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DAN GUNDERSON: Dusty pickup trucks crowd the yard and line the narrow dirt road leading to Randy Awes Farm.

[AUCTIONEER CHANT]

About 50 men in seed caps and blue jeans cluster around as the accumulated possessions of two generations are sold.

[AUCTIONEER CHANT]

DAN GUNDERSON: On the fringe of the crowd, Randy Awes squints into the morning sun and watches the bidding.

RANDY AWES: I'll be happy when this is done with.

DAN GUNDERSON: A tall, bearded man in his mid-forties, Randy Awes farms in the heart of the Red River Valley, some of the richest farmland in the world. But he says with drought, floods, and disease, he's had only one profitable year in the last 10. After Congress eliminated the farm disaster program, he decided farming wasn't worth the struggle. He'll work construction instead.

RANDY AWES: Now that I'm getting out of it, I wouldn't get back in it right now for any amount because I'm owing what they owe to the bank by the time I clear up them guys. I'll be happy to be out of it. So this is it.

[LAUGHS]

All I know is every farmer I know that has quit farming hasn't regretted it.

DAN GUNDERSON: At least four of Randy's neighbors, all in their 40s, are also quitting this spring. He says most of the farmers left in his neighborhood are older, just trying to hang on until they can retire.

MICK RAPACZ: --and a good one. He said it runs real well there.

Mick Rapacz has been a busy man this spring. The Argyle based auctioneer says he may have as many farm auctions this year as he did during the farm crisis of the early '80s.

MICK RAPACZ: Small town America is catching heck. There's no doubt about it.

DAN GUNDERSON: Rapacz may be busy, but he's not necessarily happy. As a small town businessman, he's tired of watching people leave farms and towns.

MICK RAPACZ: You can drive down some roads, and I can say I had a sale here, and I had a sale here two years ago, and five years ago I had one there. And it's depressing, but there's still hope. I mean, we could come out of it with a nice year, but they always say it takes two good years to come out of one bad year. And we've already had too many bad ones.

DAN GUNDERSON: Too many bad years dragged Henry and Steve Panick to the brink of bankruptcy. But they are not going willingly.

HENRY: Got things pretty well lined up already, but we had a few things to go yet.

DAN GUNDERSON: On a sunny spring morning, the father and son are getting their machinery ready for auction. Henry sits on the tire of a cultivator and rails at the bank. He says he paid his debts for 50 years. Now, after a few bad years, the bank refused to lend him money to plant a crop.

HENRY: I'll be 74 October 6, and I felt I could have gone another 10 years. But--

[LAUGHS]

--bank says no.

DAN GUNDERSON: Henry's son, Steve, says farming is in their blood.

STEVE: I want to farm. It's in me, just like Dad. I mean, here's the thing. Either you're a farmer or you're not. That's my opinion.

DAN GUNDERSON: Steve [? Panick ?] is a burly man in his mid-30s whose beard matches his shoulder length black hair. He's angry, angry at banks, big corporations, and the government. Steve spent the winter unsuccessfully trying to come up with a business plan to save the farm.

STEVE: You could just as well go and carry groceries at Hugo's and forget about the misery and headache, because that's all we're doing is beating our head against the wall out here to feed the world. We employ 50% of the workforce in this country, feed the whole damn world, and we can't feed ourselves. There's something wrong.

DAN GUNDERSON: The [? Panicks ?] say, what's wrong is the balance between the cost of farming and the price they get for their crop. Steve [? Panick ?] points to the four-wheel-drive tractor across the yard. Its price has quadrupled in the past 15 years while the price of wheat has gone down. The [? Panics ?] aren't sure what they will do after the sale.

The money will all go to pay off the bank, but Henry will be left owing thousands of dollars in state and federal income taxes. He'll have about $500 a month in income from Social Security. Kevin Duffy says the [? Panicks ?] situation is not unusual. Duffy is a Thief River Falls attorney who specializes in helping farmers. He says many farmers who are quitting may be paying the tax bill for the rest of their lives.

KEVIN DUFFY: One of the things farmers should be looking at advocating is if you're getting out of farming and you want to just call it quits, that there's some kind of exemption there for not having to pay capital gains when you're just basically down and out. You can liquidate and get out and walk away and not end up owing the IRS. It's almost like kicking the guy when he's down.

DAN GUNDERSON: That's one reason some farmers in Northwestern Minnesota are desperately trying to hang on. The federal government's Farm Service Agency is the place farmers go for loans when the banks say no. Applications have doubled this year.

Congress has appropriated additional money to the lending agency, but many say more debt is not what farmers need. Bob Burleson heads the farm management program at Northwest Technical College in Thief River Falls. He says traditionally it takes three to five years to pay off debt accumulated in one bad year.

BOB BURLESON: But if the following year you end up having to take another emergency loan, and the year after that you have to take another emergency loan. Pretty soon that snowballs on you. It's like a homeowner taking a second mortgage on their house every year, for five years, because they didn't have the salary for some reason over that year.

DAN GUNDERSON: Burleson says a good crop this year could slow the foreclosures and auction sales. But he says until the price of wheat goes up, farmers will continue to live on the edge of disaster. I'm Dan Gunderson, Main Street Radio.