Agricultural Lien | Propertylogy

Agricultural Lien

By on December 5, 2019

An agricultural lien is a statutory lien that has been placed on the corps belonging to a farm in exchange for a loan, equipment or supplies.

It is mostly placed on corps by manufacturers and sellers of agricultural equipment so that they would have some security over leasing their equipment to farms.

While it can be argued that not all corps fall under the terms of the lien, corps that are grown using the leased equipment would most certainly be under the lien.

Equipment on lease can be structured to be hired purchase arrangement where the farmer can exercise the option to purchase the equipment outright at the end of the lease at a discount. This discount is usually the original price minus the amount that has already been paid for the rental of the equipment.

When a purchase has been made the corps would be released from the lien.

As farming can be a capital intensive business operation, farmers often find themselves having cash flow problems.

Part of this reason is that some corps are seasonal and the harvest that generates the bulk of the revenue can be seasonal as well.

So capital is required to keep operations running until the corps are ready to be harvested.

When there is not enough funds to outright purchase equipment necessary for efficient farming, allowing agricultural liens enable farmers to obtain financing or supplies to carry on with operations.

It must be noted that such liens are not attached to the land, but only the corps.

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