The Occupational Safety and Health Administration refused early in the Reagan administration to tighten the safety standard for a chemical that is widely used on fruits and in flour mills, even though it had two studies showing that virtually every worker exposed to legal limits of the substance for a career could expect to die of cancer.

The agency still has not acted on the chemical, ethylene dibromide (EDB), and told a congressional panel this week that it will be at least six months before its new rules are ready. Meanwhile, the chemical has been showing up in drinking water wells and in baked goods from Florida to California.

In December, 1981, OSHA chief Thorne G. Auchter rejected pleas from the Teamsters union to tighten the safety standard for EDB on an emergency basis. At the time, massive amounts of EDB were being used as a citrus fumigant to combat the Mediterranean fruit fly.

Months later, Auchter brushed aside a personal appeal from J. Donald Millar, the Reagan-appointed head of the National Institute for Occupational Safety and Health, who urged Auchter to reconsider his decision in the face of "mounting evidence" that the chemical is deadly.

In 1981, however, OSHA already had two Environmental Protection Agency studies that showed the "excess cancer deaths" that could be expected from maximum legal EDB exposure was 999 for every 1,000 workers.

Nevertheless, Auchter contended that a new emergency standard would not stand up in court because the agency did not know enough about how many workers were being exposed to the chemical or at what levels. That information now has been collected, and OSHA officials said yesterday that it supports Auchter's decision not to issue an emergency standard.

The allowable limit for EDB exposure is 20 parts per million in air, averaged over an eight-hour day, but OSHA said that it has found most workers are being exposed to levels far below that and close to its proposed new limit of 0.1 parts per million. Union officials sharply disagree with that finding, saying that flour-mill workers can smell the chemical, which has no odor until it reaches the concentration of 10 parts per million.

OSHA now has eight studies of EDB's cancer risks, which use different mathematical models and interpretations of data. Four of them show a cancer risk in the range of 990 to 1,000 for every 1,000 workers. Three others show cancer risks ranging from 160 to 725 deaths for every 1,000 workers.

The final study, which is the one OSHA has elected to use as the basis for its new EDB standard, estimated 70 to 100 cancer deaths from EDB for every 1,000 workers regularly exposed to 20 parts per million. According to OSHA, that study was "prudent" because it measured only the types of cancers that result from "chronic low-level exposures."

In its draft proposal, now under review at the Office of Management and Budget, OSHA said that "the risks from EDB exposure appear to be far greater than for any other hazard that OSHA has regulated in the past."

"It isn't nuclear war," said Larry Mazzuckelli, a NIOSH scientist, "but from an occupational standpoint it doesn't look very good."

By OSHA's estimate, 57,000 workers under its jurisdiction may be exposed to EDB. But the agency does not have jurisdiction over small farming operations, and other estimates of the workers potentially at risk from EDB range as high as 100,000.

OSHA officials agree that the risk studies "are shocking," but they contend that the figures do not represent fairly the potential for on-the-job exposure to EDB.

"Our information is that exposure is seasonal and intermittent," said OSHA spokesman Doug Clark. "Certainly we think there is a potential danger out there, but we feel that the standard as opposed to emergency rule-making procedure, following the administrative procedure act, is most appropriate."

The EPA, meanwhile, has been treading water since 1980 on a proposal to ban most agricultural uses of EDB. Agency officials said this week that the ban is moving ahead, largely because the chemical appears to be getting into the nation's supply of food and drinking water.

Southern states, where EDB has largely replaced the banned chemical DBCP as a soil fumigant and as a control on fruit trees' root nematodes, are finding EDB in ground water. In California, it has been detected in biscuits. NIOSH officials report finding detectable levels in trucks that carry fumigated fruits.

The levels being found in food appear to be far lower than the airborne levels to which workers may be exposed. But scientists concede that they do not know what level is safe in food or water.

"I'm a consumer, too," said NIOSH scientist Mazzuckelli. "I eat all those things. And I don't know how to answer that question."