WASHINGTON (Reuters) – U.S. corn and soybean growers will paylower rates from crop insurance in 2012 — down by an average 7percent for corn and 9 percent for soybeans, the federal overseersaid.

The U.S. Agriculture Department's Risk Management Agency saidthe lower premium rates were a result of updated methodology forsetting rates. Administrator Bill Murphy said premium rates willmore accurately reflect risks under the revisions.

The USDA pays 60 cents of each $1 in crop insurance premiums.Crop insurance subsidies were forecast for $7 billion in the fiscalyear that ended on Sept. 30.

Some 256 million acres (104 million hectares) of U.S. croplandare covered by policies, most of them "revenue" insurance thatshield producers from low prices and poor yields. Growers planted167 million acres of corn and soybeans this year.

"Our farmers have historically paid more than their fair shareof crop insurance premiums and we are pleased to see this isfinally coming to an end," said Gary Niemeyer, president of theNational Corn Growers Association.

But the Illinois Corn Growers Association said corn rates werestill too high, compared with losses. It said "over-payments haveaccrued to crop insurance companies as profit."

RMA adjusted rates as a result of a study that it commissionedfrom Sumaria Systems Inc and opened up to peer review. The agencysaid it will review further Sumaria's report and make additionaladjustments as warranted.

An industry trade group, National Crop Insurance Services, saidgrowers "should pay fair premium rates, based on sound actuarialmethods and principles" but it had questions about the newprocedures.

Fifteen insurance companies are approved by RMA to providecoverage on 2012 crops. They include John Deere Insurance Co andAgrinational Insurance Co Inc, a branch of Archer-Daniels-MidlandCo .