnings is done on a monthly basis and is based on each fund's monthly
         earning  percentage  (fund earnings divided by fund market value) times
         the participant's accumulated investments and earnings in the fund. The
         benefit to which a  participant  is entitled is the benefit that can be
         provided from the participant's vested account.

         Vesting
         Participants  vest  immediately  in  their  contributions  plus  actual
         earnings thereon and Sponsor contributions and earnings thereon.

         Investment Options
         The Plan provides for the following separate investment fund choices to
         participants: the Stock Fund, Company Security Fund, Bond Fund and Cash
         Fund.  All   participant   contributions   and  earnings   thereon  are
         participant-directed.  Upon  enrollment in the Plan, a participant  may
         direct employee  contributions  in 25 percent  increments in any of the
         four funds.  A participant  may change  investment  options or elect to
         transfer   employee   contributions   up  to  once  a  month.   Sponsor
         contributions  and  earnings  thereon may not be  transferred  from the
         Company Security Fund to other  investment  funds. As of June 30, 1998,
         there were 4,961 employees and former  employees  participating in this
         Plan. The number of participants under each investment fund at June 30,
         1998, is as follows:

         Stock Fund                 3,777         Bond Fund                  667
         Company Security Fund      4,924         Cash Fund                  352





                                       F-6

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

1.       DESCRIPTION OF THE PLAN (CONTINUED)

         Investment Options (continued)

         Stock Fund
         The Stock Fund,  including  earnings thereon,  shall be invested in any
         common stock(s), common stock fund(s), or any security convertible into
         common  stock  as  the  Sponsor's  Employee  Benefit  Plans  Investment
         Committee  ("EBPIC") may deem  advisable  from time to time,  but which
         shall not include shares of stock or other securities of the Sponsor or
         any of its subsidiaries or affiliates. The investment manager will make
         purchases of such securities in the open market at prices prevailing in
         such market on the day of purchase.  Short-term obligations of the U.S.
         Government or other investments of a short-term nature may be purchased
         and held pending the  selection  and  purchase of suitable  securities.
         Substantially  all of the Stock Fund  investments were in the "Barclays
         Global  Investors,  N.A.  ("BGI") U.S.  Equity Market Fund" at June 30,
         1998 and 1997, which is a common  collective trust fund. As there is no
         market  quotation   available,   the  fair  value  of  the  Stock  Fund
         investments  is based  on the  unit  market  value  established  by the
         investment  manager.  This unit value is calculated by dividing the net
         assets of the applicable  Market Fund,  stated at quoted market values,
         by the units outstanding.

         Company Security Fund
         It is explicitly  provided and intended that the Company  Security Fund
         be invested in qualified Agway, Inc. securities. These qualified Agway,
         Inc. securities include cumulative  preferred stock and Agway Financial
         Corporation   (AFC)   subordinated   money  market   certificates   and
         debentures.  However,  if at  any  time  when  the  Trustee  has  funds
         available for such  investment and such  prescribed  securities are not
         available for purchase  from the Sponsor,  the Trustee is authorized to
         hold such funds in an interest bearing account, or to invest such funds
         in one or more  securities  of other  corporations,  as  instructed  by
         EBPIC,  which  are  comparable  to  the  prescribed  securities  of the
         Sponsor.  Securities of Agway,  Inc. will be purchased from the Sponsor
         at par  value or  principal  amount,  since  the  market  value of such
         securities  is  maintained  as such by the  Sponsor  as a result of its
         practice of repurchasing outstanding securities at par whenever holders
         thereof elect to tender them for redemption.








                                       F-7

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

1.       DESCRIPTION OF THE PLAN (CONTINUED)

         Investment Options (continued)

         Bond Fund
         The Bond Fund is invested  primarily  in bonds of U.S.  Government  and
         investment   grade   bonds  of   industrial,   financial   and  utility
         corporations.  "Investment  Grade"  is a term  for  securities  of high
         quality  that are rated BAA or better by Moody's  Investor  Service and
         BBB or better by Standard & Poor's  Corporation.  Substantially  all of
         the Bond Fund  investments were in the BGI  "Government/Corporate  Bond
         Index  Fund" at June 30,  1998 and 1997,  which is a common  collective
         trust fund. As there is no market  quotation  available,  fair value of
         the Bond Fund investments is based on the unit market value established
         by the  investment  manager.  This unit value is calculated by dividing
         the net assets of the Bond Index Fund,  stated at quoted  market value,
         by the units outstanding.

