agricultural lien

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.

While it is each state’s statute that governs agricultural lien, Article 9 of the Uniform Commercial Code (UCC) , following its revision in 2001, also includes three categories of agricultural liens, namely UCC agricultural liens (See: UCC Article 9, Secured Transactions ). These include:

  • “(A) which secures payment or performance of an obligation for:
    • (i) goods or services furnished in connection with a debtor's farming operation; or
    • (ii) rent on real property leased by a debtor in connection with its farming operation;
  • (B) which is created by statute in favor of a person that:
    • (i) in the ordinary course of its business furnished goods or services to a debtor in connection with a debtor's farming operation; or
    • (ii) leased real property to a debtor in connection with the debtor's farming operation; and
  • (C) whose effectiveness does not depend on the person's possession of the personal property.”

[Last reviewed in February of 2025 by the Wex Definitions Team ]

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