S. 2797: Capital for Beginning Farmers and Ranchers Act of 2025

This bill, known as the Capital for Beginning Farmers and Ranchers Act of 2025, aims to establish a pilot program to support new farmers and ranchers by providing development loans and loan guarantees. Here’s a breakdown of what the bill proposes:

Objectives of the Bill

• The bill recognizes that new farmers and ranchers often require significant investment for their diverse and specialized agricultural businesses.
• It acknowledges that existing funding programs typically offer annual operating loans, which can limit their ability to make essential long-term investments.

Development Loan Pilot Program

The bill seeks to create a development loan pilot program under the Consolidated Farm and Rural Development Act. Key features of this program include:

Definition of Development Expenditure

Development expenditure is defined as a capital investment that benefits a farming or ranching business for longer than one year. Examples of permissible expenditures include:

• Acquisition or development of initial assets and intangible infrastructure.
• Investments to improve soil fertility, establish perennials, or develop breeding stock.
• Establishing small equipment, tools, or supplies.
• Branding, market access, and refining product offerings.
• Setting up systems for bookkeeping, payroll, and legal compliance.

Program Establishment Timeline

The Secretary of Agriculture is required to set up the pilot program within two years of the bill's enactment.

Loan Terms and Conditions

Loans made or guaranteed under this program would have specific terms and conditions, including:

• A repayment term of three to ten years.
• A maximum loan amount of $100,000, to be used strictly for development expenditures.
• An interest rate ranging from 0% to 3%.
• Requirements for annual interest payments and flexible principal repayment options.

Collateral Requirements

The collateral requirement for these loans may be adjusted based on the borrower's farming or ranching experience.

Training and Support for Borrowers

The Secretary will provide comprehensive training and support for borrowers focused on farm and ranch management, which would include:

• Topics such as bookkeeping, taxation, credit, and regulatory compliance.
• Guidance on cash flow, profitability, and risk management.

Program Evaluation and Reporting

The Secretary will evaluate the pilot program regularly and submit biannual reports to Congress detailing its operation and outcomes.

Relevant Companies