Bank's interest from small loans to farmers will be exempt from sales tax and corporate income tax will be payable only on 90 per cent of the revenue.

"The continued preferential policy is critical to food security, increasing farmers' incomes and modernising the sector," a statement released after a cabinet meeting chaired by Chinese Premier Li Keqiang said.

The meeting decided that small loans will be between 50,000 to 100,000 yuan, instead of less than 50,000 yuan as was previously the case.

Insurers' premium revenues from crop and husbandry insurance will enjoy a 10 per cent discount in calculating payable corporate income tax.

The three per cent discount on sales tax payable by county-level financial institutions from insurance is to be extended to the end of 2016.