Agricultural Lien Law and Legal Definition

Agricultural lien is a statutory lien that protects the seller of farming equipment by giving the seller a lien on crops grown with the equipment. An interest in farm products such as wheat, corn, or soybeans or livestock secures payment or performance of an obligation for goods, services, or rental on real property that an individual or organization leases in connection with farming operations. With regard to Secured transactions it is an interest other than a security interest in farm products having three characteristics:

(1) it must secure payment or performance of an obligation for goods or services furnished in connection with a debtor's farming operation, or of an obligation for rent on real property leased by a debtor in connection with farming;

(2) it must be created by statute in favor of a person either who in the ordinary course of business furnished goods or services to a debtor in connection with the debtor's farming, or who leased real property to a debtor in connection with the debtor's farming; and

(3) the effectiveness of the interest must not depend on the person's possession of the personal property. [UCC § 9-102(a)(5).]