The Pakistan Development Review
35 : 4 Part II (Winter 1996) pp.
Riba, Share-tenancy and Agrarian Reforms
SAYYID TAHIR
Land tenureship may take the form of self-cultivation, contractual workers, leasing
and partnership. This paper focuses on the last one known as muzara`ah or share-tenancy.
After clarifying what riba stands for, it reviews the misgiving about share-tenancy as a case
of riba. It also argues at length in favour of share-tenancy as a legitimate mode of land tenure
in Shari`ah. Finally, it also draws attention to some reforms to ameliorate the negative aspects
of share-tenancy arrangements currently in vogue.
Developing countries are predominantly agricultural economies. The main
contractual relation between owners and tillers of land is not an employer-employee
but a landlord-tenant bond. Notwithstanding some informal patronage by land-owners,
the form of compensation is sharecropping in which tenants usually fare poorly. The
control of landlords over lives of tillers grows through indebtedness of the latter to the
former. This indebtedness is passed on from generation to generation. Thus practically
many peasants become serfs.
Marxism championed the cause of workers over the past one hundred years or
so. The battle cry was wresting away the ownership of land from landlords, supposedly
a solution of the problem at its source. Logical consistency necessitated extension of
the same principle to other sectors of economy, in particular, industry. The experience
of the Eastern Europe, since the Bolshevik revolution in Russia, has effectively closed
the chapter on the socialist remedies.
The exploitation theme in moral and social philosophy is rooted in the widelyheld view that all rewards should be associated with work effort. In the case of riba
(interest), owners of capital assets claim return without playing any active role in
productive application of those assets. Thus riba is also treated as synonymous with
exploitation. Of course, in the Islamic literature this view is also rationalised on the basis
of interpretation of selected Ayat and A`hadith. Since a share-tenancy arrangement also
involves a sleeping partner, it is not surprising that some Shari`ah scholars regard the
share-tenancy arrangement a riba case [Tasin (1988)]. If this were indeed so, the case for
share-tenancy closes without further ado: it has to be treated as a void contract neither
negotiable nor enforceable. An immediate implication of this conclusion is narrowing
the list of options for land cultivation in Muslim countries such as Pakistan.
The author is Professor of Economics at the International Institute of Islamic Economics,
International Islamic University, Islamabad.
Author’s Note: I wish to thank Salman Syed Ali and Atif Waheed for their useful comments on an
earlier draft of this paper.
Sayyid Tahir
Less attractiveness of investment in farm land, and thereby agriculture in general, would
be another. These factors call for a systematic review of the subject. Such a study is also
warranted in view of the debate on riba triggered by the landmark judgement of the
Federal Shariat Court of Pakistan given in 1991. The issues discussed in this paper may
gain added significance when the Shariat Appellate Bench of the Supreme Court of
Pakistan starts a review of the said judgement and gives its verdict on it.
The line of argument in this study is as follows. We first try to settle whether
one is justified in equating share-tenancy with a riba arrangement, and then go on to
look at some reforms necessitated by the A`hkam (edicts) on riba and zakah in order to
eliminate exploitation from the existing land tenure system. The riba appraisal is
divided into two parts: genesis of riba (section I) and the status of share-tenancy in this
regard (section II). It is clarified that riba may lead to exploitation and injustice or zulm
but zulm per se is not the raison d'être of riba. It is also argued that the edicts on riba
are irrelevant for the Shari`ah legitimacy of the share-tenancy contract. Our analysis
also helps us to sharpen the focus on policy measures for reforming production and
other relations in agriculture (section III).
I. THE GENESIS OF RIBA
Riba is traditionally viewed as a predetermined and fixed return claimed by
lenders on loans while they do not share in the concerns and/or efforts at the borrowers'
end. Of course, at the time of the prohibition of riba fourteen centuries ago, one finds
instances of borrowing for trade but loans were mostly sought by those in want and
dire need. The final Qur’anic decree on riba (al Baqarah 2: 278-281) also states that
neither creditors do zulm on debtors nor the latter do the same to the former. This has
tempted many scholars to claim that the rationale behind the prohibition of riba is an
end to exploitation of the weak and poor [Saeed (1995)].
