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

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

This section establishes a pilot program in the Consolidated Farm and Rural Development Act to make or guarantee 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), including initial assets or intangible infrastructure; long-term soil fertility, perennials, or breeding stock; small equipment or tools; branding, market access, or product refinement; bookkeeping, payroll, or compliance systems; and other items determined appropriate by the Secretary of Agriculture. The loans have a repayment term of 3 to 10 years; collateral of not more than 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. The loans do not count toward certain operating loan limitations; are treated as direct or guaranteed operating loans for specified purposes; and otherwise follow applicable law for such loans. The Secretary must provide comprehensive borrower training on farm management (e.g., bookkeeping, taxation, cash flow, risk management) through partnerships such as those under 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)). (Thus, the pilot leverages existing outreach infrastructure for new producers.) The Secretary must evaluate the pilot ongoing and submit biennial reports to the agriculture committees of Congress. The program must be established not later than two years after enactment.