         Cash Fund
         The Cash Fund  investment  objective is to preserve  capital and earn a
         competitive  day-to-day  interest  rate.  It invests  in high  quality,
         short-term money market instruments whose maturities  normally will not
         exceed  one  year  and  are,  on  average,   less  than  three  months.
         Investments  may be  made  in  U.S.  Treasury  or  agency  obligations;
         obligations issued by financial,  industrial,  public utility, or other
         companies;  bankers' acceptances,  bank certificates of deposit or time
         deposits; commercial paper; and other similar obligations. The majority
         of  investments of the Cash Fund were in the BGI "Money Market Fund" at
         June 30, 1998 and 1997, which is a common collective trust fund.

         Loans to Participants
         The Plan also  includes  various  terms and  conditions  under  which a
         participating  employee can make loans from the Plan.  Participants may
         borrow up to 50% of their vested  account  balance.  Participant  loans
         must  be  no  less  than  $500  and  no  greater  than  $50,000.   Loan
         transactions  are treated as a transfer to (from) the investment  funds
         from (to) the participant loan fund. Loan terms range from 1 to 5 years
         or up to 20 years for the  purchase of a primary  residence.  The loans
         are  secured  by the  balance  in the  participant's  account  and bear
         interest  at a rate of 1 percent  over prime.  Interest  rates on loans
         outstanding at June 30, 1998 range from 7 to 10 percent.  Principal and
         interest are paid ratably through payroll deductions.




                                       F-8

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

1.       DESCRIPTION OF THE PLAN (CONTINUED)

         Payment of Benefits
         On  termination of service due to death,  disability or  retirement,  a
         participant  may elect,  in most  circumstances,  to  receive  either a
         lump-sum amount equal to the value of the participant's vested interest
         in his or her account,  and either monthly or annual  installments over
         periods  ranging from 5 to 20 years.  For termination of service due to
         other  reasons,  a  participant  may  receive  the value of the  vested
         interest in his or her account as a lump-sum distribution.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         The  financial  statements  of the Plan are prepared  under the accrual
         basis of accounting in conformity  with generally  accepted  accounting
         principles.  The accounting  principles and practices  which affect the
         more significant elements of the financial statements are:

         Investment Valuation
         Agway, Inc.  preferred stock and AFC subordinated money market and debt
         securities are valued at par, which  approximates fair value,  since it
         has been the Sponsor's practice to repurchase outstanding securities at
         par when  redeemed.  All Agway,  Inc.  securities are also purchased at
         par. All other Plan investments are held in bank commingled trust funds
         ("common  collective  trust funds"),  shares of which are valued at the
         net asset value of shares held by the Plan at year-end as determined by
         the investment manager.  Purchases and sales of securities are recorded
         on a  trade-date  basis.  Participant  loans are valued at cost,  which
         approximates fair value.

         Income Recognition
         Interest income from investments is recognized as earned. Dividends are
         recorded on the ex-dividend date. Gain or loss on sale of securities is
         based on average cost. The Plan presents in the statement of changes in
         net assets the net  increase  in interest  in common  collective  trust
         funds which consists of current year realized and  unrealized  gains or
         losses, interest and dividends.

         Trustee Fees, Administrative and Other Expenses
         Trustee  fees,  administrative  expenses  and all  other  expenses  are
         recognized in the period incurred. The Plan incurred approximately $245
         in 1998 and $238 in 1997 in administrative expenses paid to the Sponsor
         during the year.



                                       F-9

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         Use of Estimates
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions   that  affect  the  reported  amount  of  assets  and
         liabilities and disclosures of contingent assets and liabilities at the
         date of the financial  statements and the reported  amounts of revenues
         and expenses during the reporting  period.  Actual results could differ
         from those estimates.

