S 2797
Capital for Beginning Farmers and Ranchers Act of 2025
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Bill overview
This bill, the Capital for Beginning Farmers and Ranchers Act of 2025, creates a pilot program to provide development loans and loan guarantees to beginning farmers and ranchers. The program aims to help these farmers invest in long-term improvements to their operations, such as equipment, infrastructure, and business practices. It establishes specific terms for these loans, including flexible repayment options and low interest rates, and includes training and support for participating farmers.
Key provisions
- Establishes a pilot program for development loans and loan guarantees to beginning farmers and ranchers.
- Defines ‘development expenditure’ to include a wide range of investments, such as equipment, infrastructure, and branding.
- Sets loan terms including a repayment period of 3-10 years, a maximum loan amount of $100,000, and a low interest rate (0-3%).
- Allows for reduced collateral requirements based on borrower experience.
- Requires the Secretary to provide comprehensive training and support to borrowers on farm management issues.
- Mandates ongoing evaluation and biennial reporting on the pilot program’s effectiveness.
- Clarifies how development loans will be treated for existing loan limits and regulations.
- Specifies training providers for participating farmers, including those with existing contracts and grant recipients.
Who is affected
- Beginning farmers and ranchers
- Agricultural lenders
- The Department of Agriculture
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119th CONGRESS — 1st Session
S. 2797
IN THE SENATE OF THE UNITED STATES
A BILL
To amend the Consolidated Farm and Rural Development Act to provide for a pilot program under which development loans and loan guarantees may be made to beginning farmers and ranchers, and for other purposes.
This Act may be cited as the Capital for Beginning Farmers and Ranchers Act of 2025
.
Congress finds that—
beginning farmers and ranchers often pursue business models featuring diverse and specialized production and marketing strategies;
diverse and specialized agricultural businesses typically require substantial early-stage investments which will benefit the operation for years to come; and
programs in effect as of 2025 often finance those multi-year investments as annual operating loans, resulting in beginning farmers and ranchers under-investing in critical start-up capacities, limiting the ability of beginning farmers and ranchers to accumulate working capital, and increasing the difficulties faced by beginning farmers and ranchers in meeting the terms of those loans.
Subtitle B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941 et seq.) is amended by adding at the end the following:
In this section, the term development expenditure means a capital investment that benefits a farming or ranching business of a qualified beginning farmer or rancher for more than 1 year.
to increase long-term soil fertility, establish perennials, or develop breeding stock;
to establish an appropriate foundation of small equipment, tools, or supplies;
to develop branding and reputation, establish commercial relationships with suppliers and key service providers, access new markets, or refine product offerings;
to establish a bookkeeping system sufficient to support invoicing multiple clients and managing profitability with respect to diverse crops and livestock;
to establish payroll and implement legally compliant labor practices;
to establish other business management practices relating to food safety, environmental, or other regulatory compliance; or
for such other items as the Secretary determines appropriate.
Not later than 2 years after the date of enactment of this section, the Secretary shall establish a pilot program to make or guarantee development loans to qualified beginning farmers and ranchers to finance development expenditures.
shall have a repayment term of—
may be used only to cover development expenditures;
shall not exceed $100,000;
shall have a collateral requirement of not more than 100 percent loan-to-value, subject to paragraph (2);
shall have an interest rate, determined by the Secretary, of—
shall require the participating qualified beginning farmer or rancher to make annual interest payments for the full amount of interest due; and
shall include flexible principal repayment, subject to the condition that not less than 1 percent of the remaining balance shall be due annually on a date determined by the Secretary.
The collateral requirement described in paragraph (1)(D) may be reduced by the lender based on the farming or ranching experience and expertise of the borrower.
A development loan made or guaranteed under this section—
shall not count toward the limitations described in subparagraphs (B) and (C) of section 311(c)(1);
shall be considered to be—
an operating loan under section 312 for purposes of section 343(a)(10); and
except as otherwise provided in this section, shall be subject to all applicable provisions of law relating to, as applicable—
The Secretary shall provide to borrowers of development loans made or guaranteed under this section comprehensive training and support addressing farm and ranch management issues.
The training and support provided under paragraph (1) shall address, to the maximum extent practicable—
bookkeeping, taxation, credit, and regulatory compliance; and
cash flow, profitability, and risk management.
The Secretary shall provide training and support under paragraph (1) through—
entities with which the Secretary has entered into a contract under section 359;
entities that receive funding through the beginning farmer and rancher development grant program established under section 2501(d) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(d));
entities that receive funding through the risk management education program established under section 524(a)(2) of the Federal Crop Insurance Act (7 U.S.C. 1524(a)(2)); or
other relevant programs, as determined by the Secretary, including qualified programs that request such a determination.
The Secretary shall—