Farm loan interest period extended by 60 days: Centre

New Delhi: In a step aimed at providing relief to farmers hit by demonetisation, the Centre on Tuesday gave 60 days more for availing of prompt repayment incentive of 3 per cent to those farmers whose crop loan due dates fall between November 1 and December 31 of this year.

Under the interest subvention scheme, farmers get the short-term crop loan of up to Rs 3 lakh for one year at an interest rate of 7 per cent. Those repaying on time get the loan at 4 per cent.

"It has been decided that an additional grace period of 60 days for prompt repayment incentive at 3 per cent will be provided to those farmers, whose crop loan dues are falling within November 1 and December 2016 and if such farmers repay loan within 60 days," Joint Secretary in Agriculture Ministry Ashish Kumar Bhutani told PTI.

Suppose a farmer has a crop loan to be repaid on November15, that farmer will get 60 days more from the due date to repay the loan and avail prompt repayment incentive of 3 per cent, he explained.

A notification in this regard has been issued, he said. For 2016-17, the government has set a target to disburse agri credit of Rs 9 lakh crore, of which, Rs 7.56 lakh crore credit has been disbursed to farmers till September of this year, as per the ministry's data.

The government's demonetisation move, which pulled out 86 per cent of currency in circulation, has badly affected farmers as they have little cash to buy agri-inputs for winter crops and are even facing hardship in repaying crop loans.

The government has already allowed farmers to buy seeds through old Rs 500 notes from central and state-owned seed companies as well as from ICAR and central varsities. It has also asked the fertiliser companies to sell soil nutrients on credit basis to farmers.