July 6, 1981

The French Government expressed concern today over Mexico's decision to ''suspend'' contracts held by French companies in retaliation for France's refusal to pay an extra $2 a barrel for Mexican oil. The Mexican decision, announced Saturday, apparently freezes work by French companies on a factory to build subway cars, as well as halting construction of an auto engine plant by Renault, the French state-owned auto maker. Mexico also said it would not consider French bids for nuclear reactor contracts. The French foreign ministry said today it was ''following with close attention'' the Mexican Government's decision to halt the contracts, potentially worth about $1 billion.

''We have been discussing among ourselves whether it is the function of botanical gardens just to identify, inventory and classify plants, or whether there are social problems of such consequence that we must become involved in the practical application of that knowledge.'' - Dr. James M. Hester, president of the New York Botanical Garden.

INTERNATIONAL Moscow might not block a meeting of the Polish Communist Party on July 14 that is expected to result in the approval of a side range of liberal changes in Poland's political and economic systems. This was implied in a joint communique published in Moscow and Warsaw after the Soviet Foreign Minister, Andrei A. Gromyko, returned to Moscow after threde days of talks with Polish leaders. The communique spoke of a "businesslike, comradely atmosphere," but left unclear what Moscow intends to do about Poland's push for a more flexible form of Communism. (Page A1, Column 6.) Near-final election returns in Israel gave Prime Minister Menachem Begin Likudbloc a one-seat lead over the Labor Alignment headed by Shimon Peres. Prime Minster Begin was expected to get a call from President Yitzhak Nacon to form a new government. (A1:5)

A 9-year-old girl in a white dress used one hand to balance a wicker basket stuffed with six clucking chickens on her head. With the other she clutched the hand of her 3-year-old sister. Their dirty faces were freckled with gnats. Shirtless men sweated under the weight of crude wooden beds. Women carried heavy stone slabs for grinding corn for tortillas. A teen-age girl walked sprightly in spite of a heavy board on her head, a rolled up straw mat in her left hand, and, in her right hand, a large saucer-shaped piece of metal charred by the open fires on which it had been used for cooking.

The New York Botanical Garden, known to botanists and horticulturists throughout the world as a leading research center for plant sciences, has decided to establish three new institutes devoted to solving urgent social and ecological problems. This represents a major shift in focus for the 90-year-old institution, whose primary research function has been the gathering and classification of plants from all over the world.