Capital for Beginning Farmers and Ranchers Act of 2025
H.R. 5367, the Capital for Beginning Farmers and Ranchers Act of 2025, would create a pilot program under the Consolidated Farm and Rural Development Act to provide development loans or loan guarantees to qualified beginning farmers and ranchers. The aim is to finance long-term, capital-style investments that help new farmers build durable operating capacity—beyond ordinary annual operating costs. The program emphasizes lower financial barriers (low interest, longer terms, smaller loan size) and requires borrower training on bookkeeping, taxes, cash flow, and compliance. A formal evaluation and biennial reporting to Congress would assess how the pilot operates and its outcomes. The bill would establish the program within two years of enactment, define what counts as a development expenditure, and set specific loan terms (up to $100,000, 3–10 year term, 0–3% interest, flexible repayment with at least 1% of remaining balance due annually). It would allow loans to be direct USDA loans or loan guarantees and would treat these loans as operating loans for related statutory purposes. It also mandates training for borrowers through existing USDA and related programs and requires ongoing evaluation and reporting to Congress.
Key Points
- 1Creation of a Beginning Farmer and Rancher Development Loan Pilot Program under the CF&RD Act, focused on capital development expenditures that benefit a farming or ranching business for more than one year.
- 2Definition of development expenditures, including: acquisition or development of initial assets or intangible infrastructure; improving soil fertility; establishing equipment, branding, markets, and supplier relationships; setting up bookkeeping, payroll, and compliant labor practices; and implementing food safety and regulatory practices.
- 3Loan terms and limits: development loans may be used only for development expenditures, with a maximum loan amount of $100,000, a repayment term of 3–10 years, and an interest rate between 0% and 3%. Collateral can be up to 100% loan-to-value, though lenders may reduce collateral based on borrower experience.
- 4Payment structure: borrowers must make annual interest payments on the full amount of interest due, and principal repayment must be flexible with at least 1% of the remaining balance due each year.
- 5Direct loan or guarantees: the program may provide direct development loans or loan guarantees and is treated for related purposes as either a direct/guaranteed operating loan under existing CF&RD provisions.
- 6Borrower training and support: the Secretary must provide comprehensive training addressing bookkeeping, taxes, credit, cash flow, profitability, risk management, and regulatory compliance, delivered through specified USDA programs or other appropriate partners.
- 7Implementation and reporting: the Secretary must establish the pilot within two years of enactment and must evaluate the program ongoingly, with biennial reports to the Senate Committee on Agriculture, Nutrition, and Forestry and the House Committee on Agriculture detailing operation and outcomes.