Proposals by agriculture industry groups to create a new insurance program for farmers would lead to environmental degradation and leave taxpayers to foot the bill, anti-subsidy crusader Environmental Working Group said yesterday.

Led by the National Corn Growers Association, some big trade groups have proposed eliminating direct payments to farmers and instead creating a new revenue-based program to manage risks from weather, diseases and volatile prices. The program would give farmers money for deviations from average revenue based on a five-year timeframe.

A similar proposal by Sens. Sherrod Brown (D-Ohio), John Thune (R-S.D.), Richard Durbin (D-Ill.) and Richard Lugar (R-Ind.) would create a "shallow loss" program. Such a scheme would give farmers money to cover losses between 10 and 25 percent of their annual income.

But as congressional agriculture committee leaders put together proposals to send to the supercommittee, the Environmental Working Group is urging them to ignore such proposals.

"As an environmental organization we are really gravely concerned about the environmental degradation that could be as a result of this generous business guarantee," said Craig Cox, vice president for agriculture and natural resources at EWG. "If Congress goes down this road, they need to attach conservation requirements."

Under current federal farm policy, farmers can receive revenue insurance covering large losses without paying a premium. They can also receive crop insurance to cover crops lost due to weather.

In a report released yesterday, EWG writes that insurance costs have tripled since 2000 to $8 billion a year.

"A new revenue insurance program would be counterproductive," said Bruce Babcock, professor of economics at Iowa State University and author of the EWG study.

The agriculture committees, which are expected to release deficit-reduction recommendations that could ultimately turn into the next farm bill, are reported to be considering eliminating direct payments and putting it toward such a shallow-loss program.

"Which means," Cox said, "in order to hit their deficit reduction targets they need to cut conservation programs and nutrition programs, and that seems just indefensible to us."

But Jon Doggett, vice president of public policy at the National Corn Growers Association, said a new revenue insurance program is needed.

The association's proposals would be "more efficient, effective and simple for growers and agencies," he said. "It would cost a lot less money."

Doggett pushed for a quick resolution to the deficit-reduction debate, saying that he hoped House and Senate agriculture leaders would find a way to lock in the next farm bill into the overall deficit-reduction package.

"There needs to be finality to these discussions," Doggett said, citing a need for producers to be able to plan years in advance.

That view sharply contrasts from that of Environmental Working Group and 27 bipartisan lawmakers who sent a letter to agriculture leaders yesterday. They have charged agricultural leaders with writing a "secret" farm bill that avoids open public debate (E&ENews PM, Oct. 26).

The letter's authors, including Reps. Ron Paul (R-Texas), Ron Kind (D-Wis.), Earl Blumenauer (D-Ore.) and Henry Waxman (D-Calif.), are pushing for specific policy decisions to be left out of the Joint Select Committee on Deficit Reduction's proposal and instead debated on the House and Senate floors.

"We urge the Joint Select Committee to resist proposals that would go beyond its mandate of deficit reduction and authorize new, complicated agriculture programs that have not been the subject of Congressional review," the lawmakers wrote.