The House Agriculture Committee plowed forward Tuesday with efforts to fashion a drought-relief package following a warning from President Reagan not to "bust the budget" with aid to desperate farmers.

"It ain't over 'til it's over, and it's never over in this committee," House Agriculture Committee Chairman E. "Kika" de la Garza, D-Texas, declared as the lawmakers scrambled to meet a self-imposed deadline of writing a bill and putting it on the floor of the House this week.A mound of amendments still faced the committee, which had announced prior to the congressional break for the Democratic National Convention that it had finished with all but the formalities. But de la Garza was still shooting for a quick wrapup followed by floor action this week and a House-Senate conference committee next week.

As the lawmakers went back into session, Deputy Secretary of Agriculture Peter Myers told them that the administration's specific objections boiled down to two features now in the legislation.

One would streamline and expand the system under which the Agriculture Department provides feed aid to livestock producers. The other would require farmers to buy federal crop insurance in the future as a condition of getting relief.

"We don't think that makes much sense," Myers said. Major grower groups wrote to lawmakers on Monday to urge an end to the crop-insurance provision.

In his letter Monday to the lawmakers, Reagan warned against "creating windfalls for some" as part of the bill because it would "mean less for the truly deserving." He said farmers who bought crop insurance "should not be penalized relative to farmers who did not act with such prudence."

The measure should not "include any incentive for a farmer to plow under his crops," Reagan said. He also said it was necessary to keep a rein on spending.

"To put it very simply, we must not bust the budget," Reagan said. He reiterated that lawmakers should not start rewriting the 1985 farm act.

Earlier, the chairman of a key House panel said he hoped to speed congressional approval of the drought relief package, which could come to $6 billion or more, much of it taken from $7.5 billion in government savings arising from the drought.

Rep. Charles Stenholm, D-Texas, said getting money to family farmers quickly was a top concern as the House Agriculture Committee began debate Tuesday on drought relief with an eye toward floor action Thursday.

Members of Congress and administration officials have raised concerns that the plan may go too far in helping large farm businesses.

"There are a number of things we would like to see not added on to these bills," Agriculture Secretary Richard Lyng said Tuesday on the NBC-TV "Today" program. "The president does not want this bill to be a Christmas tree (with) ornaments hung all over it."

The aid money would come from an estimated $9 billion in government savings in federal subsidies this year for some farmers who are benefiting from higher agriculture prices.