New York Agriculture Liens: Background

The scope of the revised Uniform Commercial Code (“UCC”) Article 9 is newly expanded to cover the perfection, priority, and enforcement of nonpossessory “Agricultural Liens” in the farm products of those borrowers involved in farming operations. The definition of “agricultural liens” is different than the broader and more general category of “secured interest”. UCC Article 9 does not supersede any existing statutory liens, nor does it create any new lienor interests, but rather integrates with the existing statutory liens. See UCC 9-102(5).  Importantly, a financing statement must be filed to perfect all security interest and agricultural liens under the UCC. See UCC 9-310.

Under UCC Section 9-103, an agricultural lien does not enjoy “purchase money security interest” prioritization. However, once a security interest on crops is perfected, the security interest has priority over both the owner and other encumbrances.  See UCC 9-322(g).   In contrast, if there is conflict between an agricultural lien on collateral, and a perfected security interest in the same collateral, then the agricultural lien will only get priority if the statute creating the agricultural lien expressly gives this priority

This is an excerpt from my first book that I co-authored with Pat Dillon, an Iowa agriculture lawyer titled “Field Manual: Legal Guide for New York Farmers and Food Entrepreneurs” available on CreateSpace, Amazon, Kindle and iBooks. You can find out more about this book here.