Uncle Sam is extending his helping hand to farmers, and it's filled with more than $2 billion in cash.

About $400 million will be available this spring for farmers to buy crop insurance. The remainder will go to farmers with recent crop losses from causes such as flood and disease.

The actual number was still being debated at the end of last year, but the funds should mean a 25-35% price discount on crop insurance. With the government already picking up about half the total costs of crop insurance, it looks like a deal that's too good for farmers to pass up.

That doesn't mean they won't.

"I think this legislation will separate the farmers who run their operation as a business and those who don't," says Gene Gantz, Rain and Hail L.L.C., West Des Moines, IA. "I think there will be a temptation to take the discount and cut costs rather than keep their premiums about the same and take the additional bonus coverage. The ones who aren't business oriented will have the greatest struggle. And they won't have much time to decide what option to choose."

And some farmers won't buy any crop insurance.

How farmers react to the crop insurance subsidy may affect future policy decisions, Gantz believes.

"I think this legislation could be a stepping-stone to crop insurance reform in 2000," he says. "Congress is looking to see what farmers will do. If farmers use the additional funds to reduce costs rather than upgrade their insurance, it may send a strong signal to Washington that future subsidies won't help farmers protect themselves any better than without it. That could jeopardize future subsidies."

Premium subsidies are just part of the crop insurance benefits farmers will receive from the $2.375 billion emergency farm aid legislation.

Under the legislation, farmers are eligible to recoup either single-year losses in 1998 or multiyear losses in any three or more years during the five-year period from 1994 through 1998. All crops, insured and uninsured, are eligible for the single-year, 1998, payments. Only insured crops and non-insurable crops qualify for the multiyear provisions of the legislation. It's likely that some deadlines that have already passed will be extended so more farmers can be included.

"It's an attempt by the government to be as fair to as many farmers as it can be and reach as many as it can," says Tim Hoffmann, director of the Risk Management Agency's Product Development Division. "Farmers who have used crop insurance will benefit more than those who haven't. Congress didn't want to allow farmers who could have been insured, but weren't, to be treated as good as or better than those who took advantage of the risk management tools."

Farmer benefits have two limits: $80,000 each for insurance premium benefits and previous crop losses. Theoretically, some farmers could receive $160,000, says Hoffmann. But, he points out, very few farms would qualify for $80,000 in crop insurance premium subsidies.

Your insurance agent is your best source for the final details of the program.

"You won't have much time to make your decisions, so the sooner you contact an agent, the better off you're going to be," Gantz says. "They're going to be swamped."