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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2797 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2797
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.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 15, 2025
Mr. Welch introduced the following bill; which was read twice and
referred to the Committee on Agriculture, Nutrition, and Forestry
_______________________________________________________________________
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Capital for Beginning Farmers and
Ranchers Act of 2025''.
SEC. 2. FINDINGS.
Congress finds that--
(1) beginning farmers and ranchers often pursue business
models featuring diverse and specialized production and
marketing strategies;
(2) diverse and specialized agricultural businesses
typically require substantial early-stage investments which
will benefit the operation for years to come; and
(3) 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.
SEC. 3. BEGINNING FARMER AND RANCHER DEVELOPMENT LOAN PILOT PROGRAM.
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:
``SEC. 320. BEGINNING FARMER AND RANCHER DEVELOPMENT LOAN PILOT
PROGRAM.
``(a) Definition of Development Expenditure.--
``(1) In general.--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.
``(2) Inclusions.--In this section, the term `development
expenditure' includes an expenditure--
``(A) for the acquisition or development of--
``(i) initial assets; or
``(ii) intangible infrastructure;
``(B) to increase long-term soil fertility,
establish perennials, or develop breeding stock;
``(C) to establish an appropriate foundation of
small equipment, tools, or supplies;
``(D) to develop branding and reputation, establish
commercial relationships with suppliers and key service
providers, access new markets, or refine product
offerings;
``(E) to establish a bookkeeping system sufficient
to support invoicing multiple clients and managing
profitability with respect to diverse crops and
livestock;
``(F) to establish payroll and implement legally
compliant labor practices;
``(G) to establish other business management
practices relating to food safety, environmental, or
other regulatory compliance; or
``(H) for such other items as the Secretary
determines appropriate.
``(b) Establishment.--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.
``(c) Terms and Conditions.--
``(1) In general.--Notwithstanding any other provision of
law, a development loan made or guaranteed under this section--
``(A) shall have a repayment term of--
``(i) not less than 3 years; and
``(ii) not more than 10 years;
``(B) may be used only to cover development
expenditures;
``(C) shall not exceed $100,000;
``(D) shall have a collateral requirement of not
more than 100 percent loan-to-value, subject to
paragraph (2);
``(E) shall have an interest rate, determined by
the Secretary, of--
``(i) not less than zero percent; and
``(ii) not more than 3 percent;
``(F) shall require the participating qualified
beginning farmer or rancher to make annual interest
payments for the full amount of interest due; and
``(G) 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.
``(2) Collateral requirement.--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.
``(3) Treatment.--A development loan made or guaranteed
under this section--
``(A) shall not count toward the limitations
described in subparagraphs (B) and (C) of section
311(c)(1);
``(B) shall be considered to be--
``(i) a direct operating loan or a
guaranteed operating loan, as applicable, for
purposes of section 346(b)(2); and
``(ii) an operating loan under section 312
for purposes of section 343(a)(10); and
``(C) except as otherwise provided in this section,
shall be subject to all applicable provisions of law
relating to, as applicable--
``(i) direct operating loans under this
title;
``(ii) guaranteed operating loans under
this title; or
``(iii) farmer program loans.
``(d) Borrower Training.--
``(1) In general.--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.
``(2) Requirements.--The training and support provided
under paragraph (1) shall address, to the maximum extent
practicable--
``(A) bookkeeping, taxation, credit, and regulatory
compliance; and
``(B) cash flow, profitability, and risk
management.
``(3) Provision.--The Secretary shall provide training and
support under paragraph (1) through--
``(A) entities with which the Secretary has entered
into a contract under section 359;
``(B) 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));
``(C) 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
``(D) other relevant programs, as determined by the
Secretary, including qualified programs that request
such a determination.
``(e) Evaluation and Reports.--The Secretary shall--
``(1) evaluate the pilot program established under
subsection (b) on an ongoing basis; and
``(2) biennially submit to the Committee on Agriculture,
Nutrition, and Forestry of the Senate and the Committee on
Agriculture of the House of Representatives a written report
describing the operation and outcomes of the pilot program.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry.
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