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* House could vote on measure within days
* Lawmakers cut food stamp costs without trimming rolls
* Direct payment subsidies end, replaced by risk management
By Eric Beech
WASHINGTON, Jan 27 (Reuters) - House and Senate negotiators on Monday reached a bipartisan agreement on the long-overdue U.S. farm bill that ends a pricy direct subsidy to farmers while expanding government-backed crop insurance programs, and trims spending on food stamps for poor Americans by about one percent.
"We've got a bill that makes sense, works for farmers and ranchers and consumers and families that need help, and protects our land and water and our wildlife," Debbie Stabenow, chair of the Senate Agriculture Committee, told Reuters.
The Michigan Democrat said she was optimistic that the bill would pass both chambers of Congress.
The agreement on a new five-year bill came after lawmakers spent weeks ironing out differences over food stamps, dairy price supports and other issues contained in earlier House and Senate legislation.
The bill affects about 16 million jobs in the country's agricultural sector and can have an impact on the business landscape for major agricultural companies. It is expected to save about $24 billion over 10 years, compared with current funding - less than many pundits, and especially conservative Republicans, had hoped for.
The final price tag over a decade is expected to be close to $1 trillion - too high for some lawmakers.
"I did not sign the 2014 Farm Bill conference report," tweeted Pat Roberts, the three-term Republican senator from Kansas. "I cannot march backwards and deliver more spending, more regulations and more waste."
The 949-page conference agreement will be brought up for a vote in the House of Representatives "as early as this week," according to a statement from Stabenow. The House will probably take action before its Republican leadership leaves town late on Wednesday for a policy retreat.
A vote in the Senate could come as early as next week, Stabenow said. If both chambers pass the bill, it would go to President Barack Obama for his signature.
The White House threatened last year to veto any bill that contained deep cuts, advocated by House Republicans, to the Supplemental Nutrition Assistance Program, commonly known as food stamps.
Congressional aides have said that the bipartisan agreement would include about $9 billion in cuts over a decade, about a one-percent cut, mostly by closing a loophole. That was well below the $40 billion cut advocated by the House, which would have been the largest reduction in a generation, but it was still double the amount originally supported by Senate Democrats.
Food stamp savings "are reached without removing anyone" from the program, according to a statement from the offices of the four major farm bill negotiators.
Anti-hunger groups and some Democrats, including Connecticut Rep. Rosa DeLauro, decried the cuts.
With congressional elections looming in November, Obama has highlighted social safety-net programs such as food stamps and unemployment insurance as a way to combat the widening income gap in the United States.
The massive legislation contained provisions on everything from an initiative to help beginning farmers and ranchers get a foothold in the business, to funding for research into chronic wasting disease in deer, to biofuels and organic farming.
Lawmakers attempted to take aim at duplicative programs, and were able, for example, to shrink 23 existing conservation programs into 13.
The last farm bill, which passed in 2008, expired in September after being extended for one year while negotiators ironed out differences between measures approved in the House and Senate.
Stabenow lauded the end of so-called direct payment subsidies, which for years have been doled out to farmers and landowners - to the tune of some $5 billion a year - regardless of whether or not there is a need for support, and whether or not they actually grew crops.
Instead, agricultural producers will be provided with stronger tools to manage risk. The bill also will establish permanent disaster assistance for livestock producers.
"We started at the beginning saying we were going to do away with direct payments, and save billions and instead put it into risk management to support farmers with crop insurance and disaster assistance. We've done that," Stabenow said.
The American Soybean Association, a group that lobbies for the interests of soybean growers, said the "flexible farm safety net" was a positive development for its members.
"The bill established practical risk-management programs that will protect us in difficult times," said Ray Gaesser, president of the ASA and a farmer from Corning, Iowa.
Despite last-minute lobbying from the meat industry, so-called country of origin labeling (COOL) remained in the bill. The provision requires meat to be labeled as to where animals are born, grown and processed.
COOL backers, including consumer groups and ranchers, say consumers have a right to know where their meat originates. U.S. meatpackers say the law imposes unnecessary costs on the industry and violates free trade provisions.
Retaining COOL will provide cattle producers with certainty in planning, including the U.S. Cattlemen's Association, said President Jon Wooster, a San Lucas, California, rancher.
One of the bigger hurdles in the final negotiations was government support for dairy farmers.
The legislation does not include a provision called supply management, which was championed by Representative Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee. His proposal would have required dairy farmers to cut production if prices fell below a certain level.
House Speaker John Boehner, a Republican who has ridiculed the dairy program as "Soviet-style," opposed Peterson's position and refused to bring a bill to the House floor with supply management in it.
Peterson was philosophical on Monday.
"While it's no secret that I do not support some of the final bill's provisions, I believe my reservations are outweighed by the need to provide long-term certainty for agriculture and nutrition programs," he said.
To read the entire bill, the Agricultural Act of 2014, see: here (Additional reporting by David Lawder; Writing by Ros Krasny; Editing by Sandra Maler, Peter Cooney, Jan Paschal and Ken Wills)