         Risks and Uncertainties
         The Plan provides for various  investment options in any combination of
         three common  collective  trust funds (stock,  bond or cash) or Company
         securities. Investment securities are exposed to various risks, such as
         interest rate,  market and credit.  Due to the level of risk associated
         with certain investment securities and the level of uncertainty related
         to  changes  in the  value  of  investment  securities,  it is at least
         reasonably  possible  that  changes  in risks in the  near  term  would
         materially  affect  participants'  account  balances  and  the  amounts
         reported in the statement of net assets  available for benefits and the
         statement of changes in net assets available for benefits.





                                      F-10

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

3.       INVESTMENTS
         The Plan's investments are held by a bank-administered  trust fund. The
         following table presents the fair value of investments as determined by
         estimated market price. Investments that represent 5 percent or more of
         the Plan's net assets are separately identified.

         INVESTMENTS AT ESTIMATED FAIR VALUE
<TABLE>
<CAPTION>

                                                                                  1998                  1997
                                                                           ------------------    -----------------
         <S>                                                               <C>                   <C>
         Stock Fund:
              BGI U.S. Equity Market Fund                                  $           70,309    $          55,098
         Company Security Fund:
              Agway, Inc., Preferred Securities:
                  8% cumulative preferred stock - Series B                             19,942               19,942
                  7% cumulative preferred stock - Series C                              5,957                7,757
                                                                           ------------------    -----------------
                                                                                       25,899               27,699
              AFC Subordinated Money Market Certificates                               22,773               19,190
              AFC Subordinated Debentures                                               1,830                1,980
         Bond Fund:
              BGI Government/Corporate Bond Index Fund                                  2,910                2,085
         Collective Cash Investment Funds                                               2,328                2,558
         Loans to participants                                                          1,144                1,078
                                                                           ------------------    -----------------

         TOTAL INVESTMENTS AT FAIR VALUE                                   $          127,193    $         109,688
                                                                           ==================    =================
</TABLE>

         During 1998 and 1997, the Plan's  interest in common  collective  trust
         funds  (including  gains and losses on investments  bought and sold, as
         well as held during the year)  increased  in value for the fiscal years
         ended June 30 as follows:
<TABLE>
<CAPTION>

              NET INCREASE IN INTEREST IN COMMON                                   1998                  1997
                                                                           ------------------    -----------------
              COLLECTIVE TRUST FUNDS:
              <S>                                                          <C>                   <C>

              BGI U.S. Equity Market Fund                                  $           15,635    $          13,138
              BGI Government/Corporate Bond Index Fund                                    252                  153
              Collective Cash Investment Funds                                            109                   94
                                                                           ------------------    -----------------

              Total                                                        $           15,996    $          13,385
                                                                           ==================    =================
</TABLE>



                                      F-11

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

4.       PLAN TRUSTEE
         The cash and  investments  of the Plan are held by Boston Safe  Deposit
         and Trust Company (the  "Trustee")  under a trust agreement dated April
         1, 1995.  In general,  the duties of the Trustee  include:  (1) holding
         assets and collecting income therefrom; (2) investing the assets of the
         Plan as  directed by EBPIC or the  appointed  investment  manager;  (3)
         selling or exchanging the assets of the Plan;  and (4) paying  benefits
         to  participants  in the  Plan on the  written  order  of the  Employee
         Benefit Plans Administration Committee ("EBPAC"), which is appointed by
         the Board of Directors of the Sponsor.  The investment of assets in the
         Stock  Fund,  Bond Fund and Cash  Fund are  directed  by an  investment
         manager, Barclays Global Investors, N.A., San Francisco, California.

5.       PLAN TERMINATION
         The Sponsor may amend or terminate  the Plan.  Although the Sponsor has
         not  expressed any intent to do so, in the event the Plan is terminated
         or employer  contributions are  discontinued,  all of the assets of the
         Plan shall be used for the benefit of  participants  and  beneficiaries
         under the Plan.

6.       FEDERAL INCOME TAX STATUS
         A favorable  determination letter dated December 5, 1995, was issued by
         the IRS on  behalf of the Plan  which  stated  that the  Plan,  as then
         designed,  was in compliance  with the applicable  requirements  of the
         IRC.  The Plan has  been  amended  since  receiving  the  determination
         letter.  However,  the  plan  administrator  believes  that the Plan is
         designed  and is  currently  being  operated  in  compliance  with  the
         applicable  requirements  of the IRC.  Accordingly,  no  provision  for
         income taxes has been included in the Plan's financial statements.