If one reads “landlord”, “tenant” and “land” in place of lender, borrower and the
object of loan, respectively, in the foregoing description, the similarities tempt one to
view the reward claimed by absentee landowners in all landlord-tenant arrangements as
riba. This reward may be in the form of either land rent or a fixed share in crops. The
former corresponds to a rental agreement and the latter to a share-tenancy contract. This
paper focuses on share-tenancy arrangements, the dominant mode for landownership
and cultivation. The case of renting land is also addressed but in passing.
While earlier jurists questioned share-tenancy arrangements (muzara`ah or
mokhabarah) on the basis of the A`hadith on the subject, many scholars challenge
them on grounds that they represent a case of riba. The views of Tasin (1988), as
mentioned above, and Ziaul Haque (1977) are examples of this thinking. It is,
therefore, desirable to start the argument with an analysis of what riba stands for and
what it does not.
In the Qur’an, the decrees on riba primarily call for the execution of all loan
Riba, Share-tenancy and Agrarian Reforms
transactions on a one-to-one and equal basis in terms of the units of the thing given and
taken back [Tahir (1996a)]. This being the case, it is pertinent to form any opinion
about riba in the light of the nature of a loan transaction. A loan is a legal contract
between a lender and a borrower. It has three distinguishing features:
1. Both the ownership and usufruct of the object of loan, are transferred to the
borrower during the pendency of loan.
2. A loan involves exchange, i.e., give and take back, of items of the same kind.
For example, if rupees were lent, rupees would be taken back.
3. The lender is not a party to use of the object of loan until it remains in the
possession of the borrower.
The above points apply to all loans, whether in money or commodity form. The first
feature signifies what a loan transaction helps to achieve. The second and third features
are generic properties of a loan transactions. Keeping in view these two properties and
the basic edict on riba, it may be defined as follows:
Riba is a discrepancy which results from the contractual obligations of a
party in the context of a direct exchange of items of the same general kind
between two parties.
[Tahir (1994, p.3)]
In our definition, the words “discrepancy”, “contractual obligations” and “direct
exchange of items of the same general kind” are noteworthy. The notion of “direct
exchange” stems from homogeneous character of the exchange involved in a loan
transaction. The emphasis on “direct exchange” and also the idea of “items of the same
general kind” are best explained in a well-known `Hadith according to which the
Prophet (SAAWS - _allAllaho `alaihay wasallam) advised Sayyidena Bilal as follows.
If the latter wanted to trade poor quality dates directly with good quality dates, he ought
to have exchanged them in equal amount (by measure) while, of course, ignoring the
qualitative differences between the two types of dates. However, if the said
arrangement was not practicable, he should have sold poor quality dates for something
else and buy good quality dates with the sale proceeds, i.e., acquire good quality dates
on unequal terms but indirectly.
The idea of “contractual obligations” may be verified by noting that a lender can
accept something over and above the principal of a loan provided it is given by the
borrower voluntarily after discharging his debt obligations.
The concept of “discrepancy” is slightly at variance with the traditional view of
riba as an excess. While “discrepancy” covers the case of an excess, it also applies to
such cases in which debtors seek early settlement of debts on concessional terms. That
is, in principle, Shari`ah recognises the principal of a loan (or, debt in a credit sale) as
contractual obligation of the indebted party; but while the lender cannot claim an
Sayyid Tahir
excess over and above his principal, the debtor too cannot claim a reduction while
retiring it. Last but not least, it can be said that the above definition also covers other
types of “discrepancy” as well, including that due to time factor.
The above definition also implies some adjunct guidelines for transactions. This
point may be seen as follows. While the lender in a loan transaction is restricted to his
principal, practically he is called upon to concede his lending costs, the costs in terms
of income foregone and loan recovery costs. If these costs are taken into account, the
Qur’anic prohibition of riba may be seen to contain two auxiliary decrees for those who
choose to enter into a loan transaction [Tahir (1995), pp.5-6].
(a) The lender must concede his lending costs.
(b) The qualitative differences between the sum lent and that taken back must be
conceded.
