Mumbai: The Reserve Bank on Monday said farmers will get loan at concessional rates for an additional period of up to six months post-harvest, a step aimed at encouraging storage of farm produce in warehouses.

"In order to discourage distress by farmers and to encourage them to store their produce in warehousing against warehouse receipts, the benefits of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of up to six months post harvest ...," it said.

At present, concessional crop loan at 7 percent with interest rate subsidy is available to farmers as pre-harvest loan.

The RBI also asked banks to "immediately" submit their estimates of short-term production credit to farmers for up to Rs 3 lakh during the year 2011-12, to enable it to provide government with an estimate of the likely amount of subsidy.

The government has raised the subsidy for timely repayment of crop loans to 3 percent for 2011-12, thus making the effective rate of interest for such farmers to 4 percent per annum.

(Agencies)