Lending to farmers who benefit from their crops
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Fatwa number ( 11600 )
Q: I own transport vehicles, and we have people who are farmers with fruits. I give them sums of money on the condition that I transport these fruits from their farms to the market for a specific fee. I transport these fruits to the wholesaler who sells them, and he takes his selling fee at a specific percentage, which is around 8% (eight percent) commission on the sale. As for me, my fee is deducted at the rate of my peers, for example, one pound per shipment according to the agreement. Knowing that the wholesaler who sells this fruit gives me a sum of money as an advance, and at the end of the season he gives me a share of the 8% commission to encourage me to bring the fruits to him for sale. Knowing that the amounts I give to the farmers are deducted from their accounts as they are; for example, if one of them took 200 pounds and his revenue was 250 pounds, we pay him the remainder immediately. If his revenue did not cover the 200 pounds, the remainder remains his debt for the next year. What is the ruling in this matter: Do we take only the transport fee? Do I take a share of the 8%? Is this entire system wrong? Please inform us, knowing that we pay these amounts from month 12 and the harvest is from month 7 to 11. For your information, I am confused about this matter,
and may Allah reward you with good .
A: Giving the farmers sums of money as a loan on the condition that they allow you to transport their agricultural produce is a loan that yields benefit, and this is not permissible. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Q: I own transport vehicles, and we have people who are farmers with fruits. I give them sums of money on the condition that I transport these fruits from their farms to the market for a specific fee. I transport these fruits to the wholesaler who sells them, and he takes his selling fee at a specific percentage, which is around 8% (eight percent) commission on the sale. As for me, my fee is deducted at the rate of my peers, for example, one pound per shipment according to the agreement. Knowing that the wholesaler who sells this fruit gives me a sum of money as an advance, and at the end of the season he gives me a share of the 8% commission to encourage me to bring the fruits to him for sale. Knowing that the amounts I give to the farmers are deducted from their accounts as they are; for example, if one of them took 200 pounds and his revenue was 250 pounds, we pay him the remainder immediately. If his revenue did not cover the 200 pounds, the remainder remains his debt for the next year. What is the ruling in this matter: Do we take only the transport fee? Do I take a share of the 8%? Is this entire system wrong? Please inform us, knowing that we pay these amounts from month 12 and the harvest is from month 7 to 11. For your information, I am confused about this matter,
and may Allah reward you with good .
A: Giving the farmers sums of money as a loan on the condition that they allow you to transport their agricultural produce is a loan that yields benefit, and this is not permissible. And success is from Allah, and may Allah send prayers and blessings upon our Prophet Muhammad, his family, and his Companions.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.