Bush will veto U.S. farm bill: USDA chief

WASHINGTON (Reuters) - U.S. Department of Agriculture Secretary Ed Schafer said on Thursday that President George W. Bush will veto the farm bill agreement reached by law makers in Congress this week.

"They have failed to present the administration with a good farm bill," Schafer told reporters. "The president will veto this bill."

The administration said the farm bill was too costly and failed to deliver the reforms that the administration was seeking.

House and Senate negotiators agreed on a $285 billion farm bill on Wednesday that puts more money into public feeding programs and denies one crop subsidy program to the wealthiest Americans.

The compromise bill could be sent to the White House by the middle of next week, seven months overdue.

Ethanol incentives would be revised under the bill to encourage development of renewable fuels from cellulose, found in grasses, trees and crop residue. The tax credit for corn-based ethanol would be cut by 12 percent and a cellulosic ethanol credit of a dollar would be created.

Senior negotiators said they moved toward the White House position on crop subsidy limits during their final meeting. A wide gap remains.

(Reporting by Christopher Doering; Editing by Christian Wiessner)