These points can be generalised to see that the edicts on riba in `Hadith bring the
trading practices into line with the Qur’anic A`hkam. A modern-day equivalent of such
cases is trading of new currency notes for old ones by money changers, for example.
The said A`hadith also imply, for example, that exchange of old jewellery for new by a
jeweller must be without the latter applying a cut. To sum up, the edicts on riba
regulate lending as well as all other exchanges that are generically comparable to loan
transactions.
Before we appraise share-tenancy from the riba angle, it is also worthwhile to
see if there is any link between riba and exploitation or not. More specifically, we
would like to establish whether or not "exploitation" is an overriding consideration in
order to determine the existence of riba. The relevant questions in this regard are as
follows. (1) Does the prohibition of riba have a moral and ethical context, namely an
end to exploitation? (2) Can one interpret the last Qur’anic decree on riba to conclude
that indeed the aim of the prohibition of is an end to exploitation of the poor and the
needy? While detailed argument on these issues is available elsewhere [Tahir (1996a)],
a few directly relevant points are as follows.
No doubt Islam places the greatest emphasis on moral ethos of an Islamic
economy, nevertheless the prohibition of riba is a part of the parameters set by Allah
(SWT - Sub`hanahu wa Ta`aala) for this life as a test for man. Its status is like that of
salah (prayer), saum (fasting), zakah (a religious levy) and `hajj (pilgrimage), for
example. Each of these is beneficial for mankind. But the A`hkam of Allah SWT are
primarily based on His Discretion, not the welfare of mankind.
As mentioned earlier, the end-of-exploitation rationale behind the prohibition of
riba is often traced to al Baqarah 2:279. This Ayah is part of the text al Baqarah
2:278-281 revealed sometime in 9 or 10 A.H. (After Hijrah). While the then lenders
were restricted to their principals in al Baqarah 2:279, both the lenders and the
borrowers were directed to avoid zulm. According to Shari`ah, zulm occurs when any
Riba, Share-tenancy and Agrarian Reforms
party to a transaction is denied its rights recognised by Shari`ah. Thus when in 9 or 10
A.H. both the creditors and their debtors were called upon to avoid zulm, it only meant
adherence to the edicts in force at that time. Those A`k_m are undoubtedly in Aale
`Imran 3:130 and al Baqarah 2:275 which read as follows.
O Believers! Don't eat riba on top of riba1 And be afraid of Allah so
that you may be successful. (Aale `Imran 3:130)
Riba-eaters will get up on the Day of Judgement like a person driven to
madness by the Shaitaan (Devil) with his evil touch. This will happen
because of their claim that (profit on) bay` or trading is the same as
riba whereas Allah has permitted bay` but prohibited riba.
As to riba charged in the past, whoever received the advice from
his Rabb (as per Aale `Imran 3:130), his matter is with Allah. That
subject should be treated as closed in this world. However, all those
who continue to charge riba in lieu of the outstanding debts, they
belong to Jahannam (Hell) where they will stay for good. (al Baqarah
2:275)
The first Ayah decreed in late 3 A.H. that the believers ought to avoid riba. The second
Ayah, revealed soon after the first, clarified that the then existing riba-based contracts
were to be honoured after deleting the riba clauses in them. On both occasions, the
A`k_m are without the so-called `no zulm' proviso or its equivalent.
That attributing the end-of-exploitation rationale to the prohibition of riba is
unwarranted may also be seen as follows. First, like all other exchanges, loan
transactions are voluntary. The A`hkam on riba simply state how a person is required to
act if he chooses to enter into the framework of loan transactions. Second, as noted
above, lenders are invariably exposed to many costs. In other words, if indeed end-ofexploitation were the rationale behind the prohibition of riba, then lenders would have
been allowed some sort of compensation in the framework of loans as in other
transactions. Finally, as noted earlier, loans are essentially a legal contract which
involves temporary transfer of property rights, ownership and usufruct, from one party
to another; the A`hkam of riba just signify the terms for executing such exchanges and
nothing more. In this background, we can now review the status of the share-tenancy
arrangement from the point of view of riba.