                                      F-12

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

7.  ALLOCATION OF PLAN ASSETS AND LIABILITIES TO INVESTMENT PROGRAMS


                                  June 30, 1998
                                  -------------
<TABLE>
<CAPTION>
                                                                                              Non-
                                                                                           Participant
                                                   Participant-Directed                     Directed
                         ----------------------------------------------------------------  ------------  
                                        Company                                             Company
                            Stock      Security       Bond          Cash       Loans to     Security
   ASSETS                   Fund         Fund         Fund          Fund     Participants    Fund           Total
   ------                -----------  -----------  -----------  -----------  ------------  ------------   ------------
<S>                      <C>          <C>          <C>          <C>          <C>           <C>            <C>
Investments              $    70,726  $    35,542  $    2,912   $     1,714  $     1,148   $     15,151   $    127,193

Accrued income                     2        1,386                                                   594          1,982

Contributions
  receivable, employer                                                                              903            903
                         -----------  -----------  -----------  -----------  ------------  ------------   ------------

NET ASSETS
AVAILABLE
FOR BENEFITS             $    70,728  $    36,928  $    2,912   $     1,714  $     1,148   $     16,648   $    130,078
                         ===========  ===========  ===========  ===========  ============  ============   ============
</TABLE>

<TABLE>
<CAPTION>
                                                     June 30, 1997
                                                     -------------
                                                                                              Non-
                                                                                           Participant
                                                   Participant-Directed                     Directed
                         ----------------------------------------------------------------  ------------
                                        Company                                             Company
                            Stock      Security       Bond          Cash       Loans to     Security
   ASSETS                   Fund         Fund         Fund          Fund     Participants    Fund             Total
   ------                -----------  -----------  -----------  -----------  ------------  ------------  ------------
<S>                      <C>          <C>          <C>          <C>          <C>           <C>           <C>
Investments              $    55,443  $    34,908  $     2,095  $     1,991  $     1,079   $     14,172  $    109,688

Accrued income                     1        1,339                                                   547         1,887

Contributions
 receivable, employer                                                                               822           822
                         -----------  -----------  -----------  -----------  -----------   ------------  ------------

NET ASSETS
AVAILABLE
FOR BENEFITS             $    55,444  $    36,247  $    2,095   $     1,991  $    1,079    $     15,541  $    112,397
                         ===========  ===========  ===========  ===========  ===========   ============  ============

</TABLE>


                                      F-13

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

8.  ALLOCATION OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS TO
       INVESTMENT PROGRAMS

                        For the Year Ended June 30, 1998
                        --------------------------------
<TABLE>
<CAPTION>
                                                                                              Non-
                                                                                           Participant
                                                   Participant-Directed                     Directed
                          ---------------------------------------------------------------  -----------
                                        Company                                              Company
                            Stock      Security       Bond          Cash       Loans to      Security
                            Fund         Fund         Fund          Fund     Participants     Fund             Total
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------
<S>                       <C>          <C>          <C>         <C>          <C>           <C>              <C>
Net increase of interest
   in collective
     investment funds     $   15,635                $     252   $      109                                  $   15,996
Interest income                        $    1,369                            $       101   $       587           2,057
Dividend income                             1,422                                                  610           2,032
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------
                              15,635        2,791         252          109           101         1,197          20,085
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------
Contributions:
   Participants                3,769        1,941         285          136                                       6,131
   Agway, Inc.                                                                                   1,349           1,349
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------
                               3,769        1,941         285          136                       1,349           7,480
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------

     Total additions          19,404        4,732         537          245           101         2,546          27,565
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------

Deductions
   Benefit payments
     to participants           4,858        2,995         171          198            87         1,284           9,593
   Administrative
     expenses                    153           89           6            5                          38             291
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------

     Total deductions          5,011        3,084         177          203            87         1,322           9,884
                          ----------   ----------   ---------   ----------   ------------  ------------     ----------

Net increase (decrease)
   before interfund
     transfers                14,393        1,648         360           42            14         1,224          17,681

Transfers (from) to
   other funds                   891         (967)        457         (319)           55          (117)              0

Net assets available
   for benefits,
     beginning of year        55,444       36,247       2,095        1,991         1,079        15,541         112,397
                          ----------   ----------   ---------   ----------   ------------  -----------      ----------

