New Delhi, Mar 9 (UNI) The rate of interest on crop loans up to a principal amount of Rs three lakh has been reduced to seven per cent per annum from kharif 2006-07, Minister for Agriculture Sharad Pawar said today.

Besides, the government has put in place a comprehensive policy for providing timely and adequate credit support to farmers so that they can adopt modern technology and improve agriculture practices, he told the Rajya Sabha.

The policy includes following provision to assist farmers: One, debt restructuring in respect of farmers in distress and those in arrears providing for rescheduling of outstanding loans over a period of five years including moratorium of two years, making all farmers eligible for fresh credit.

Two, banks are allowed to advance loans for redeeming the loans taken by farmers from private money lenders.

And three, simplified credit delivery mechanism through refinement of kisan credit card scheme.

Mr Pawar said the National Agricultural Insurance Scheme is also under implementation to protect farmers against crop losses suffered due to natural calamities.

Comprehensive risk insurance is provided to cover yield loss due to non-preventable risks like natural fire and lightening, storm, hailstorm, cyclone, typhoon, tempest, hurricane, tornado, flood inundation and landslide, drought, dry spells, pests and diseases, said the Minister during Question Hour.

The government had earlier announced a rehabilitation package of Rs 16,978.69 crore for 31 districts worst affected by farmers' suicides, he added.

UNI