II. RIBA AND SHARE-TENANCY
According to Tasin (1988, pp.76-8), the matter of muzara`ah or share-tenancy is
1
The literal translation would be: “Don’t feast on riba—doubled and quadrupled.” In either case, the
order is to stay away from riba irrespective of whether it is simple or compound.
Sayyid Tahir
quite similar to that of riba on account of its nature and implications. Thus, in his view,
the Qur’anic decrees on riba apply to muzara`ah as well. To support his point of view,
he cites the A`hadith of Jabir Ibn Abdullah in al Mustadrak of Imam `Hakim, Raf`ay
Ibn Khudaij in Sunnan Abu Dawood and Miswar Ibn Makhramah in Mo'jamm al Aoust
of Imam Tibrani. He also draws support for his view from commentaries on the Qur'an
by Ibn Katheer and Qurtubi, two great exegetes of all time. While we look into likely
explanations of the aforementioned A`hadith later on, it is pertinent to start the
argument on the following note.
According to a `Hadith of Fudalah Ibn `Obaid reported in both Sahih Muslim
and Sunan Abu Dawood, the Muslims were trading an ouqiyyah, a weight measure, of
gold for two or three dinars, pure gold coins, with the Jews after the conquest of
Khyber. The Prophet (SAAWS) directed them to carry out the said exchanges on the
basis of equality in terms of weight. Several A`hadith on riba confirm that the practice
in question was in conflict with the A`hkam on riba and, therefore, corrected by the
Prophet (SAAWS). This `Hadith makes it abundantly clear that riba dealings with the
Jews were non-permissible at the time. This point is important for correctly appraising
the land cultivation arrangement made with the Jews about the lands of Khyber.2 With
the conquest of Khyber, its lands became property of the Muslims. The Prophet
(SAAWS) permitted the Jews to till those lands on the condition that the crops and fruits
would be shared with the Muslims on a 50:50 basis, a share-tenancy arrangement for
all practical purposes. Given the forbiddance of riba dealings with the Jews, had the
said tenancy arrangement been a case of riba, there was no question of the Prophet
(SAAWS) sanctioning it. In other words, treating share-tenancy as a riba-based
transaction is putting the argument on a wrong footing. In fact, edicts on riba are not
relevant for Shari`ah appraisal of share-tenancy.
All transactions may be seen as controlling ownership rights and/or access to
usufruct of the object(s) of exchange. For example, trading represents a case of
irrevocable reciprocal exchange of all property rights, both ownership and usufruct,
between the trading parties. Leasing is a case in which ownership is not transferred but
only usufruct rights go to the lessee, and those too for the duration of contract. In this
perspective, share-tenancy represents an arrangement whereby ownership rights and
usufruct of land are not transferred but shared with another party for the duration of
contract. On the other hand, as explained above, riba arises when property rights of an
asset are fully transferred from the owner to another party during the pendency of
contract. Thus there is no point in appraising share-tenancy on riba grounds.
If the riba factor is not relevant, then, apart from the issue of exploitation of
tenants to which we shall return later on, is there anything fundamentally wrong with
the share-tenancy contract? No. It addresses genuine needs and concerns of landowners
2
The details on this subject may be found in Usmani (1413 A.H., pp.171-72).
Riba, Share-tenancy and Agrarian Reforms
when they may not be able to till the land themselves and they may also not have a
recourse to an alternative arrangement. For example, hiring and managing workers may
be difficult, and renting land too may be infeasible. Its relevance can be seen in two
simple examples. A minor or a widow may inherit a piece of land which may be their
sole asset. Obviously they may not be able to manage “their” lands themselves. Does
Shari`ah close all options for them to benefit from their assets? Likewise, imagine a
landowner going for `hajj several centuries ago. The travel to Makkah and back home
required good part of a year or even more in the case of far-off places. Was this person
to leave his land fallow? Given that the Qur’an permits pilgrims to seek economic
bounties on the way to `hajj (al Baqarah 2:198), is he denied the chance to make a
gainful arrangement in respect of land left behind? These are just two instances to
establish that in principle there is nothing wrong with the share-tenancy contract as
such. It is a perfectly legal contract provided, of course, that the stipulated conditions
meet all relevant Shari`ah rules.
