The Agriculture Department, saying it fears that cheese sales are falling because some non-needy people are getting government surplus cheese free, is drafting rules to require states to impose some kind of needs test before they give the cheese away.

"There was a lot of cheese not getting into the hands of the most needy," said Robb Austin, director of public information and governmental affairs for the Food and Nutrition Service.

Austin said the USDA was developing guidelines that would probably be ready in the next 30 days. Each state would then be expected to draft rules of its own for the department's approval.

Up to now, the states have been left largely on their own in determining who should get the surplus cheese. In some cases, they have simply given it to anyone who came in and was willing to certify he was needy (without any definition being set), or to anyone whose family income was below 185 percent of the poverty line (which would work out to about $18,000 for a family of four). In many states, no mechanism was set up to check on actual income.

Experts on food distribution and welfare said some food might be diverted to people who weren't genuinely needy if tough federal rules weren't imposed, but many said it would be minimal because, as one California administrator put it, not many people are likely to go to a food center, wait in line for a long time and be willing to certify poverty in front of their neighbors if they weren't in fact genuinely needy.

Supporters of the free cheese program say they fear that if the department makes the new rules too tight and requires states and local free food distributors to set up a heavy bureaucratic apparatus to check on people's incomes it could cripple the distribution network.

Sen. Robert J. Dole (R-Kan.) and Rep. Leon E. Panetta (D-Calif.) have said that the guidelines should not impose a very detailed eligibility rule, but give the states some latitude.

Although a needs test was authorized by a Dole-Panetta bill that passed Aug. 4 and provided $50 million a year to handle and store the cheese, previously Senate Agriculture Committee Chairman Jesse Helms (R-N.C.) had criticized distribution to the non-needy, and the Agriculture Department had been concerned about the situation.

In May, the USDA imposed a lid of 25 million to 35 million pounds a month on distribution of the surplus cheese. An article in the June issue of the department's Dairy Outlook and Situation explained that sales of American cheese had been rising almost continuously "each quarter over the past two years, even throughout the recession."

But after the free distribution jumped, reaching 60 million pounds in March, commercial sales dropped almost pound for pound. "It is difficult to assign any cause for the drop in American-type sales except the free cheese distribution," the article said.