By Nacho Doce and Gus Trompiz
MONTASTRUC-DE-SALIES, France (Reuters) -The French government dropped plans to gradually reduce state subsidies on agricultural diesel but that seems not enough for angry farmers surrounding Paris and still threatening to converge on the capital in their tractors.
After two weeks of protests that have spread across France, with irate farmers on Friday blocking a major highway out of Paris, Prime Minister Gabriel Attal announced a series of measures to ease financial and administrative pressure on farmers.
"We have decided to pursue our movement. The prime pinister had not responded to all of our questions," Arnaud Rousseau, head of FNSEA, France's biggest farming union, told French TV station TF1.
Speaking earlier in a mountain village farm near the Spanish border, with his notes on a bale of hay, Attal said: "We will put agriculture above everything else."
He said a plan to phase out state support on diesel would be scrapped, red tape simplified and an appeal lodged with the European Union for a waiver on bloc-wide rules on fallow land.
"We will stop this Kafka-esque system," said Attal, 34, France's new prime minister, in response to the first big crisis of his premiership. "We will stop this planned trajectory of increasing tax on non-road diesel fuel."
Attal also announced a raft of other steps designed to quell the unrest that has seen farmers spray manure over a public building and supermarket, dump hay bales in highways and empty the contents of trucks carrying fresh produce from neighbouring countries.
France would remain opposed to signing the Mercosur free-trade deal, which farmers say will flood the country with cheaper Latin American meat and produce, he said. France will also push to ease European Union rules forcing farmers to leave some of their land fallow.
Ahead of Attal's announcements, farmers had threatened to take their protest into central Paris.
"We will go right into Paris to highlight our rage, our grievances," said farmer Matteo Legrand.
Some farmers called Attal's pledges an encouraging start, with the road blockade in southern France, where the French prime minister spoke with demonstrators after his announcements, to be lifted on Saturday.
"That is one blockade but there are 100 more blockades. What was announced (...) does not calm the anger," Rousseau said, adding he was waiting for an invitation from Attal to resume talks Saturday.
Earlier on Friday, the finance and farm ministers held emergency talks with food industry officials about fair prices for produce - a "number one priority" for farmers who say they are on the sharp end of the government's drive to lower consumer prices.
Finance Minister Bruno Le Maire said the government would "double down" on enforcing a law aimed at guaranteeing fair farm-gate prices and vowed to be "pitiless" towards the supermarkets.
Le Maire has previously spent months pressuring food retail giants such as Carrefour and Danone to lower their prices after a phase of high inflation, thereby earning the ire of farmers.
France is the European Union's biggest agricultural producer.
France's protests follow similar action in other European countries, including Germany and Poland, six months ahead of European elections in which the far right - for whom farmers represent a growing constituency - are seen making gains.
(Reporting by Yves Herman, Gus Trompiz, and Benoit Van Overstraeten; writing by Tassilo Hummel and Geert De Clercq; Editing by Gareth Jones, Alex Richardson and Sandra Maler)