The available contracts against which one can put share-tenancy and derive the
necessary A`hkam may be either renting/leasing (ijarah) or partnership (modarabah or
musharakah). As mentioned above, in a leasing contract only usufruct is transferred;
the ownership is neither transferred nor shared. This leaves us with the option of
viewing share-tenancy as a partnership. Two possibilities in this regard are as follows.
(a) If the arrangement involves the landowner providing land, seeds, tools and
other inputs and the tenant just his labour, this would be the pure case of
modarabah.
(b) If the contract is such that the tenant assumes the responsibility for arranging
seeds, tools and some other inputs, this would be musharakah, of course, with
zero effort on part of the landowner. The quantum of landowner's effort in
actual farming is not critical for the nature of contract because there is no
Shari`ah constraint of minimum effort by a partner to be met.
Of course, one can imagine another case, still a musharakah, in which the tenant may
have his own implements but provision of fungible inputs (such as seeds and fertilisers)
may be responsibility of the landowner. Given that all material losses in a partnership
are to be shared in proportion to a party’s capital and that there is little or no chance of
loss in land per se, perhaps this arrangement would be more in line with not only the
letter but also the spirit of Shari`ah.
The degree of responsibility and thereby costs incurred by both a landlord and
his tenant are to be reflected in crop sharing arrangements. The principal Shari`ah
requirement in this regard is that the crop-sharing ratio must be specified before both
parties enter into their contractual obligations. If the contract were for one crop, the
settlement at harvest time is to be as follows. First, ushr (zakah on agricultural produce)
has to be deducted. Next, the capital is to be returned. That is, land is to revert to the
Sayyid Tahir
landlord, implements to their respective owners and costs of fungible inputs to whoever
happens to be responsible for them in the first place. And, finally, any remaining
produce is to be distributed in the pre-agreed ratios. If the contract is for one year or
more, accounting for fixed capital assets (land and implements) may be deferred till the
end of the contract.
The above arrangements are fairly simple and straightforward. Where are then
the seeds of malpractice in a share-tenancy arrangement? While lack of institutions to
protect the poor and mostly illiterate tenants can be held responsible for the unfortunate
status quo in developing countries, in our opinion, the root cause of the initiation and
perpetuation of all this is rural indebtedness. The tenants often require economic
support to meet their personal needs between two crops. Here lies the primary source of
widespread dissatisfaction with share-tenancy.
The question that needs to be first answered is: can there be a debt contract
between a landlords and his tenant in addition to a share-tenancy agreement. The
answer from Shari`ah point of view is "yes". What needs to be ensured is that riba does
not enter into this contract. While claiming an excess over and above the principal
would be outright riba, there may be hidden riba in the form of landlords benefiting
from services of their tenants at no or low costs. According to several A`hadith,
creditors are called upon to avoid drawing any benefits from their debtors.3 It is not
difficult to see that many existing problems may be traced to non-compliance with
Shari`ah in general rather than the share-cropping contract.
Notwithstanding the above points, in passing, it is useful to answer some general
objections on the Shari`ah legitimacy of muzara`ah or mukhabarah and also kiraa'
(renting agricultural land). The A`hadith on these subjects are attributed to the
following Companions of the Prophet (SAAWS): Jabir Ibn Abdullah, Zaid Ibn Thabit,
Abi Horairah, Ummul Mo'mineen Sayyidah `Aaishah, Sayyidena Ali, Sa’d Ibn
Waqqas, Abdullah Ibn `Omar, Abdullah Ibn `Abbas, Osayd Ibn Zohair and Raf`ay Ibn
Khudaij. Their narrations are reported in all classical works on `Hadith. Tasin (1988,
pp.83-133) also draws on the same sources. His approach to interpretation is to treat the
prohibition stated in `Hadith texts as primary and to reject any permission implied by
the texts in favour of the prohibition. Without going into the details of Tasin's
argument, one may also look at the matter as follows.
