In a letter delivered to the House Agriculture Committee on Thursday, Budget Director Mitch 

Daniels said rising prices for some commodities are improving the prospects for many farmers and ranchers.

Daniels said he would recommend that President Bush not sign a bill providing more than $5.5 billion in additional assistance for this years crops.

Congress has provided $25 billion in special payments to farmers over the past three years to supplement federal subsidy programs, and farm groups have asked for as much as $10 billion more this year.

This springs congressional budget agreement set aside $5.5 billion for farmers that must be spent by Sept. 30, but the House committee also plans to dip into money earmarked for the 2002 budget year, which begins Oct. 1, said Keith Williams, a spokesman for the Republican-controlled panel.

The committees top Democrat, Texas Rep. Charles Stenholm, agrees with the White House that $5.5 billion should be the limit. Spending more than that will take away money that lawmakers need for revisions next year in permanent farm programs, he said.

It is very important for us to enforce the budget that was passed, Stenholm said.

The bulk of this years special assistance is expected to go to grain and cotton farmers to supplement the annual market transition payments they receive under an existing program, but lawmakers also are pushing for help for a variety of other commodities, including soybeans, sugar and fruit.

Daniels noted in his letter that last years aid package included money for several commodities not traditionally supported by government commodity programs, including honey, cranberries and apples.

Congress started passing the annual bailouts in 1998 after sluggish exports and bumper crops led to a collapse in prices for a wide array of commodities. Corn and soybean prices remain low this year, but prices for cattle, hogs and milk have rebounded, and the government also is expecting some improvement for wheat growers.

The Agriculture Department last month revised its estimate of net farm income for 2001 to $42.4 billion, up $1.1 billion from its January forecast, because of the higher livestock prices. Farmers made $45.2 billion in 2000, but that total included the supplemental assistance provided by Congress that year.

Farm groups say many producers cant survive financially without another large bailout this year. Production expenses, which include the cost of fuel and fertilizer, are expected to rise $3.6 billion this year, or 1.8 percent. Fertilizer costs are up 17 percent because of higher prices for natural gas, a key component of fertilizer, while fuel expenses are up 7 percent.

The House committee was scheduled to draft its aid bill on Thursday but postponed action until next week so lawmakers could evaluate a USDA budget bill approved by the House Appropriations Committee on Wednesday, Williams said. The committee added to the bill $150 million in payments for apple growers.

The postponement was unrelated to the White House letter, Williams said.