     Net assets
        available for
          benefits,
          end of year     $   70,728   $   36,928   $   2,912   $    1,714   $     1,148   $    16,648      $  130,078
                          ==========   ==========   =========   ==========   ============  ===========      ==========

</TABLE>

                                      F-14

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN

                          NOTES TO FINANCIAL STATEMENTS
                                   -----------

                             (Thousands of Dollars)

8.  ALLOCATION  OF  CHANGES  IN  NET  ASSETS  AVAILABLE  FOR  BENEFITS  TO
      INVESTMENT PROGRAMS

                        For the Year Ended June 30, 1997
                        --------------------------------
<TABLE>
<CAPTION>
                                                                                               Non-
                                                                                            Participant
                                                   Participant-Directed                      Directed
                          ----------------------------------------------------------------  -----------
                                        Company                                              Company
                             Stock      Security       Bond          Cash       Loans to      Security
                             Fund         Fund         Fund          Fund     Participants     Fund          Total
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------
<S>                       <C>          <C>         <C>           <C>          <C>           <C>           <C>
Net increase of interest  
   in collective
     investment funds     $   13,138               $      153    $       94                               $    13,385
Interest income                        $   1,197                              $        96   $      489          1,782
Dividend income                            1,556                                                   635          2,191
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------
                              13,138       2,753          153            94            96        1,124         17,358
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------
Contributions:
   Participants                3,051       2,019          262           181                                     5,513
   Agway, Inc.                                                                                   1,233          1,233
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------
                               3,051       2,019          262           181                      1,233          6,746
                          -----------  ----------  -----------   -----------  ------------  ------------  -----------

     Total additions          16,189       4,772          415           275            96        2,357         24,104
                          -----------  ----------  -----------   -----------  ------------  ------------  -----------

Deductions
   Benefit payments
     to participants           5,281       4,327          304           516           194        1,768         12,390
   Administrative
     expenses                    132          97            6             4                         39            278
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------

     Total deductions          5,413       4,424          310           520           194        1,807         12,668
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------

Net increase (decrease)
   before interfund
     transfers                10,776         348          105          (245)          (98)         550         11,436

Transfers (from) to
   other funds                  (429)       (193)        (122)          887           (45)         (98)             0

Net assets available
   for benefits,
     beginning of year        45,097      36,092        2,112         1,349         1,222       15,089        100,961
                          -----------  ----------  -----------   -----------  ------------  -----------   -----------

     Net assets
       available for
         benefits, end
           of year        $    55,444  $  36,247   $    2,095    $    1,991   $     1,079   $   15,541    $   112,397
                          ===========  ==========  ===========   ===========  ============  ===========   ============

</TABLE>

                                      F-15

<PAGE>



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
     ITEM 27a of Form 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
                               as of June 30, 1998
                             (Thousands of Dollars)
<TABLE>
<CAPTION>
               Col. A                               Col. B                   Col. C                  Col. D
               ------                               ------                   ------                  -------
                                                Balance Held at
                                                Close of Period
                                               (Number of Shares                                   Market Value
           Name of Issuer                      or Principal Amount          Cost of              of Each Item at
         and Title of Issue                    of Bonds and Notes)          Each Item            Close of Period
----------------------------------             -------------------        -------------          ---------------
<S>                                            <C>                        <C>                    <C>
Stock Fund:
   BGI U.S. Equity Market Fund                         1,378,997          $      32,129          $        70,309
   BGI Money Market Fund                                      23
   TBC Inc. Pooled Employee Funds              $             417                    417                      417
                                                                          -------------          ---------------
         Total Stock Fund                                                        32,546                   70,726
Company Security Fund:
   Agway, Inc.:
     8% cumulative preferred
       stock - Series B                                 199,420                  19,942                   19,942
     7% cumulative preferred
       stock - Series C                                  59,570                   5,957                    5,957
    Agway Financial Corporation:
     8-1/2% subordinated money
       market certificates,
       due October 31, 1998                    $            839                     839                      839
     8% subordinated money
       market certificates,
       due October 31, 1998                    $          5,841                   5,841                    5,841
     8% subordinated debentures,
       due July 1, 1999                        $          1,130                   1,130                    1,130
     7-1/2% subordinated money
       market certificates,
       due October 31, 1999                    $          1,383                   1,383                    1,383
     9% subordinated money
       market certificates,
       due October 31, 2000                    $          2,961                   2,961                    2,961
     8% subordinated money
       market certificates,
       due October 31, 2002                    $          2,084                   2,084                    2,084
     7-1/2% subordinated money
       market certificates,
       due October 31, 2002                    $          1,793                   1,793                    1,793
     8-1/2% subordinated money
       market certificates,
       due October 31, 2001                    $          3,345                   3,345                    3,345
     7-1/2% subordinated debentures,
       due July 1, 2003                        $            700                     700                      700
     8-1/2% subordinated money
       market certificates,
       due October 31, 2003                    $          2,930                   2,930                    2,930
     8% subordinated money
       market certificates,
       due October 31, 2005                    $          1,597                   1,597                    1,597
                                                                           -------------          --------------      
         Total Company securities                                                50,502                   50,502
     TBC Inc. Pooled Employee Funds            $            191                     191                      191
                                                                           -------------          --------------
         Total Company Security Fund                                             50,693                   50,693
</TABLE>
                                      

