TRENTON, N.J. (AP) _ An attorney for the woman who gave birth to Baby M said in an appeal before the state Supreme Court today that surrogate parenting violates public policy by exploiting women and emotionally crippling children.

During an hour-long argument, lawyer Harold Cassidy also said the legal arrangement that allowed surrogate mother Mary Beth Whitehead to bear a child for William and Elizabeth Stern is unconstitutional.

''This contract is calling on the mother to act as if she's not a whole woman,'' Cassidy said. ''She's going to be asked to act only as a uterus.''

In an appeal of the landmark Baby M case, Mrs. Whitehead is seeking to overturn a March 31 decision by Superior Court Judge Harvey R. Sorkow that upheld the $10,000 contract under which the child was born, severed Mrs. Whitehead's parental rights to the baby and awarded custody to Sterns.

The decision was the nation's first on a broken surrogate contract and had the effect of creating state law on the issue because no New Jersey statute deals directly with surrogacy.

Mrs. Whitehead, a 30-year-old homemaker and mother of two other children, had agreed to be artificially inseminated with Stern's sperm and bear a child for him and his wife.

When the baby was born March 27, 1986, Mrs. Whitehead said she couldn't go through with the deal. The legal tug-of-war began after Mrs. Whitehead fled to Florida with the child and the Sterns sued for custody.

After Sorkow's ruling Mrs. Stern, a 41-year-old pediatrician, adopted the baby who now is legally Melissa Elizabeth Stern. The child lives with the Sterns in Tenafly, but while her appeal is pending Mrs. Whitehead is allowed to visit the girl she calls Sara for two hours each week.

She attended today's court session with her husband, Richard, and her daughter, Tuesday. The Sterns were seated across from the Whiteheads.

After giving his argument, Cassidy was asked by Chief Justice Robert N. Wilentz if it were a function of the court to ''discourage a technological accomplishment,'' such as artificial insemination, that would allow infertile couples to pay women for children.

''They shouldn't encourage it,'' the attorney answered. He said it would reduce the surrogate mother's role to ''plain abandonment'' of their children.

In deciding the Baby M case, New Jersey's highest court must determine the degree, if any, to which existing state laws on adoption, custody and the termination of parental rights pertain to a case in which a surrogate mother wants to keep the baby.

Sorkow said repeatedly that surrogacy is a new concept that can't be covered under those statutes. Lawyers for the Sterns agree.

In briefs filed with the Supreme Court, Mrs. Whitehead's lawyers have said Sorkow deprived the surrogate of her ''constitutional right to the continued companionship of her child.''

They add that surrogacy violates public policy by harming the children involved and exploiting the surrogate mothers. Surrogacy, they say, is nothing more than ''trafficking in human lives.''

Once the conclusion is reached that the contract is unenforceable, Mrs. Whitehead's lawyers said, Baby M could be taken from Mrs. Whitehead only if she is found to be an unfit mother.

But attorneys for the Sterns say the Constitution protects their clients' rights, too. Surrogacy arrangements are valid because couples enjoy a fundamental right to have a child, the say. Mrs. Whitehead waived her constitutional right to the baby by signing the surrogate contract, the Sterns' attorneys say.

Citing testimony that portrayed Mrs. Whitehead and her husband in a negative light, the Sterns' attorneys also say the child's best interests mandate placement with the Sterns.