119-s2797

[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.''.
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