Some general conclusions that may be drawn from the immediate texts of the
various A`hadith are as follows:
(1) If someone has agricultural land, he should either cultivate it himself, give it
to another Muslim for cultivation at no charge or leave the land fallow.
(2) While some A`hadith directly mention that agricultural land should not be
3
Usually such A`hadith are treated as a part of moral teachings of Islam. But there is no bar on
drawing inferences of a juridical nature.
Riba, Share-tenancy and Agrarian Reforms
rented, some others restrict the prohibition to renting for a fraction of the
produce, and yet some others allow its leasing against gold and silver.
(3) A share-cropping is either condemned or prohibited.
However, if one puts together the texts of all A`hadith together, the following points
also reveal themselves. When the Prophet (SAAWS) prohibited share-cropping, it
referred to the following arrangement. Either the landlord gave his land to a tenant on
the basis of a fixed quantity of grain or he reserved for himself a part of land whose
produce went to him while harvest from the rest belonged to the tenant. It is not too
difficult to see the problems with such arrangements. While the principle was that, in
view of the nature of share-tenancy contract, the landowner might claim a fraction of
the produce, the return to him in the form of a fixed quantity of the harvest or from a
fixed tract of land could exceed what might be due to him under a regular crop-sharing
arranging: the difference between “recognised” right and “realised” right had the
semblance of riba. This seems to explain the reasons for the prohibition of muzara`ah
as per the A`hadith under reference. Incidentally, this also seems to be the explanation
for the permissibility of renting land for gold or silver but not the land produce.
That, according to some A`hadith, a landowner could keep the land unused also
signifies something. This option effectively meant that a prospective tenant could be
denied a means of earning. Given this extreme possibility, it is difficult to see how
share-tenancy was to be outrightly unlawful even though it was a potential medium for
increasing income earning possibilities for the poor.
As discussed above, muzara`ah is akin to modarabah. Of course, one may ask:
what kind of modarabah is this in which the owner of capital (land) is not exposed to
any loss? This question may be answered in three ways. First, it is not necessary that
the provider of capital assets in modarabah must be exposed to a loss. That is, what is
critical is the legal aspect(s) of the exchange involved. And, there is no problem with
share-tenancy on this count. Second, land is also exposed to some depreciation. There
are also examples of erosion of land through land slides in hilly areas and washing
away of tracts of land in river deltas. These possibilities imply that the likelihood of
material loss to the landlord is not entirely ruled out under all circumstances. Third, the
nature of contract may be suitably modified to bring it into line with not only the letter
but also spirit of an ordinary modarabah. For example, as noted above, this may be
done by requiring landlords to bear the costs of fungible inputs, such as seed, fertiliser
and water.
Objection against muzara`ah can be answered in another way too. Can a
landlord hire the services of his tenant on a wage basis? The answer is obviously yes. If
he can, then another question arises. Given that there is no Shari`ah limit on minimum
wage [Tahir (1994)], is it not possible that the tenant may be materially as well of or as
worse off as he might be under muzara`ah? The ordinary wage contract is infeasible in
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agriculture, apart from some seasonal jobs, because the time involved in sowing and
harvesting the crop is very long and workers may not wait for payment of wages.
Moreover, one or both of the following two things may also happen. Either the workers
would be unemployed due to seasonal nature of employment or they would be forced
into accepting low wages. In other words, economically workers may come to the same
point as in the case of a share-tenancy contract. Given these points, it is difficult to see
why muzara`ah should be singled out as prohibited but not ijarah, the wage
arrangement?
Given that Islam provides maximum leeway for land tenureship, including
share-tenancy, we may now turn to malpractices in agriculture and their Shari`ah
remedy.
III. AGRARIAN REFORMS
The existing plight of tenants in Pakistan and other predominantly agricultural
economies is truly despicable. Every now and then, there are calls for putting limits on
land holdings and even outright nationalisation of land along with its free distribution
among peasants. But these surgical cures are at best stop-gap measures. The problem is
bound to resurface if it is not addressed at its source, namely (1) the contractual
relations between landowners and tenants, (2) the weak bargaining position of tenants
and (3) intergenerational transfer of debts. Piecemeal solutions are unlikely to give the
desired results. What is needed, in the end, is to address all three factors at the same
time and also to take additional remedial measures such as zakah and ushr reforms.
