Iowa Democrat Tom Harkin, chairman of the Agriculture Committee and a senior appropriator, withdrew his proposal for $150 million in subsidies in the face of opposition on the committee. He was expected to try during floor debate to expand funding for the subsidy.

The new U.S. farm law authorized $150 million a year in aid to plants that expand ethanol production but only $50 million was provided for in the appropriations bill.

"I think this is something he'll definitely bring up on the floor," a spokesman said. "Senator Harkin is not satisfied with what was in the agriculture appropriations bill."

Ethanol is a growing industrial use for corn (maize), the leading U.S. feed grain and a major recipient of U.S. crop subsidies. Congress also has enacted a fuel-tax break to help ethanol compete with the price of gasoline.

"Now on top of this, we are subsidizing ethanol producers to expand ... a triple subsidy here to ethanol producers," Feinstein said when Harkin proposed the $150 million level.

California officials oppose ethanol, despite its use as a cleaner-burning fuel additive, because they fear it will raise gasoline prices. Ethanol is difficult and costly to transport because it cannot be mixed with other fuels in pipelines and must be shipped primarily by truck.

The energy bill now in the final stages of development in Congress would give ethanol a larger role. House and Senate negotiators hope to finish the wide-ranging bill by mid-September.

A record 1.77 billion gallons of ethanol were produced last year, according to the Renewable Fuels Association. A new record of 2.1 billion gallons is forecast for this year.

Harkin said the subsidy was limited to a maximum $7.5 million a year per plant and amounted to one bushel of corn for each 2.5 bushel increase in a plant's corn consumption.

"There are some new plants coming on line ... that are relying on this as a support for them to get going," Harkin said. The smaller $50 million being offered "would be a disaster, especially to small companies starting up."

While Feinstein scored ethanol as an over-subsidized industry, Cochran, a longtime member of the Agriculture and Appropriations committees, opposed Harkin's amendment as a raid on the new farm law that would inspire other attempts to siphon off money.

Harkin proposed to offset the larger ethanol subsidy by taking $15 million from the Environmental Quality Incentives Program (EQIP).

"This is a farm conservation program that benefits farmers. It is popular with farmers all over the country," Cochran said.

EQIP shares the cost for farmers and ranchers to control manure and farm field runoff. It would get $700 million in the fiscal year beginning October 1 as part of a plan to vastly expand the program to protect water purity.

One bushel of corn yields 2.5 to 2.7 gallons of ethanol along with commercially useful byproducts. More than 800 million bushels of corn were likely to be used in ethanol production this year, about 8 percent of the U.S. crop.

Monte Shaw of the RFA said the bio-energy program was "very successful" in promoting corn usage, which raised prices and reduced the cost of federal crop supports.