By STEVEN GREENHOUSE
 
The North Carolina Growers Association, which represents 1,000 farmers, signed a union contract yesterday covering 8,500 guest workers from Mexico - a move that the association and union said was the first union contract in the nation for guest workers.

At the signing ceremony at a church in Raleigh, the Mount Olive Pickle Company, the nation's second largest pickle company, announced that it had signed a separate contract with the union, the Farm Labor Organizing Committee, ending a five-and-a-half-year boycott campaign against the company.

The two contracts end a long, bitter dispute in which the Farm Labor Organizing Committee accused Mount Olive of using cucumber growers who mistreated their workers. In organizing a boycott that was backed by the National Council of Churches, the union said that workers employed by Mount Olive's growers often lived in squalid housing and that one worker had died of heat prostration and another of heat prostration or exposure to pesticides.

"The company is tremendously relieved to have the boycott ended,'' said Baldemar Velasquez, president of the Farm Labor Organizing Committee, which is based in Toledo, Ohio. "They were getting tired of all the negative publicity."

Bill Bryan, Mount Olive's president, said the boycott hardly hurt the company's sales, except in pockets of the Midwest. But he acknowledged it was time-consuming and annoying to have to respond to questions about why his company was being boycotted.

"We have always said we would be interested in settling the boycott if we could do so with reasonable terms that we felt were appropriate for our company," said Mr. Bryan, who asserted that the boycott was based partly on inaccurate information and unfair accusations.

The agreement with the North Carolina growers is unusual because it is the first union contract ever signed by farmers in the state, which has a history of hostility to unions, and because the contract provides for a union hiring hall in Mexico to help supply guest workers.

In a telephone interview, Mr. Velasquez hailed the agreement with the growers' association because it gives unionized farm workers a foothold in the South and because it should encourage workers to speak up without fear of retaliation. He also praised the agreement because it provides grievance procedures and a seniority system, which he said would effectively eliminate a blacklist that prevented guest workers who complained from being rehired. Spokesmen for the growers denied that any blacklist existed.

Mr. Bryan said the agreement Mount Olive signed would help workers by raising their wages by a total of 10 percent over three years. Under federal regulations, agricultural guest workers in North Carolina under the H-2A temporary visa program are to be paid at least $8.06 an hour, with a piece rate equal to 44 percent of the value of what they pick.

Mr. Bryan said his company would raise the price it pays its 60 growers, a move that would help raise piece rates so workers could earn $10 to $12 an hour. Mount Olive also agreed to pay a 3 percent price bonus to growers who agreed to provide workers compensation coverage.

In Mount Olive's agreement with the union, the company promised to participate in various committees organized by the growers' association to study how to improve housing and health care for the farm workers. In addition, the union and growers' association said they would jointly contact the Mexican government to discuss graft, bribery and blackmail carried out by recruiters of migrant workers, especially illegal immigrants.