For the first time in years, long lines formed last week at the Maryland Tobacco Growers Association farm supply store here. It was not a sign of agricultural prosperity that drew the crowds. It was a closing sale.

Caught in the financial squeeze facing farmers across the country and the special problems affecting tobacco growers in Southern Maryland, the farmers' cooperative has voted to liquidate its assets after 60 years in business.

At the same time, the "Pride in Tobacco" festival held in St. Mary's County each year since 1981 has been canceled for lack of interest, and the University of Maryland tobacco farm's annual field day recorded its lowest attendance last week since it started in 1951.

Up and down the Southern Maryland peninsula, where tobacco has reigned as the traditional cash crop for more than three centuries, the sotweed factor has fallen on hard times. The summer drought, poor market prices and the growth of suburbs supplanting farm acreage have taken their toll.

"The farmer is caught in the middle between expansion of the population and hard times in agriculture," said Hank Walke, manager of the 6,000-member tobacco growers cooperative that voted July 15 to go out of business.

"Farmers in the area had used these stores all their lives, and their fathers before them," said Walke, a Calvert County farmer. "It's like a landmark that's leaving you, so it's emotional for everyone. It's just changing times we all have to face."

Walke said the cooperative had to borrow heavily at high interest rates to purchase inventory because the farmers were in arrears on their accounts to the association. "The squeeze gets tighter and tighter," he said.

"The farmer gets paid once or twice a year -- for tobacco in the spring and for corn and soybeans in the fall," Walke said. "At most, he gets three paychecks a year. It's difficult for the farmer to pay you every 30 days."

The decline of tobacco prices made the situation worse, he said. The 1982 market price of $1.75 a pound dropped to $1.29 this year.

The poor quality of the 1984 crop -- sold in 1985 -- prompted some farmers to pad their market baskets with inferior leaves and dirt to add weight, a practice known as "nesting" that resulted in the threat of prosecution by Maryland authorities.

"There were very, very few cases this year, and nobody was prosecuted," said Claude McKee, the University of Maryland's extension tobacco specialist.

During the early 1980s, when prices were high, tobacco acreage actually increased, to 27,000 acres in the state, and new tobacco barns sprouted in the fields. Acreage has decreased a third since then, to 18,000 this year.

"Tobacco is going to be in Southern Maryland for years, just on a smaller basis," Walke said.

"More and more farms are growing houses now instead of crops . . . but agriculture will turn around," he said.

In the short term, however, this year's drought has further dimmed the prospects for a good cash crop -- by as much as 30 percent, according to Walke's estimate -- and has hurt business at the already ailing co-op stores.

"We did a lot of business in fertilizer sales the last couple of years," said Lee Hammonds, 20, assistant manager of the co-op's store in Waldorf, which is scheduled to close its doors forever tomorrow.

"But this year, we couldn't budge the stuff. You gotta have rain behind her or she's just gonna burn the crop up . . . .

"When I started working here" four years ago, Hammonds added, "we did a right good business for the first couple of years. It's all slacking back. They're not paying the farmer enough, and tobacco is not doing good in the market. It's been hard all the way around this year."

Last year, the cooperative closed its farm machinery store here and lost the lease on the tobacco warehouse it operated at Wayson's Corner in Anne Arundel County. Liquidation plans call for selling the co-op properties here and in Lothian and Upper Marlboro.

R/K AgriServices Inc., a Pennsylvania farm supply company, is to lease and operate co-op stores in Huntingtown and Leonardtown.

McKee, who has seen his tobacco field day attendance drop from 790 in 1982 to 360 last year and 237 on Wednesday, said it is time for Maryland planters to find new markets for their product, now sold mostly to German and Swiss cigarette manufacturers.

"The European market is not expanding," he said. "We ought to scout other places where the use of tobacco is expanding: Japan, China, Israel, Africa."

Meanwhile, the economic pressures are forcing some lifelong farmers out of the fields and into the work force.

"Two of my sons quit," said Alyosius Raley, 49, a St. Mary's County tobacco, corn and soybean farmer.

"We've had four or five big farmers around here quit and go out and get jobs; they never even planted a crop this year," he said. "One boy, he's 65 years old, been farming his father's place since he got out of high school. Another man, 44 years old, and his son, both of them stopped and got jobs."

These former farmers, he said, are driving trucks or working for the county. "I'm 49; I gotta stick with it," Raley said. But the "Pride in Tobacco" festival, which Raley had run since 1981, is another story.

Sponsored by the 7th District Optimists in St. Mary's County, the event was bolstered each year by a grant from the R.J. Reynolds tobacco company.

But an initial subsidy of $10,000 dropped to $8,000, then $6,000 and now $4,000.

Not even country music headliners could attract the crowds to keep it going.

Last year, despite Reynolds, the festival lost $1,500.

"We just didn't have the people showing up for it," said Raley. "We didn't get even the local farmers to come out for it.

"We'll let it lay a couple of years," Raley said. "Maybe we'll change the name, take the 'tobacco' out of it and make it a heritage festival."