Farmers get 60 days more to repay crop loans due in Nov-Dec

In a bid to provide relief to farmers hit by cash crunch, the government today gave them an additional two months to repay their crop loans due in November-December period and said that prompt repayment would be eligible for the extra 3 per cent interest subsidy.
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.
"Appreciating the requirement for some more time by the farmers to repay their loan dues, the government has...Decided to provide an additional grace period of 60 days to such of the farmers, whose crop loan dues fall due between November 1 and December 31, 2016.

"...If such farmers repay the same within 60 days with effect from the date on which the repayment was due, they will be eligible for prompt repayment incentive for 2016-17," an official statement said.
Following the recent demonetisation of Specified Bank Notes (SBNs), the government said it is "seized of the constraints faced by the farming community in repayment of loan dues within the prescribed time-limit."
The government provides crop loans at subvented interest rate of 7 per cent per annum. An additional incentive of 3 per cnet 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 at 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.

"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 November 15, 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 had 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 had also asked the fertiliser companies to sell soil nutrients on credit basis to farmers.