WASHINGTON - While the federal government doesn't usually endorse products, the U.S. Department of Agriculture has struck an unusual arrangement with agribusiness giant Monsanto Co. that gives farmers in Illinois, Indiana, Iowa and Minnesota a break on federal crop insurance premiums if they plant Monsanto-brand seed corn this spring.

The arrangement has raised some eyebrows, particularly among organic farm groups that argue the government agency should not be promoting corn that contains an herbicide; the Monsanto brands contain chemicals that kill weeds and insects.

Monsanto's deal is legal, note USDA officials who point out that such arrangements were encouraged in a 2000 crop insurance law that Congress enthusiastically passed. The idea is to give farmers a break on their insurance premiums if they use corn seeds that are higher yield and shown to resist insects and other threats.

USDA officials said they are aware of the appearance of favoritism toward one of the nation's largest ag companies.

"We knew it would look that way," said Shirley Pugh, a spokeswoman for USDA's Risk Management Agency, which administers federal crop insurance. "But other companies can come and do the same thing. We are making the discount available because the corn has shown the traits necessary to reduce the risk..."

Ronnie Cummins, national director of the Organic Consumers Association, characterized the USDA-Monsanto BYE arrangement as one of many examples in which the department has sided with big agribusinesses instead of smaller farmers and farm groups. He said the BYE program will leave farmers with little choice but to buy Monsanto seed.

"We definitely have a problem with all the benefits that [Monsanto] gets," Cummins said. "If you really look at our crop subsidy program and what's given to farmers, you really see a lot of those subsidies going to purchase genetically engineered crops."

Cummins also said that the USDA-Monsanto arrangement excludes organic farmers...

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