Food Security Act Compliance
We advise both agricultural product purchasers and banks and financial institutions as to their rights and obligations under the United States Food Security Act.
This law protects banks and other lenders who loan money to agricultural producers. If the lender follows certain steps, the purchasers of farm products must comply with certain requirements before they pay the lender’s farm product borrower. If the lender has met the requirements of the Food Security Act and the buyer fails to follow the lender’s payment instructions, the buyer can be liable to the lender for improper an to the seller.
Although the Food Security Act is a federal law, both lenders and purchasers of farm products need to be aware of the state in which the farm product seller is located because the requirements of the Food Security Act vary from state to state. In those states which have lien registries recognized by the USDA, farm product buyers are required to check the registry in those states before paying the farm product seller. In those states in which the state registry is not recognized by the USDA, the requirements for proper notice to farm product buyers are strictly applied. We assist both financial institutions and farm product purchasers in the 28 states in which we are licensed to practice law as to how to comply with the requirements of the Food Security Act.