House-Senate conferees skipped over last-minute jurisdictional hurdles and completed work yesterday on a legislative rescue package that would allow the Farm Credit System to issue as much as $4 billion worth of federally backed bonds.

The measure is expected to win final approval in each chamber before the holiday recess and, unless major new objections are raised by the administration, become law before year's end.

After severe losses the last two years, the Farm Credit System (FCS), a farmer-owned lending network that holds almost one-third of the nation's agricultural debt, asked Congress for $6 billion in federal aid to avoid a collapse.

House and Senate Agriculture committees worked through most of the year to produce bailout legislation. But to ease the path and win political support for the FCS package, the panels added these other major provisions:The FCS will be required to reorganize to provide better service and save money, and FCS borrowers will be assured of new rights and protections in dealing with lenders. In response to continuing complaints about the administration's handling of Farmers Home Administration (FmHA) programs, the panels extended additional protections and debt write-down assistance for FmHA borrowers. Overriding objections of the Treasury and the White House, they authorized creation of a secondary market for farm real estate mortgages, made more attractive with the possibility of a $1.5 billion federal line of credit, in effect a federal guarantee. Commercial banking groups sought the provision in exchange for support of the FCS bailout.

The administration continued to oppose the secondary market section "as an unnecessary increase in taxpayer exposure for the benefit of private financial institutions," as an Office of Management and Budget letter put it.

Observers said they believed that the objections were not serious enough to cause a presidential veto.

Jurisdictional challenges by two other House committees -- Banking, Finance and Urban Affairs and Energy and Commerce -- were settled yesterday when conferees bowed to their objections about portions of the bailout package.

Energy and Commerce insisted that the farm real estate secondary market be subject to Securities and Exchange Commission regulation to protect investors. "It would be a mistake to put new securities out on the market without the full range of protections," Rep. Edward J. Markey (D-Mass.) said.

The Agriculture conferees accepted language offered on that and other regulatory points by Markey and Rep. John D. Dingell (D-Mich.) but extracted a pledge from the rival committee that the issue would be restudied if regulation added additional costs to secondary market operations.

The conferees also went along with Banking Chairman Fernand J. St Germain (D-R.I.), who said his panel was concerned that speculators might find a way to take advantage of agricultural lending programs designed to aid farmers.

The legislators agreed that appraisals on land covered by fixed-rate financing must demonstrate that borrowers will be engaged actively in farming and that they intend to remain in farming.

The other major issue resolved quickly by the conferees involved financing the bailout. The conferees accepted the Senate approach -- federally backed FCS bonds, on which the government would pay part of the interest and which indicated less federal budget exposure.

The House had called for raising money by selling government assets and making direct Treasury payments to FCS.