Also known as: agricultural supply dealer liens · agricultural-supply-dealer lien · ag supply dealer lien · agricultural lien
Written by attorneys · grounded in primary & secondary sources — see below
A nonpossessory statutory interest in farm products or their proceeds that arises in favor of a person who furnishes goods or services to a farmer and secures payment of the resulting obligation.
Alfred Ashford purchased hogs from hog farmer Carl Mason for cash value and took immediate delivery. Pioneer Feeds held an unperfected agricultural supply dealer lien on the hogs for unpaid feed. Because Ashford lacked knowledge of the lien and completed the purchase before any perfection filing occurred, his interest prevailed over the supplier's claim.
Pioneer Feeds supplied feed on credit to hog farmer Carl Mason under a state agricultural supply dealer lien statute. The supplier filed a financing statement covering the hogs before the lien became effective. The lien attached and remained continuously perfected against later creditors.
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AgriGrow Corp. initially perfected its agricultural supply dealer lien on crops by possession and later filed a financing statement covering the same collateral. The change occurred without any gap in perfection. The lien retained its perfected status throughout the transition.
Prairie Regional Bank held a perfected security interest in Carl Mason's inventory that attached before Pioneer Feeds supplied feed on credit. When Mason defaulted, the bank's interest took priority over the agricultural supply dealer lien under the applicable priority rules.
Apollo Energy sold petroleum products to farmer Adrian Aguilar on credit and obtained an agricultural supply dealer lien on his crops. Aguilar later sold the crops to Alliance Holdings without Apollo's authorization to release the lien. The lien continued in the crops and attached to identifiable proceeds in the buyer's hands.
Yes. The secured-transactions article expressly includes agricultural liens within its scope and supplies the rules for creation, perfection, and priority contests with consensual security interests. An agricultural lien is a nonpossessory statutory interest in farm products that secures payment for goods or services furnished to a farmer.
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The lien is perfected once it has become effective under the creating statute and all applicable Article 9 perfection requirements in section 9-310 have been satisfied. It may be perfected at the moment it becomes effective if the filing or other requirements are already met.
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A buyer who gives value, receives delivery, and lacks knowledge of the lien takes free if the purchase occurs before the lien is perfected. The same protection applies to lessees meeting identical conditions.
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The lien continues in the collateral after any sale, lease, or other disposition unless the supplier authorized the transfer free of the lien. The lien also attaches to identifiable proceeds of the collateral.
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