President Carter opposes a controversial effort to break up large Western agricultural landholdings into small, family farm units.

Carter, in an interview with farm editors Friday, said he supports changing a 1902 law that restricts ownership of farmland served by federal water projects to 160 acres per person.

"Seventy-five years ago, 320 acres for a husband and wife for irrigated land was all they could handle," the President said. "Now, with massive development and large machinery, a larger acreage is necessary for an economically viable farm operation."

"So the law needs to be changed," Carter said. But for the present, he added, "we don't have any alternative but to enforce the law."

Belated efforts to enforce the long, ignored law have created a hot political controversy, particularly in the Imperial Valley of California.

Yesterday, for example, several hundred farmers, carrying placards that read "Fairness for Farmers" and "Save the Imperial Valley," staged a demonstration in San Diego, where the California Republican Party was holding its annual convention.

About 50 huge tractors circled the San Diego convention center for several hours in what was said to be a dress rehearsal for a larger demonstration scheduled for Oct. 22 in Los Angeles, where Carter is to address a fund-raising dinner.

The transcript of Cater's Friday remarks was released by the White House yesterday. It was the first time he had spoken out on the issue since mid-August, when the Interior Department issued draft enforcement regulations.

During the interview, the President said he ordered Assistant Agriculture Secretary Robert Meyer to stop lobbying for a change in the regulations.

Carter said he did not think that Meyer, who owns leases 2,100 acres in the Imperial Valley, had done "anything surreptitiously or improperly." But the President added, "I think other people can be adequate spokesmen, including myself, and I think the secretary needs to know that."

Meyer, a Carter appointee, has acknowledged talking to top administration officials and members of Congress on the issue. But he has insisted he did so only after assuring Agriculture Secretary Bob Bergland that he was acting as a private citizen and not as an administration official.

The law in dispute was passed in 1902 when efforts were beginning to carve out farmland from vast, rich but desert-like areas of the West. It was never fully enforced, however. And in 1933 the Interior Department issued an administrative opinion exempting the Imperial Valley because it had private water resources before the federal water projects were built.

Acting on a suit brought by National Land for People, Inc., a land-redistribution group, a federal appeals court recently ruled this exemption no longer applied.

The Interior Department proposals were made in response to the ruling. The principal regulations would eliminate absentee ownership and set up a lottery that would distribute a million acres of Western reclamation land on the homestead principle of 160 acres to each farmer.

A farmer would be allowed to own 160 additional acres for his spouse and each of their children. The average farm in the Westlands Water District, the largest water district affected by the regulations, is now about 2,200 acres.

Understandably, the issue became a highly emotional one for farmers. Since few farmers have fewer than several hundred acres, they tended to view it as symobolic of "how unrealistic they are back in Washington."

Carter, in his interview with farm editors, tried to distance himself from the issue.

"The altercation has been not between Washington and farmers, honest farmers in the West; it has been between farmers in the West and their neighbors - their neighbors wanting to have an easier ability to acquire land, the farmers wanting to hold the land they possessed," he said.

It was unclear yesterday what type of change in the law Carter intends to seek. "His intentions were pretty clear by his words, and I assume he'll ask that some legislation be drawn up," a White House spokesman said.

Leo Krulitz, Interior Department solicitor, said federal officials plan to hold 10 field hearings in November on the proposed regulations.

Carter's statements, he said, "are not inconsistent with our view here."

If evidence gathered in the hearings suggests that changes should be made in the law, he said, "I don't think we'd hesitate to recommend those changes to Congress."

On other subjects, Carter said in the interview that he didn't believe slipping farm prices had hurt his political support in the farm belt.

He also said he expects that trade between the United States and China will soon be on the upswing. The new Chinese government is expected "to expand [its] relationship with other countries on a foreign trade basis, and perhaps we can benefit from that," he said.