"If rebating is allowed under premium reduction plans, insurance providers would be forced to focus on cutting corners rather than providing quality service and better risk-management products for farmers," said Norm Nielsen, IIABA crop insurance task force chairman and president of Associated Insurance Counselors Inc. in Preston, Iowa.

Mr. Nielsen said: "This fundamental shift away from service-based competition for the crop insurance business of farmers, unheard of in the Federal Crop Insurance Program, would force insurance providers into a race to the bottom, cutting back on service for America's farmers. That is why lawmakers in 48 states have enacted laws against the practice of rebating. Their wisdom should be respected."

The provision will not take effect until July of 2006, meaning that current coverages that use the PRP system won't be affected.

Additionally, the IIABA noted that the PRP rules allowed for rebates to be offered to farmers in some states but not others, which also runs against current crop insurance regulations barring discrimination in favor of one state over another.

"The PRP proposal is a dangerous shell game under which farmers in some states stand to be short-changed in order to pay rebates elsewhere," said Patrick O'Brien, director of federal government affairs for the IIABA. "This opportunity for discrimination must not be allowed."

Mr. O'Brien added the IIABA was "very pleased" that the amendment was included in the conference report, and that "we look forward to its enactment as part of the government's fiscal-year 2006 budget."