Congress quietly expands farm loan forgiveness and shifts power from USDA to borrowers

What it does

This bill provides emergency relief to struggling farmers by deferring farm loan payments for 2 years, reducing interest rates to 0.125% during that period, and waiving guarantee fees for certain borrowers. It also reforms how the USDA denies farm loans and appeals, requiring clearer explanations of denials, limiting when homes can be seized as collateral, and shifting the burden of proof to the government in appeals for smaller farms (under $300k income).

Why we flagged it

The bill's core function is to provide emergency payment relief and interest reduction to distressed farm borrowers, combined with structural reforms to USDA loan denial and appeals processes. It is not primarily a tax measure, subsidy, or deregulation—it is targeted borrower assistance and procedural fairness.

What the text implies

• The 2-year payment deferral and interest reduction may delay USDA revenue collection and increase long-term loan portfolio risk if farm conditions do not improve after the deferral period ends.
• The burden-of-proof shift in appeals (agency must prove error for sub-$300k farms) may increase USDA appeals workload and reverse some prior denials, creating retroactive liability exposure.
• Removal of debt write-down eligibility restrictions may allow previously ineligible borrowers to refinance, potentially concentrating risk in the USDA loan portfolio.
• The requirement that USDA provide detailed denial reasons and cite specific regulations may reduce discretionary denials but could also invite more appeals and litigation.
• Partial release of home collateral when other assets reach 100% loan value may reduce USDA security position and increase default risk on remaining loans.

Who it affects

Ordinary farmers—especially beginning, limited-resource, socially disadvantaged, and veteran farmers—gain direct relief through payment deferral, lower interest, and fee waivers. Procedural reforms increase transparency and fairness in loan denials and appeals, protecting borrowers from arbitrary government action. The burden-of-proof shift favors smaller farms in disputes with the USDA.

Who stands to gain

• farm borrowers (direct relief)
• agricultural lenders (guaranteed loan fee waiver reduces their cost)
• beginning and limited-resource farmers (primary targets)

Named in the bill

USDA Farm Service Agency, Secretary of Agriculture, National Appeals Division, Consolidated Farm and Rural Development Act, Department of Agriculture Reorganization Act of 1994, Federal Agriculture Improvement and Reform Act of 1996, FMAO (Farmland Partners Inc.), TSCO (Tractor Supply Co.), FBK (Farmers & Merchants Bancorp), AIG (American International Group)

Where it stands

2 cosponsors: 2 Democrats.

• Nov 6, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Nov 6, 2025 — Referred to Senate Committee on Agriculture, Nutrition, and Forestry · Congress.gov: “Read twice and referred to the Committee on Agriculture, Nutrition, and Forestry”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Mar 2026 to Mar 2026. Those filings disclosed $10,000 in lobbying spend. A filing names 3 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 0% of bills with at least one filing.

Peter Welch, the sponsor, reported $44,000 in PAC receipts in the 2026 cycle.

• Confederated Tribes of the Warm Springs Reservation of Oregon — $10,000 on 1 filing

Lobbying Disclosure Act filings through May 18, 2026. A filing shows who paid to lobby on a bill it names, not what changed.