California farmers, unhappy with new restrictions imposed by Congress, have persuaded the Department of the Interior to join their fight to retain access to unlimited amounts of cheap federal irrigation water.

The department's Bureau of Reclamation, which oversees the irrigation program in the West, has asked the Office of Management and Budget to approve a proposal to repeal a section of the new law that raises water rates.

The bureau, according to Hal Furman, an aide to Commissioner Robert N. Broadbent, made the proposal to the OMB despite an Interior solicitor's legal opinion holding the farmers' complaints groundless.

Unless the administration can persuade Congress to reverse itself, the tougher payment requirements will go into effect as part of regulations the bureau plans to have in force by the end of the year. As a result, farmers would pay millions more for their federal water.

The proposal is certain to kick up a new storm over western farmers' water subsidies, which Congress tightened last year--with administration backing--when it rewrote the Reclamation Act of 1902.

Rep. George Miller (D-Calif.), a leader of the years-long effort to limit the water subsidies, reacted angrily to reports that the Bureau of Reclamation is seeking to change the law.

"Any idea of repeal is absolutely contrary to the intent of Congress," Miller said. "The bureau ought not to get in bed with those people, but they've convinced this administration to do their bidding. You can't separate partisan and presidential politics from water in California, but they're swimming upstream on this one . . . .

"They won't find a warm reception in Congress to this idea, on the heels of the administration's payment-in-kind PIK giving grain to farmers," Miller added. "And farmers having economic troubles elsewhere aren't going to go along with another subsidy idea like this one."

Coincidentally, Secretary of Agriculture John R. Block, on a tour of California farming, is scheduled to have lunch with farmers Wednesday in Arvin at the headquarters of one of the irrigation groups that pressured Interior to seek the change.

The argument centers on a provision added last fall in the waning hours of a House-Senate conference that worked out a rewrite of the 1902 reclamation law, which limited to 160 acres the amount of land on which a farmer could receive subsidized federal irrigation water. The 1982 measure, on which farmers lobbied intensely, increases the limit to 960 acres but raises the charges.

The provision in question, offered by Sen. James A. McClure (R-Idaho), held that farmers who insisted that they were legally entitled to continue paying the old rates on their 160-acre tracts will have to pay the new, higher rates for water on any land leased beyond 160 acres.

The McClure language, eventually signed into law, gave the irrigators a 4 1/2-year grace period in which to dispose of their leased land if they decided not to pay the new rates.

But now farmers in at least three California water districts, the Arvin-Edison district near Bakersfield, the San Luis district at Los Banos and Friant-Kern at Visalia, are arguing that contracts on land they lease beyond the old 160-acre limit also entitle them to water at the old rates.

Bakersfield attorney Cameron Paulden, representing the Arvin and San Luis districts, said the Californians are arguing that Congress wrongfully has voided their legal contracts with the United States. The new law, he said, means the farmers would be charged more for the same service.

"I've written an opinion myself which suggests that those who opine there is no constitutional issue are misinformed, because contracts are contracts to which the federal government is a party," Paulden said.

He said that farmers in the Arvin and San Luis districts could be required to pay as much as $3 million extra for the water they now receive on leased properties.

Interior's Furman said that the bureau has asked the OMB for "expeditious review" of the repeal proposal. He also said that the bureau "would hope" that the solicitor will reconsider the earlier opinion finding tht the irrigators' contract rights had not been abrogated by last year's congressional action.

Furman complained that the contract language had been adopted by Congress without hearings and without Interior participation. "It means that contracts entered into would be broken . . . . We have a hard time buying into that concept."

Miller, however, noted that the 1902 law did not authorize the leasing practices that have flourished throughout the West because the act wasn't enforced.

"With our rewrite of the law, we said we would raise the limit from 160 acres to 960, but that we were not going to subsidize those very few people who were above the limit," Miller said. "These people who are complaining now own 160 acres, and they lease a lot more. They would end up with maximum land and maximum subsidy and that was not intended by Congress.

"It was very clear: in exchange for raising the ceiling, all those who were above that would have to pay the full price of water. Now Interior comes along and tries to help those who have historically thumbed their noses at the law and tries to maximize the subsidy they get . . . . They've got troubles like they've never seen before," he added.