The climate bill nearing a vote in the U.S. House will reward farmers who plant trees or take other steps to control greenhouse gases and it will remove for five years an obstacle to corn-based ethanol, said the House Agriculture Committee chairman on Wednesday. Chairman Collin Peterson said negotiators hoped by the end of the day to agree on a broader definition of "renewable biomass" for alternative fuels. U.S. biofuel output could be larger if more material is available. "We think we have something that can work for agriculture," Peterson told reporters after summarizing a compromise with House Energy chairman Henry Waxman. Some four dozen rural lawmakers sided with Peterson in seeking revisions in the bill. Under the compromise: --The Agriculture Department would oversee projects by farmers and ranchers to lock carbon into the soil by reduced tillage or planting trees. USDA is more popular in farm country than the Environmental Protection Agency, which runs most pollution control programs. Work dating from 2001 would be eligible for credit for carbon reduction, said Peterson. Inclusion of "early adopters" will broaden the appeal of the bill, said an agricultural lobbyist. --A proposed EPA regulation, which would make U.S. ethanol makers responsible for greenhouse gas emissions from conversion of forests and grasslands overseas to cropland, would be sidetracked for five years during a study of the so-called indirect land use change. It could take effect only if three federal agencies agree and Congress could intervene to block a rule. Corn-based ethanol and some feedstocks for cellulosic ethanol would have trouble under EPA's current scoring of land-use change to meet targets for greenhouse gas savings. --Agriculture would not be required to reduce greenhouse gas emissions. The sector is a small producer of the gases. Waxman and Peterson met conservative House Democrats on Tuesday evening while working out the compromise. Earlier talks resulted in an agreement to give small rural electric operators a larger portion of credits toward meeting carbon reductions. In addition, Peterson said Waxman would accept language allowing rural utilities to use federal funds to buy a stake in nuclear power plants. The Commodity Futures Trading Commission would oversee futures markets that trade carbon contract while the Federal Energy Regulatory Commission would oversee the cash market. "My initial reaction to this deal is it doesn't fix the real problems with the bill," said Frank Lucas, Oklahoma Republican. Lucas and other Republican lawmakers say the climate bill will drive up energy costs in rural America. Rural Americans drive longer distances than city dwellers and the farm sector is a large user of fuel and of synthetic fertilizers and pesticides derived from petroleum. Farm groups said the Waxman-Peterson compromise was a step in the right direction but they have reservations about the overall bill. Some groups, including the American Farm Bureau Federation and the National Pork Producers Council, have announced opposition the bill. The National Farmers Union, which backs a carbon-trading program, has called for changes.