There  is, however, an important  exception to this designation.  If your borrower is a farmer, grain and seed will not be included in the definition of inventory.  This is because the definition of inventory specifically excludes farm products.  The term “farm products” is defined as not only crops growing in the field, but also, without limitation, crops grown or to be grown and supplies used or produced in a farming operation. 

Although revised Article 9 has simplified the process of taking a security interest in agricultural products, these liens do still differ in application from liens on ordinary equipment and inventory.

Author: Andrew C. Ozete (bio)
Phone: 812.452.3582
email: aozete@bamberger.com