H.R. 5367 — Capital for Beginning Farmers and Ranchers Act of 2025

This section sets forth congressional findings that (1) beginning farmers and ranchers often pursue diverse and specialized production and marketing strategies; (2) such businesses typically require substantial early-stage investments benefiting operations for years; and (3) programs as of 2025 finance multi-year investments as annual operating loans, causing under-investment in start-up capacities, limiting working capital accumulation, and increasing difficulties in meeting loan terms.

This section establishes a pilot program, to be implemented not later than two years after enactment, under which USDA makes or guarantees development loans of up to $100,000 to qualified beginning farmers and ranchers for capital investments benefiting their operations for more than one year (i.e., development expenditures such as acquiring initial assets or intangible infrastructure, improving soil fertility or breeding stock, buying small equipment, developing branding or markets, establishing bookkeeping or payroll systems, or ensuring regulatory compliance). Loan terms include a 3-to-10-year repayment period, collateral of up to 100% loan-to-value (reducible based on borrower experience), an interest rate of 0% to 3%, required annual interest payments, and flexible principal repayment with at least 1% of remaining balance due annually. Such loans do not count toward aggregate service limits for direct or guaranteed farm operating loans; are treated as operating loans for debt deferral and other specified purposes; and otherwise follow applicable law for farmer program loans. The section requires USDA to provide comprehensive borrower training on farm management topics (e.g., bookkeeping, taxation, cash flow, and risk management) through partnerships such as those funded by the beginning farmer and rancher development grant program (7 U.S.C. 2279(d)) or the risk management education program (7 U.S.C. 1524(a)(2)). USDA must evaluate the pilot on an ongoing basis and submit biennial reports to the agriculture committees of Congress on its operation and outcomes.