agricultural lien

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As established in UCC §9 102-5, an agricultural lien is a lien placed on farm products like farm equipment or livestock that secures payment or performance in exchange for a loan of land, goods, or money. These loans allow farmers to produce the next season of crops/raise the next season of livestock and are therefore essential to the agriculture industry. In the event of non-payment on these loans, the agricultural lien allows the creditors to take possession of the farmer’s farm products. 

Due to their importance to the agriculture industry, every state has created a statute to automatically create an agricultural lien on the property of the farmer when the farmer takes out a loan under the circumstances as provided by that individual statute. 

[Last updated in June of 2022 by the Wex Definitions Team]