The Minnesota River flows through one of the world's most intensely farmed watersheds, which is why it looks so much like chocolate milk. Here in the black-dirt county that inspired "Little House on the Prairie," corn and soybean fields stretch from the horizon to the riverbanks, and the rains wash grimy and toxic muck straight into the Minnesota. The local joke is that it's so well fertilized, it ought to be a golf course.

Environmentalists blame some of the pollution on a related source: The 60-year-old federal crop insurance program. They say its heavy subsidies encourage farming on millions of acres of America's most flood-prone land, by reimbursing crop losses when rivers overflow. They complain that Mother Nature is sending a message, wiping out some riverside harvests almost every year, but that the program undercuts that message through perverse incentives to farm.

And green groups are not the only critics of crop insurance. The Agriculture Department's watchdog says the program is riddled with waste and abuse, funneling windfall profits to insurers and taking unacceptable risks for the government. The program's own director concedes it underserves small family farmers. Economists say it has promoted overproduction, which has helped drive down commodities prices, devastating farmers. And taxpayer activists wonder why Congress has approved the costliest emergency farm packages in history two years in a row, when crop insurance was supposed to make disaster aid a relic of the past.

So it should be no surprise that Congress is working on major crop insurance reforms. The surprise is that the reforms would expand the subsidies, doubling the annual federal commitment to $3 billion. And much of the new money would target "multiple-loss" areas where farming is riskiest, such as the land along the sludgy Minnesota.

Still, the plan passed the House without a single dissenting vote; only the stubborn opposition of Senate Agriculture Chairman Richard G. Lugar (R-Ind.) has kept it from becoming law this year, and even he agreed under heavy pressure last week to hold hearings on the issue in March. With prices in a deep swoon and rural America facing a genuine crisis, there is bipartisan support these days for just about any effort to boost farm incomes.

"I know farmers are hurting, but there comes a point where we have to say: What on Earth are we doing?" said Lugar, who farms 600 acres of corn and soybeans in Indiana. "Why should we offer incentives for people to work marginal land? It doesn't make sense."

On Capitol Hill, though, Lugar is fighting a lonely battle. Most congressmen see crop insurance as the best way to help farmers manage the inevitable risks of their business, to help them survive natural disasters. They say that Lugar--who has never lost money in 43 years of farming, and recently bought crop insurance for the first time, simply to see how it works--has a skewed view of his own industry. And for all the gripes about crop insurance, almost everyone agrees it makes more sense than helter-skelter disaster bills such as the giant $8.7 billion package approved last month.

"Look, I'd prefer not to do crop insurance in addition to disaster aid. I'd like to do it instead of disaster aid," said Sen. Bob Kerrey (D-Neb.), co-sponsor of the main Senate bill to expand crop insurance subsidies. "When it comes to disaster aid, even taxpayers in Nebraska are saying enough is enough. But we still need some way to help farmers survive bad times."

Crop insurance began in 1938 as a modest government response to the very worst of times in farm country: the Great Depression and the Dust Bowl. The basic goals of the program have not changed: to help farmers buy coverage that will pay off when weather ruins their harvests.

In 1994, after passing eight consecutive ad hoc disaster bills, Congress enacted the sweeping Crop Insurance Reform Act, an effort to make the program so attractive that there would never be another demand for emergency aid. The reforms expanded the program from just a few major crops to more than 70, dramatically increased federal subsidies to help farmers afford the premiums, and turned the program over to private insurers--although the government still pays all their administrative costs and shares much of their underwriting risk.

The government now shoulders about half the cost of premiums, and coverage has doubled to about two-thirds of the nation's farmland. But last year, when farm prices weakened, so did congressional resolve--"We lost our discipline," Kerrey concedes--and the era of disaster aid returned, to the tune of $6 billion. And after this year's record $8.7 billion package, Congress is already preparing to do a supplemental disaster bill next year.

