The Conservation Security Program was created by the 2002 farm subsidy law to encourage care of the 1.5 million square miles of the nation's "working" fields, ranges and woodlots. Most of the USDA's other conservation programs pay farmers to idle fragile land.

Regulations should be unveiled within weeks to launch the new conservation program, said a spokeswoman for the USDA's Natural Resources Conservation Service.

A sign-up will be held this summer so farmers and ranchers can volunteer for the program. It will start in a limited number of high-priority watersheds and rotate over an eight-year period across the country.

Ferd Hoefner of the Sustainable Agriculture Coalition, an activist group, said USDA was limiting access to a program that Congress wanted open to all producers.

"The administration is now declaring its intent to deny the country's best conservation farmers the opportunity to participate ... unless they are lucky enough to live in a selected watershed," Hoefner said. "Their exclusionary approach is at odds with the law."

With $41 million available for this fiscal year, only a small number of contracts can be written, USDA said. There are 1.8 million farms in the United States.

"Watersheds are nature's boundaries and are a good way to group together producers working on similar environmental issues," Veneman said in a statement.

Along with dividing the nation into watersheds, USDA said it would set enrollment categories to identify the worthiest projects. The categories will gauge each farm's current stewardship and willingness to adopt additional conservation practices.

Hoefner said the selection process was overly complicated because Congress placed no limits on the new conservation program after this fiscal year. The Bush administration, however, has requested $209 million for fiscal 2005 and Veneman said budget pressures may force a new spending lid.

Under USDA's criteria, the top category for cropland would go to land already using a high number of conservation practices, with an operator willing to apply two new techniques and ready to conduct on-farm research or demonstration of conservation practices.