Date for farm loan repaying to be extended by 2 months

The decision has been taken to address the difficulties of farmers in repaying because of demonetisation

The government is set to extend the time frame for repayment of all crop loans which are due in November-December by two months.

The decision, expected to be notified soon, has been taken to address the difficulties of farmers in repaying because of demonetisation.

Officials said farmers who repaid with a delay of two months would continue to get the benefit of the 4% subsidy on interest for timely payment; the normal interest of 7% won't be charged.

Most repayments of short-term crop loans for which interest subsidy is available are usually made from November, as farmers usually have cash at that time from the kharif harvest.

The Centre has targeted Rs 8,50,000 crore of crop loans in 2016-17. It has kept a budget of around Rs 15,000 crore for interest subsidy on these. The Centre gives a subsidy of 4% on the interest on timely repayment, which brings down the effective rate to around 3% for farmers.

Earlier, the government had said farmers would be allowed to buy seeds with old currency notes from any state or central government outlets and from agricultural universities, ahead of the rabi harvest. Farmers may buy the seeds from centres, units or outlets of central or state governments, public sector undertakings, national or state seed corporations, central or state agri universities and the Indian Council of Agricultural Research, on showing proof of identity.