OXFORD, PA. -- The fate of the Chesapeake Bay rests uncertainly in the hands of farmers like Martin Greenleaf, of Lancaster County, an area that makes more cash from its crops than any other in the Northeast in part because of the heavy use of pesticides and fertilizer.

The bay has no shoreline in this county that borders Maryland about 100 miles northeast of Washington. But the small, nameless creek on Greenleaf's land and the ground water beneath his farm flow to the Susquehanna River, then the Chesapeake, linked as the human body's arteries and veins are connected to its heart.

Although development is seen as the biggest threat to the region's richest natural resource, much also depends on whether farmers like Greenleaf can be persuaded to use less chemical fertilizer, apply fewer pesticides and prevent their soil and animal manure from running into creeks and rivers that often are far from the bay.

Greenleaf is doing his part; many others are not. He has spent $15,000, and thousands more in government cost-sharing money, in attempts to reduce pollution coming from his 1,000 acres.

He planted strips of grass to filter fertilizer and pesticide runoff during rainstorms, contoured the soil of his corn and soybean fields to reduce erosion and installed a fence across a stream to keep his cattle from trampling the bank into mud and leaving manure behind to wash downstream.

"I live near a stream that does empty into the bay," Greenleaf said. "There's a good possibility that fertilizer runoff from here could end up in the bay."

Whether the Chesapeake Bay becomes a polluted waterway or recovers its health no longer depends so much as it once did on controlling the chemicals dumped by factories or the sewage spewed by cities and towns. Regulation of industry and sewage treatment plant discharges has tightened --

although not enough, critics say -- since a 1983 federal report on the bay's problems galvanized the current cleanup effort.

Agriculture is the bay's largest source of runoff pollution that has not been brought under control, environmental officials say, and for that reason it is getting new attention from regulators and environmentalists.

Agricultural fertilizer and manure put thousands of pounds of nitrogen and phosphorus into the bay, helping fuel explosive growth of algae that chokes the growth of fish and underwater plants, according to many studies. Topsoil fills streams that are spawning grounds for delicate bay species. Agricultural pesticides have been found in well water and, to a lesser degree, in the bay.

Farm pollution, combined with urban contamination such as auto exhaust and lawn fertilizer runoff, natural forces such as heavy rains that carry more pollution, and excessive fishing, have depleted the bay's population of rockfish, oysters, shad, plants, ducks, bald eagles and other winged and water life. Its waters, once said to be so clear that the bottom was visible at a dozen feet, now are murky or strewn with trash.

With help from the U.S. Environmental Protection Agency and the Agriculture Department, Maryland, Virginia and Pennsylvania have spent nearly $60 million since 1988 for education, research and subsidies to farmers who implement runoff-reducing practices.

For the most part, state programs have been grafted onto federal efforts to curb soil erosion. But a growing number of bay experts say those steps drive pollution into ground water used for drinking supplies. Real gains, they say, will come only when farmers, who already are reducing fertilizer use, cut back even more and treat manure as a potential pollutant rather than a farm commodity.

Charles Spooner, head of the EPA's Chesapeake Bay office in Annapolis, said if he had his way, fertilizer would be treated like a prescription drug, its use strictly limited and only by official permission.

Farmers in Virginia's dairy-rich Shenandoah County have enough animal manure to fertilize their crops if they wanted to use it, but are among the state's top buyers of chemical fertilizer, state officials say. According to Pennsylvania officials, farmers in the state spend $90 million a year on fertilizer they do not need.

Nowhere in the 64,000- square-mile area of waters that drain to the bay is the drive to reduce agricultural pollution more crucial than in Pennsylvania. Half the fresh water that flows to the Chesapeake comes from the Susquehanna River, which accounts for a fifth of the phosphorus and 40 percent of the nitrogen going to the bay. Most of that comes from farm runoff, federal studies show.

For farmers, the recent emphasis on environmental goals, which often require taking fragile land out of production, is an abrupt switch from their traditional practice of wringing the highest possible yield from each acre. Greenleaf said many realize "if we pollute the water here, we're the ones who have to drink it," but said some of his neighbors let animal manure pile up in their barns, where it can leak into streams 25 feet away.

Most farmers contend they get more blame than they should and that cities get off too lightly. They point out that they do not control the prices they charge, and cannot raise them to pay for environmentally sound practices that would help cleanse the bay.

"Soviet agriculture is an example of what happens when you regulate," one farmer told a regional conference on farm runoff programs in Williamsburg earlier this year. "We cannot impose on the American farmer the type of regulation that a lot of people would like to see unless it's across the board, across the world."

