II 119th CONGRESS 1st Session S. 2797 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.

1. Short title This Act may be cited as the Capital for Beginning Farmers and Ranchers Act of 2025 . 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. 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: 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. .