March 21 (Bloomberg) -- China told commercial banks to offer emergency loans and restructure debt for poultry farmers whose business was hurt by bird flu outbreaks in the past year, said people with knowledge of the matter.
The People’s Bank of China said in a notice dated March 10 that banks should extend the term of loans due between Dec. 1, 2013 and June 30 by as much as one year if farmers can’t repay, said the two people, who asked not to be identified because they weren’t authorized to discuss the matter publicly.
Outbreaks of the H7N9 bird flu virus caused 20 billion yuan ($3.2 billion) of losses in January as consumption fell, according to the China Animal Agriculture Association. More than 500,000 birds were culled in part of Yunnan province, with tens of thousands more culled in Hebei province and Hong Kong.
According to the PBOC notice, local banks should also help poultry producers that are short of cash with loans of as long as two years, said the two people. They said other steps include setting up a loan-risk mechanism to compensate financial institutions for loan losses in the industry, said the two people.
The central bank’s media office didn’t immediately respond to faxed questions seeking comment.