"It doesn't make us money to be conservation-minded," said Greenleaf, 43, whose ancestors settled the county in colonial times. "You have to want to do it, or have the government force you to do it."

Participation in voluntary farm anti-pollution programs has been rising, but overall is less than officials had hoped. Lancaster County has signed up only 250 farms out of 5,000, typifying the problems of the voluntary effort. One result of a voluntary program, officials say, is that the worst polluters are not necessarily the ones who sign up.

"Up until now, it's largely been a matter of who walks in the door," said Paul Swartz, soil and water conservation director for Pennsylvania's Department of Environmental Resources.

Maryland farm anti-pollution program officials have sent surplus money back to the state treasury in three of the past four years, including $1.5 million in 1989, because they could not enroll enough farmers, even with the state paying 87.5 percent of the tab for conservation practices.

Maryland officials blame recent droughts for leaving farmers short of cash. The most expensive measures, such as manure storage bins, can cost more than $50,000.

State officials resist requirements, saying farmers cooperate better with voluntary programs. They question the feasibility of policing thousands of farms. Few are eager to take on the farm lobby, which opposes requirements.

Agriculture groups say farmers will do the right thing if given financial help and technical assistance. They say requirements would apply a cookie-cutter solution to a diverse problem, and would deprive farmers of use of their land without compensation.

"Most farmers' retirement funds are tied up in that land," said Spottswood Taliaferro, a Virginia farmer and Farm Bureau spokesman on conservation issues. "When they lose the ability to develop that land, you've taken away their retirement."

Some mandates already are in place: Farmers in Maryland's Critical Areas bordering waterways, and some in Virginia's Tidewater counties, will be required to prepare plans to prevent soil erosion, although critics wonder how strict enforcement will be. Recent federal farm bills impose tighter rules for those who sign up for Department of Agriculture subsidies, although their target is soil erosion, not nitrogen and phosphorus runoff.

Beyond the issue of whether a voluntary program will do the job, some question whether farm programs aim at the correct target.

Recent research on demonstration farms in Virginia and Pennsylvania found that techniques designed to reduce soil erosion -- such as contour plowing -- did decrease runoff into surface water. But it produced an unwelcome side effect: an increase in the nitrogen level in ground water, the underground network of springs and aquifers that supplies drinking water for millions of people.

High nitrate levels in drinking water can cause health problems, including "blue baby" syndrome, a potentially fatal oxygen-depriving disorder in infants. And because ground water also flows to the bay, scientists question whether steps taken to reduce surface water contamination to the Chesapeake may substitute one pollution pathway for another.

The EPA's Spooner said that research is so persuasive his agency is considering halting its financing of traditional soil-erosion practices, and concentrating instead on efforts to reduce use of fertilizer and careless disposal of manure.

Those fertilizer and manure programs, known as nutrient management, are in their infancy. Only Virginia has a fully operating program to police manure disposal on large farms, and it does not require smaller facilities to comply. Maryland and Pennsylvania have just begun to implement similar efforts.

There are even fewer controls on agricultural use of chemical fertilizer. Pennsylvania requires farmers to write a plan to reduce their use of fertilizer to receive state money for other runoff-reducing practices, but "that has basically translated into our having fewer customers," Swartz said.

"There are farmers who are putting on fertilizer like their father always did," said Gerald Heistand, an anti-pollution program official in Lancaster County. His office has only three staff members to advise thousands of farmers, "and the fertilizer people outnumber us," he said.

The stakes in success or failure are big. Reducing farm runoff is a cornerstone of the bay states' promise to cut nitrogen and phosphorus pollution 40 percent by 2000. Failure could put pressure on developed areas to pay for additional sewage treatment plant improvements, one reason urban and suburban officials are pushing for tougher farm anti-pollution programs.

State officials claim impressive gains in farm programs aimed at cleaning the bay: a 7 percent reduction in nitrogen and phosphorus over the past three years, equaling 23.6 million pounds a year of nitrogen and 4.6 million pounds of phosphorus.

Even so, the bay jurisdictions said in a recent progress report that projections indicate "further expansion will be needed to meet the 40 percent year 2000 goal."

Whether the goals for the bay will be met depends in large part on whether farmers will do their part. And that is likely to depend, in turn, on taxpayers' continued willingness to take care of the bill.

"As long as the government is paying 75 percent, I don't think anybody can quibble with the need to do it," farmer Greenleaf said. "I foresee a day when we will have to do these things."