                                     S-1.1

<PAGE>



                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
               ITEM 27a of Form 5500 - SCHEDULE OF ASSETS HELD FOR
                         INVESTMENT PURPOSES, Continued
                               as of June 30, 1998
                             (Thousands of Dollars)
<TABLE>
<CAPTION>

         Col. A                                Col. B                     Col. C                    Col. D
                                           Balance Held at
                                           Close of Period
                                          (Number of Shares                                       Market Value
         Name of Issuer                   or Principal Amount            Cost of                 of Each Item at
         and Title of Issue               of Bonds and Notes)            Each Item               Close of Period
--------------------------------          --------------------         ----------------         -----------------
<S>                                            <C>                     <C>                      <C>     
Bond Fund
   BGI Government/Corporate
     Bond Index Fund                                   198,905         $          2,494         $          2,910
   BGI Money Market Fund                       $             2                        2                        2
                                                                       ----------------         -----------------
       Total Bond Fund                                                            2,496                    2,912


Cash Fund:
   BGI Money Market Fund                       $         1,714                    1,714                    1,714
                                                                       ----------------         -----------------
       Total Cash Fund                                                            1,714                    1,714

Loans to Participants:
   Participant Notes                           $         1,144                    1,144                    1,144
   TBC Inc. Pooled Employee Funds              $             4                        4                        4
                                                                       ----------------         -----------------
       Total Loan Fund                                                            1,148                    1,148

       TOTAL INVESTMENTS                                               $         88,597         $        127,193
                                                                       ================         =================
</TABLE>







                                      S-1.2

<PAGE>


                  AGWAY, INC. EMPLOYEES' THRIFT INVESTMENT PLAN
           ITEM 27d of Form 5500 - SCHEDULE OF REPORTABLE TRANSACTIONS
                        for the year ended June 30, 1998
                             (Thousands of Dollars)

<TABLE>
<CAPTION>
                                                                                    Current Value
                                                                                    of Investment
                                                   Purchase           Selling       on Transaction        Net
                                                     Price             Price            Date           Gain(Loss)
                                                --------------      ------------    --------------     ----------
SINGLE SECURITY TRANSACTIONS IN
EXCESS OF 5% OF MARKET VALUE
<S>                                             <C>                 <C>             <C>                <C> 
7% cumulative preferred stock -
     Series C                                   $       6,550                       $       6,550      $       0

7% cumulative preferred stock -
     Series C                                                       $     7,300             7,300              0
7% cumulative preferred stock -
     Series C                                           6,050                               6,050              0

7% cumulative preferred stock -
     Series C                                                             6,550             6,550              0

SERIES OF SECURITY TRANSACTIONS
IN EXCESS OF 5% OF MARKET VALUE

The Boston Company Inc. Pooled
     Employee Funds                                    24,625                              24,625              0

The Boston Company Inc. Pooled
     Employee Funds                                                      24,581            24,581              0

7% cumulative preferred stock -
     Series C                                          12,600                              12,600              0

7% cumulative preferred stock -
     Series C                                                            14,400            14,400              0
</TABLE>





                                      S-2.1