The plan specifically excluded children who work on farms owned or operated by their parents.
But the proposal still became a popular political target for Republicans and conservatives who called it an impractical, heavy-handed regulation that ignored the reality of small farms.
The move disappointed child safety groups who said the rules represented long-overdue protections for children working for hire in farm communities.
Three-quarters of working children under 16 who died of work-related injuries in 2010 were in agriculture, according to the Child Labor Coalition.
Utah Farm Bureau President Leland Hogan said the proposed rules would have prevented many young people from working in agriculture, including on extended relatives' farms.
"This announcement shows the strength of American agriculture and grass-roots action," he said. "Farm families throughout Utah should be proud of the influence that they had in this process, and the contribution they made to the outcome."
Instead, the Departments of Labor and Agriculture will work with rural stakeholders, such as the American Farm Bureau Federation and the National Farmers Union, to develop an educational program to reduce accidents involving young workers and promote safer agricultural working practices.
Hogan said the Utah Farm Bureau and the Utah Labor Commission have worked together for years to promote safer working environments for farmers, ranchers and other related groups.
The Utah Farm Bureau "has worked successfully at educating youth and adults on safe practices on Utah farms and ranches, with an 83 percent decrease in fatalities since 1986," he said.
Reid Maki, coordinator of the Child Labor Coalition, said the Labor Department's sudden decision to withdraw the proposed rules means more children will die in farm accidents that could have been prevented.
"There was tremendous heat, and I don't think it helped that it was an election year," Maki said. "A lot of conservatives made a lot of political hay out of this issue."
Zama Coursen-Neff, deputy children's rights director for Human Rights Watch, said the public debate over the rules focused too much on family farms when it should have been about the real victims poor Latino kids who do seasonal or migrant farm work and are sickened by toxic pesticides, suffocated in grain elevators or maimed by heavy farm machinery.
Many opponents didn't seem to care if they misrepresented the rule to make a political point.
Former Alaska Gov. Sarah Palin posted a message on her Facebook page titled, "If I wanted America to fail, I'd ban kids from farm work." She called the plan "more overreach of the federal government with many negative consequences."
In fact, the rules would not have banned kids from all farm work, but child advocacy groups say that's the kind of misinformation they struggled to refute.
"Some of these conservatives knew they were exaggerating the scope of the rules and creating unnecessary fear about them, but they were fine with that," Maki said.
The government estimates that more than 300,000 children under 18 work on farms, but that figure probably is higher because it doesn't include children who work for farm labor contractors.