France sought to calm farmers' anger over high fuel prices on Tuesday, offering extra tax breaks and refunds worth 30 million euros ($36.83 million) and announced measures to encourage the development of green fuels.
"The rise in fuel prices penalises farms, which cannot always pass the cost on. We must help them," Prime Minister Dominique de Villepin told a meeting of farmers in Rennes.
He said the state's contribution to fuel duties paid by farmers would rise to five centimes per litre from four.
There would also be higher compensation for taxes linked to natural gas usage and certain land taxes would be trimmed.
Opposition Socialist leader Francois Hollande earlier accused the government of underestimating the impact of soaring oil prices on the population.
French President Jacques Chirac said petrol companies should lower their prices at the pumps and oil firm executives have been summoned on Friday to discuss what else they can do.
Villepin also said France should promote alternative fuels made from crops like sugar beet, cereals or oilseeds.
France should reach 7 percent of biofuel incorporation in fuels by 2010, a figure rising to 10 percent by 2015, he said.
"Biofuels are fundamental at a time when we are looking to reduce our fuel consumption. They also contribute to the fight against greenhouse gases," he said.
Villepin said a tender would be launched by the year-end for a total of 1.8 million tonnes of biofuels, doubling the amount first planned, and further tax concessions would be studied.
The tender will allow biofuel producers to bid for the right to produce a fixed volume. France's main FNSEA farm union had said it would wait to hear the government measures before deciding any direct action over fuel costs, but farmers have held small local protests.
Farm unions say the price of diesel used by farmers has doubled since 2003 and is now around 710 euros per 1,000 litres.
The FNSEA had previously called for tax concessions on fuel, the cancellation of land taxes and compensation from the state fund that deals with farm crises such as drought.
The government has already agreed to compensate farmers in some regions over losses linked to the severe drought in France this year. Farmers in 17 of mainland France's 96 departments have so far been declared eligible to file compensation claims.
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