Centre has decided to provide additional grace period of 60 days to farmers, whose crop loan dues fall between 1st of November and 31st December, 2016.

Agriculture Ministry said, the decision was taken in view of the constraints faced by the farming community in repayment of loans due to demonetization of high value notes.

The Ministry said, if such farmers repay the loan 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.

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.

The Government provides crop loans at subvented rates of interest at 7 per cent per annum, with a view to provide stimulation to the rural sector and farming community.

An added incentive of 3 per cent per annum is provided to the farmers for prompt repayment of loans within due date and upto a maximum period of one year.