The $168 billion bill also guarantees a steady flow of money to the grain and cotton growers that have traditionally gotten the lions share of federal subsidies.

Committee Chairman Larry Combest, R-Texas, called the legislation a major step away from the GOP-authored Freedom to Farm law of 1996 that was supposed to wean farmers from government subsidies.

He expects the legislation, which will go to the House floor this fall, to have broad, bipartisan support because of the benefits it provides to farmers nationwide. The 1996 law expires next year.

The $168 billion bill also would boost spending on conservation programs by $1.6 billion a year, an increase of 75 percent that would provide new subsidies to fruit and vegetable farms and cattle and hog producers. The money would underwrite the cost of water conservation measures, controls on manure, and other farm improvements.

Environmental groups, however, said the bill still provided too little money for conservation programs, and the legislation also is expected to be attacked on an array of fronts, including its extension of a price support program for sugar.

Most farmers, ranchers and private foresters are rejected when they seek federal help to meet our environmental challenges, and most will still be rejected if this proposal becomes law, said Scott Faber, an attorney for the activist group Environmental Defense.

The plan was crafted to maintain support from the grain and cotton growers that have traditionally dominated farm subsidies as well as to appease demands from other farm interests that are demanding a bigger share of federal subsidies.

Permanent subsidy programs for honey, wool and mohair were abolished in the 1990s but are restored under the legislation. New subsidies for peanut growers would be established at a cost of $350 million annually.

Under an amendment approved by the committee, tobacco would become eligible for a program that promotes the marketing of U.S. farm products overseas. Horse farms who have lost animals to disease would become eligible for Agriculture Department loans.

Another new program would provide payments to landowners who agree to preserve grasslands.

The legislation sets up a third form of payments for grain and cotton farmers to go with two other subsidy programs that already exist.

The proposed program, which would provide payments when prices are below a fixed target price for each crop, is similar to a program Congress abolished in 1996. The payments are designed to replace the annual bailouts that Congress has provided farmers since 1998 to compensate for a drop in commodity prices.

Additionally, payment limits on crop supports are being raised from $75,000 to $150,000 per recipient.

The sum of money here is making the whole (agricultural) sector more dependent on government than before and thats a problem, said Bruce Gardner, an agricultural economist at the University of Maryland.

But Bob Stallman, president of the American Farm Bureau Federation, the nations largest farm group, said the legislation was balanced and equitable.

Adding conservation money for fruit and vegetable farms and livestock operations was a wise move, he said.

The committees approval of the legislation was delayed until Friday because of a fight over whether to require meat, produce and farm-raised fish to be labeled with the country of origin. The proposal was eventually defeated.

Farmers who support the labels think it would curb imports, but opponents say it could spark trade wars and would be too costly for processors and grocers.

The bill is H.R.2646.