Farmers get 60 days more for crop loan repayment

Farmers whose crop loan dues fall between 1 November and 31 December have been granted 60 days more for payment of such dues. Farmers can now pay their crop loan dues within 60 days of the respective due dates of loan repayment, an official statement stated on Tuesday.

Farmers will also be eligible for prompt repayment incentives for 2016-17 provided the loan dues are paid within the additional grace period of 60 days, the statement said.

''Following the recent demonetisation of Specified Bank Notes (SBNs) the government is seized of the constraints faced by the farming community in repayment of loan dues within the prescribed time limit. Appreciating the requirement for some more time by the farmers to repay their loan dues, the government has on the lines of RBI circular dated 21 November 2016 decided to provide an additional grace period of 60 days to such of the farmers, whose crop loan dues fall due between 1 November 2016 and 31 December 2016 and if such farmers repay it within 60 days  from the date on which the repayment was due, they will be eligible for a prompt repayment incentive for 2016-17,'' the statement said.

''With a view to provide stimulation to the rural sector and farming community, the government provides crop loans at subvented rates of interest @ 7 per cent per annum at the ground level. An added incentive of 3 per cent per annum is provided to the farmers for prompt repayment of loans within due date and up to a maximum period of one year. The prompt payee farmers in effect avail short term crop loans @ 4 per cent per annum. This prompt repayment incentive, however, does not accrue to those farmers who repay after one year of availing such loans,'' the release added.

Currently, the government provides an interest subvention of up to 3 per cent for prompt repayment of crop loans over and above an already subvented interest rate of 7 per cent per annum. Such incentives are provided to farmers if loans are repaid within the due date and within a maximum period of one year.

Such farmers can, in effect, avail themselves of short-term crop loans at 4 per cent per annum. The prompt repayment incentive, however, does not accrue to farmers who repay after one year of taking such loans.