Secured Transactions

Overview

As agriculture becomes more industrialized, credit becomes more of an integral part of the production process. Lenders secure loans to agricultural producers with collateral in property such as crops, livestock, and equipment. The mechanism governing these transactions is primarily contained in Article 9 of the Uniform Commercial Code (UCC) as adopted in each state. As of January 1, 2002, Revised Article 9 of the UCC, the first major revision since 1972, has taken effect in all fifty states and the District of Columbia. Revised Article 9 broadens the scope of covered transactions and attempts to simplify the creation, perfection, and enforcement of security interests. Enactment of the UCC across the states includes some variations incorporated by individual state legislatures, and this overview focuses generally on Article 9 of the UCC as revised, and how it functions in agricultural lending. Due to the complex nature of the rules governing secured transactions, careful attention must be paid to the rules and the details applicable to each transaction in order to avoid potential pitfalls. Read the full overview.

 Note: Recently added resources are posted at the top of the applicable sections.

Major Statutes

Federal Farm Products Rule, 7 U.S.C. § 1631
Uniform Commercial Code (UCC) Revised Article 9, Secured Transactions, U.C.C. §§ 9-101–709

Regulations

9 CFR Part 205 – Clear Title – Protection for Purchasers of Farm Products
Federal Register Rules Open for Comment
72 FR 25947 Clear Title : Technical Changes
12 CFR 1002 Equal Credit Opportunity Act (Regulation B)

Case Law

Case Law Index for Secured Transactions

Center Research Publications

Lending for Livestock, Credit for Crops: Strict Foreclosure (Brown, 2022)
Lending for Livestock, Credit for Crops: Distribution of Proceeds (Brown, 2022)
Protection for Buyers of Farm Products: A Primer on the Federal Farm Products Rule (Brown, 2022)
Lending for Livestock, Credit for Crops: Considering “Commercial Reasonableness” (Brown, 2022)
Lending for Livestock, Credit for Crops: Manner and Methods of a Collateral Sale (Brown, 2022)
Figuring the Federal Farm Products Rule (Brown, 2022)
Lending for Livestock, Credit for Crops: Notice Requirements for Sale of Collateral (Brown, 2021)
Lending for Livestock, Credit for Crops: Taking Possession of Collateral (Brown, 2021)
Securing an Interest: Federal Crop Insurance Proceeds (Brown, 2021)
Lending for Livestock, Credit for Crops: When Default Occurs (Brown, 2021)
Lending for Livestock, Credit for Crops: Effect of Bankruptcy (Brown, 2021)
Lending for Livestock, Credit for Crops: UCC Agricultural Liens (Brown, 2021)
Lending for Livestock, Credit for Crops: Statutory Agricultural Liens (Brown, 2021)
Lending for Livestock, Credit for Crops: Purchase-Money Security Interests (Brown, 2021)
Lending for Livestock, Credit for Crops: An Overview of Priority (Brown, 2020)
Lending for Livestock, Credit for Crops: Filing a Financing Statement (Brown, 2020)
Lending for Livestock, Credit for Crops: Perfecting the Security Interest (Brown, 2020)
Lending for Livestock, Credit for Crops: Attaching the Security Interest (Brown, 2020)
Lending for Livestock, Credit for Crops: The Basics of Secured Transactions in Agriculture (Brown, 2020)
Show Me the Money: A Primer on Agricultural Lending (Brown, 2020)
Financing the Farm: A Law Bulletin Series on Legal Arrangements for Farm Financing (Hall & Bachelor, 2020)
U.C.C. Forms and Filing Information (NALC Staff, 2020)
State Level Overview of Laws Addressing the Regulation of Grain Sales and Storage (Rumley & Fritts, 2014)
Updated Statutory Agricultural Lien Charts (Brown)
2005 Commercial Law Update (Meyer, 2006)
Statutory Agricultural Liens Under Revised Article 9 of the Uniform Commercial Code (Schneider, 2002)

Congressional Research Service Reports

Search CRS Reports– published and made available by CRS beginning in 2017
Subjects– published by CRS and made available by NALC until 2018:

Finance and Credit

Agricultural Law Bibliography

Introduction   |   Keyword Search   |   Browse Categories

Legal publications on Secured Transactions:

Finance and Credit
Land Sales/Real Estate Finance, Mortgages/Foreclosures
Livestock and Packers & Stockyards
Uniform Commercial Code

Reference Resources

Publications

Secured Transactions & Legal Requirements Under the UCC (Justia, 2023)
Agricultural Lending Comptroller’s Handbook (Office of the Comptroller of the Currency, 2020)
How Do You Perfect a Security Interest in Agriculture? (Howard, 2020)
What is Purchase Money Security Interest (PMSI)? (CSC, 2019)
Section 1631 and the Farm Products Exception to the UCC Exception – Fertile Traps for the Unwary (Schumm, 2019)
Financing the Farm Factsheet (Hall, 2019)
What Are “Proceeds” of Crops and Livestock? (McEowen, 2018)
Secured Transactions Flowcharts (Feliciano & Radwan, 2018)
UCC Article 9 for Dummies (2017)
Selling Collateralized Ag Products – The “Farm Products” Rule (McEowen, 2017)
Ag Bankruptcies (Massouh, 2016)
A Quick Guide to Understanding “Farm Filings” (Hodnefield, 2014)
The U.C.C. and Perfection Issues Relating to Farm Products (Luna & D’Agostino 2014)
Description of the Collateral Under Revised Article 9(Grant, 2006)
Current Article 9 Issues and Agricultural Credit (Meyer, 2005)
What Every Farmer Should Know About Secured Transactions (Hayes, 2004)
Agricultural Liens under Revised Article 9 (Burnham, 2002)
The Making of Article 9 Section 9-312(2) Into Model Provision Section 9-324A: The Production Money Security Interest: Finally A Sensible “Superpriority” For Crop Insurance (Finch, 1999)

Additional Resources

Collateral Evaluations (Farm Credit Administration)
Secured Transactions & Bankruptcy (Boise State U.)
Secured Transactions Posts (Ag & Food Law Blog)
UCC Article 9 State Statute Locator (Cornell U.)
Washburn Agricultural Law & Tax Report: Secured Transactions Annotations (Washburn U.)

Video and Audio Resources

Hot Topics in Ag Finance Law (Ag Law in the Field Podcast, 2021)
Advancing Agriculture: Security Interests and Article 9 Challenges Part 1 (Benefield & Kaiser, 2021)
Advancing Agriculture: Security Interests and Article 9 Challenges Part 2 (Benefield & Kaiser, 2021)
UCC Article 9 Search and Filing Basics (CSC, 2021)
Liens and Security Interests in Farm Products (CSC, 2018)
Secured Transactions (Ecampus Media, 2015)