Crop insurance is one of the major financial supports for growers but there are complaints it costs too much and its benefits are too skimpy. A beefed-up programme might shelter growers from low prices as well as calamitous plunges in yields.

Livestock could be covered for the first time as well. A new inspector general's report says the government underwrote too much of the programme's costs, so there was little incentive for insurers to prevent abuse or hold down costs. It recommended assigning more risk to insurers or looking at options like having the agriculture department take over sales.

Last year,farmers bought 1.2 million crop policies for $27.9 billion in coverage on 181.6 million acres. The report will be subject of a Senate agriculture committee hearing. Its chairman, Richard Lugar, was a prominent skeptic of a vast cash infusion into the programme.

Lugar said the report "raises serious questions about the structure and management of federal crop insurance." Lawmakers must decide whether to improve the system or try a different approach to farm risk management, he said. Leaders of the house agriculture committee said this week it was an open question whether the government should take control of all or part of crop insurance "delivery."

Private insurers now are in charge of all sales. The chairman Larry Combest, Texas Republican, said he envisioned "a very aggressive role for carriers." But, given the "huge taxpayer dollars" that could be involved in an expanded programme, Combest said, there would have to be strong federal activity as well.

"How that shakes out, I haven't decided," he said."How we deliver it remains to be seen." Texas representative Charles Stenholm, the Democratic leader on the committee, told agricultural lobbyists on last Tuesday, "We need to start out with a blank sheet of paper." He referred to the issues raised by the inspector general's report and said it was important "to separate income support from insurance" in deciding the role of the programme.

Congress has approved a budget blueprint with an additional $6 billion for agriculture in fiscal 2001-04, presumably for crop insurance, but no new money for fiscal 2000, which opens October 1. The Clinton administration, which has proposed a doubling in crop insurance spending, was cool to the inspector general's report. Ken Ackerman, who oversees crop insurance, said on last Monday it was premature to think about taking over sales considering the government renegotiated an agreement with insurers in 1997 to require them to carry more risk.

"The risk for participating companies is real," Ackerman said. "The step wastaken. We now have only one year of experience..." Agriculture secretary Dan Glickman said, "We have to do our best to improve the crop insurance delivery system" and boost participation rates. Senate democratic leader Tom Daschle, of South Dakota, told the National Association of Agricultural journalists that in his view, crop insurance reform ranked as "a close second" to higher crop supports. "I'm not sure they are mutually exclusive," he said.

A trade group representing crop insurers said the inspector general's report was "grossly misleading" about the risk of losses for its members. Under the risk-sharing formula now in place, it said, insurers would have lost more than $450 million during the 1988 drought, the worst early-season drought to hit US agriculture.