– A lien for the supplier of agricultural inputs for production of livestock or crops
On first look, the agricultural input lien may seem redundant to the fuel, fertilizer, pesticide, seed and electricity liens. However, the agricultural input lien can provide additional priority against other creditors in protecting a supplier’s security interest if a certain hoop is jumped. Considering the current economic and social situation, the extra jump may be worth the additional security.
An agricultural production input is “any agricultural chemical, feed, seed, petroleum product, electricity, or labor used in preparing the land for planting, cultivating, growing, producing, harvesting, drying and storing crops or crop products or for feeding, producing or delivering livestock.” Neb. Rev. Stat. Section 52-1401(10).
Although a supplier can simply file the UCC statement to perfect a production lien, Nebraska also allows the supplier to notify a customer’s lender of the supplier’s lien to potentially gain priority over the lender. The supplier must provide the lender with a Lien-Notification Statement marked IMPORTANT – LEGAL NOTICE and sent by certified mail. A lien-notification statement approved by the Secretary of State can be found by clicking the following link: Nebraska Agricultural Production Input Lien Notification Statement. The notification must include the folowing:
- Name and business address of any lender, the name address;
- Name, address and signature of the supplier;
- A description and date or anticipated date of the transaction and retail cost of the agricultural production input;
- The name, address and signature of the person to whom the product was sold;
- The name and address of the owner and description of the real estate sufficient to identify where the crops to which the lien attaches are grown, or if livestock, the name and address of the owner of the livestock, the location where the livestock will be raised and a description of the livestock;
- A statement that the products and proceeds of the crops or livestock are covered by the agricultural production input lien;
- The social security number or tax ID number of the person to whom the product was sold; and
- The social security number or tax ID number of the supplier.
Upon receipt of the Lien-Notification Statement the lender has 15 days to respond to the supplier with a (1) letter of commitment for part or all of the amount identified in the statement, or (2) a written refusal to issue a letter of commitment. The supplier cannot obtain a lien for the amount stated in the letter of commitment, while the written refusal merely retains the lender’s priority of any security interest. On the other hand, upon filing the production input lien the supplier’s priority will jump any security interest of the lender if the lender fails to respond within 15 days.
Please note, the Lien-Notification Statement is not a substitute for filing a UCC 9 financing statement with the agricultural production lien attachment, which will be addressed in Part 9 of this series.