Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, January 15, 1994                   TAG: 9401150063
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short

IN BUSINESS

WASHINGTON - The Agriculture Department wants to offer free "catastrophic" crop insurance to farmers as part of a plan to wean Congress from freely handing out disaster payments.

Although the proposal could lower real costs to the government, it may face difficulties because the dollars spent to aid farmers would have to be figured in as part of the federal budget.

Right now, disaster payments don't count as part of the budget, on the theory they can't be predicted.

The proposal, which the administration discussed this week with members of Congress, aims at reforming the two-track system through which farmers get help when floods, hail, drought and other perils wipe out their crops.

The plan will be a key part of the 1995 budget proposal for the Agriculture Department.

The government has a crop-insurance program that is poorly used, in part because of high premiums. Less than 40 percent of eligible acres are covered, and the government has been paying out $1.40 for every $1 in premiums, the General Accounting Office says.

- Associated Press