The House Agriculture Committee completed work early yesterday on an urgent rescue package for the tottering Farm Credit System (FCS), but dodged the most critical issue -- how to finance the multibillion dollar bailout the system says it needs to avoid collapse this year.

Torn between budget pressures on Capitol Hill and political pressures at home, committee members wrangled for hours over FCS financing schemes that ranged from taxpayer-backed bond issues to direct federal payments.

But finally, after a 16-hour sesssion that ended at 2:15 a.m., they in effect tossed the hot potato toward the White House and congressional appropriatons committees by approving "such sums as are necessary" from unspecified sources to finance a bailout that could go as high as $6 billion.

Committee members were beset by fears that resentful urban legislators and the administration would force the bailout funds to be taken from farm support programs or that a federally guaranteed FCS bond issue would flop on Wall Street for lack of collateral in the system's treasury.

The bond issue idea was dropped after an assistant treasury secretary, Charles O. Sethness, told the committee, "You couldn't sell these bonds, so you don't have to worry about it." Sethness said a direct cash infusion was "probably preferable," but that the administration felt the FCS should spend its surplus capital before bailout money was made available.

"We are asking the FCS to borrow its way out of its problem," said Rep. Glenn English (D-Okla.), "and it is not very likely that's going to happen. ... It is going to take an infusion of capital into this system and we might as well face up to it."

English then proposed a straight $4 billion authorization for the FCS from unspecified sources. But that was rejected after Rep. Dan Glickman (D-Kan.) suggested reporting a bill without a dollar amount. "I fear any precise funding plan might get us into trouble," he said. "It won't have an amount or a funding mechanism that will be shot at for the next three weeks {during the recess}."

"There ain't nobody that's got any money and whichever way we go we're going to have to borrow," said Chairman E (Kika) de la Garza (D-Tex.), who, along with Rep. Edward R. Madigan (R-Ill.) formalized Glickman's suggestion into a motion that passed handily.

The package includes a major restructuring of the farmer-owned cooperative lending system proposed by Rep. Charles Stenholm (D-Tex.), federal guarantees for a secondary farm real estate loan market -- a step sought by commercial lenders and opposed by the White House -- and new protections and forbearance procedures for FCS and Farmers Home Administration (FmHA) borrowers.

Yesterday's 41-2 vote for final passage cleared the bill for House action early next month after the recess. The Senate Agriculture Committee has not begun action on its version of a bailout for the FCS, which holds about a third of the nation's farm debt.

The Stenholm restructuring proposal, reflecting widespread discontent among farmers over FCS management practices, stimulated almost as much emotion as the refunding issue. Stenholm maintained that without streamlining and overhaul, the FCS could not compete with other lenders.

His plan would merge the system's 13 district banks for cooperatives into one central organization and abolish its 12 regional intermediate credit and federal land banks. They would be replaced by up to six new farm credit service banks, which would be barred from setting interest rates and making loan approvals.

Instead, viable local land banks and production credit associations would take on new powers and continue as direct lenders to eligible borrowers. Capital currently held by the district banks would be relocated to the associations, a move Stenholm said would broaden local control and reinvigorate the cooperative spirit of the FCS.

The restructuring, the most drastic in the FCS' 70-year history, was debated heatedly. Most committee members agreed the system needed to be changed, but southerners urged the panel to move more slowly and to consider conducting a study. "We'll have great problems with this in our area," said Rep. Charlie Rose (D-N.C.).

"Studies have gone on for years regarding reorganization ... but we can never do it because of political considerations," Stenholm said. His move was backed by Rep. Ed Jones (D-Tenn.), chairman of the credit subcommittee, who said the plan was essential to success of the FCS.

Madigan had a last word. "We'll look like a bunch of stupid asses if we don't change it," he said. Stenholm's plan was approved 22 to 12.