The problem, supporters say, is that crop insurance still does not go far enough. It does not cover livestock, or many "specialty crops" such as fruits and vegetables. It has not caught on along the East Coast, which suffered heavy drought losses this year. And most policies have a 35 percent deductible, so even insured farmers are often unhappy with their reimbursements, especially in perennially hard-hit areas such as Texas and the Great Plains. The bills in the House--sponsored by Agriculture Committee Chairman Larry Combest (R-Tex.) and Rep. Charles W. Stenholm (Tex.), the committee's ranking Democrat--and the Senate--sponsored by Sen. Pat Roberts (R-Kan.) and Kerrey--aim to fix those problems, to reach out to every eligible farmer.

"Crop insurance has not worked very well for people who have suffered repeated losses," Agriculture Secretary Dan Glickman said in an interview. "In areas that haven't gotten hit again and again, it's worked quite nicely, but we need to make it accessible for everyone."

But not everyone believes that farmers should be encouraged to keep farming, especially at a time when the landscape here is dotted with massive piles of excess harvested corn, as farmers try to wait for better prices before they go to market. And if overproduction has a bad effect on prices, it can have an even worse effect on the environment, especially in flood plains where soil erosion, pesticides and fertilizers from fields damage rivers.

Of course, the Republican farm overhaul of 1996 was supposed to shift American agriculture from a government-guaranteed system to a market-oriented system, to treat farmers like any other businessmen subject to the vagaries of supply and demand. But critics say crop insurance looks a lot like the old federal programs--or, for that matter, the recent disaster packages--offering handouts to farmers to prevent them from failing.

"You can't really call it insurance when the government practically gives it away, and now these bills would make it even cheaper," said Environmental Defense Fund attorney Tim Searchinger. "They would use taxpayer money to wipe out habitats the size of Virginia."

Here in the Minnesota River basin, where more than 95 percent of the original wetlands have been drained and more than 90 percent of the land is tilled, state officials are especially irate about crop insurance. For one thing, they say, it contradicts another federal initiative, the Conservation Reserve Program, which is supposed to help them buy up 100,000 acres of environmentally sensitive farmland to restore wetlands.

"People say, shoot, I can get my insurance for almost nothing, I might as well farm every square inch I've got," said Kevin Lines of the Minnesota Department of Natural Resources. "We want to get some of that land out of production forever. It's amazing how habitats come back when you stop farming them."

Jackie Simmons and her husband used to collect crop insurance payments for their corn and soybean farm after almost every annual flood of the Minnesota; they used to joke that they only needed to harvest one crop out of three to break even. But after her husband died, Simmons sold 200 riverside acres to the state through the CRP. Now prairie grasses, willows and cottonwoods have blanketed the land, and wild turkeys and pheasant have returned.

"We never should have farmed that land in the first place; it was bad for the river, and bad for the wildlife," said Simmons, 55, a third-generation farmer whose children work non-farm jobs in the Twin Cities. "I don't know why the government makes it so attractive."

But with corn selling for only $1.50 a bushel, many farmers around Minnesota say they're just one uncompensated flood away from utter ruin. They say they have no choice but to till every acre; when prices are low, as the saying goes, you make up for it with volume. And crop insurance provides at least some security in a high-risk, low-profit business.

"We're all borrowed to the hilt," said Carl Lingbeek, who farms 250 acres of corn and soybeans. "We can't survive a failure."

In the past, crop insurance has often been defined by its own failures; a scathing report this April detailed a case where an agent made $284,000 in commissions by selling policies to his boss, a tomato grower, who then reaped $2.4 million in questionable insurance payments. But officials say they are slashing payments to insurers, cracking down on abuses, improving security for farmers. And on Capitol Hill, everyone wants to improve security for farmers.

"You know, farmers go forward in baby steps, and backwards in leaps and bounds," said Rep. Earl Pomeroy (D-N.D.), a former state insurance commissioner. "They need protection, and if they can't afford it, we need to make it affordable. They can't make it on their own."