The benefit is available to farmers who have been prompt in repaying the loans availed from co-operative institutions.
Cooperation Minister Lakshman Savadi said here on Wednesday that the reimbursement will be credited directly to the bank accounts of the beneficiaries.
The government is presently advancing crop loans at three per cent interest. With the Centre’s decision, the effective interest will come down to one per cent. An estimated 13 lakh farmers would benefit from the move in the State, the minster told reporters.
The Centre has announced to reduce the interest by two per cent for the farmers who are repaying the loan on time from fiscal 2010-11. It is charging six per cent interest on its crop loans.
The Centre has agreed to extend the benefit to farmers of the State who have availed loans at three per cent.
The state government has disbursed crop loan to the tune of Rs 2,434 crore so far during the current fiscal. About 90 per cent of the farmers have been repaying the loan on time.
The state government has launched two new insurance schemes - personal and vehicle - for the benefit of farmers who would avail crop loans. Under the personal scheme, a farmer need to pay only Rs 40 as premium per annum.
In case of death or physical damages, the insurance company will pay the entire amount of crop loan.
Besides, the farmer will get one time amount of Rs 5,000 for his or her children’s education, Rs 5,000 for wedding expenses in case of daughters, Rs 15,000 for household expenses and Rs 15 for running the family.
Farmers who avail loans to buy tractors will be insured with an annual premium amount of Rs 1,900, the Minister said.
The Co-operation department is holding 57th All India Co-operation Week from November 14 to 20. “Addressing Climate Change through Co-operatives” will be the theme of the Co-operation Week, he added.