The most important component of the environment for share-tenancy contracts
is the general legal framework in which landowners and tenants operate. Key elements
of a share-tenancy contract are (a) the extent of input contributions by landowners and
tenants and (b) the crop-sharing ratio. As mentioned earlier, the provision of fungible
inputs may be made the responsibility of landowners. Such parameters for contracts
may be prescribed by the state as part of regulating the environment for negotiating
contracts. However, no hard and fast rules can be mandated in respect of crop-sharing
ratios, because that would infringe upon the rate at which landowners may agree to
share their property rights. This point stems from the famous `Hadith about price
controls according to which the owner of a thing cannot be denied his desired
compensation for parting with it. Of course, any lacuna in this regard can be addressed
through strengthening the bargaining position of tenants.
The bargaining power of tenants can be increased by taking steps (1) to make
tenants fully know their rights, (2) to make wider occupational choices available to
them, (3) to take care of their short-term personal needs and (4) to give tenants legal
protection in favourably seeking any contractual rights. Education and training hold the
key in the first and second respects. Knowledge and skills would give the tenants and
their children a fair chance to escape the traps set up by landlords. Obviously what
Riba, Share-tenancy and Agrarian Reforms
matters in this respect is Shari`ah education along with general education and training
in skills which would make occupational shifts possible. While the creditors may have
the first claim on the income and assets of debtors (over and above their basic needs),
they cannot restrict occupational choices by and mobility of the debtors.
Landlords get a leverage on the lives of their tenants through debt, especially
that which transfers from one generation to the next. Thus, any strategy for improving
the lot of tenants must give a pivotal role to eradication of rural indebtedness. Tenants
are bound to make a recourse to borrowing because of the time lag between productive
efforts and their results. Three points are noteworthy in this respect. Firstly, tenants
may borrow from their landlords. That is, there is no Shari`ah problem in combining a
debt contract with a sharing contract between two parties. But the general A`hkam of
riba and principles for settling debts have to be observed. Secondly, as mentioned
earlier, in principle, creditors cannot seek any benefits from tenants beyond those
stipulated in the share-tenancy contract governing the tilling of land. This applies to all
petty services and other productive work that landlords take from their tenants at
present. The problem may be solved, albeit partially, by requiring the landowners to
separately compensate the tenants for such work. Thirdly, the debts of fathers or
forefathers cannot be transferred to the next generation: the claims of creditors are
restricted at best to the assets left behind by the deceased. The necessary action in these
respects is obvious. What is needed is some fresh legislation and enforcement of the
same.
It is also possible to address the problem of rural indebtedness through proper
enforcement of the Islamic system of zakah and ushr. In principle, ushr is to be
deducted from the produce at harvest time. Thus, the initial incidence of zakah would
be on both parties to a share-cropping arrangement, namely landlord and tenant.
However, after zakah is separated and both landlord and tenant(s) get their respective
shares, the first claim on zakah may be given to the immediate ghaarimeen, the
indebted tenants. This would be perfectly legitimate on the analogy of a wife giving her
zakah to her zakah-worthy husband. Zakah proceeds handled in this way can go a long
way toward clearing the debts of tenants to their landlords. Of course, necessary
Shari`ah parameters for such a scheme need to be worked out.
IV. CONCLUDING OBSERVATIONS
Muzara`ah or share-tenancy is a legal arrangement in Shari`ah. It covers the
case involving sharing of both ownership and usufruct of land, principal asset in
agriculture, during the pendency of the contract between landowners and tenants. What
matters in this regard is observance of Shari`ah requirements for such a contract, of
course, in a Shari`ah-consistent environment in which tenants can "safely" claim their
rights. Widespread dissatisfaction with the status quo is understandable. But the
problems can be solved only through providing a proper institutional framework with
Sayyid Tahir
enhanced bargaining power for workers. The existing political and legal system does
not have the capacity to bring about any meaningful change because the ruling landed
èlite is not willing to forsake its un-Islamic and, of course, unjustified privileges. The
only foreseeable solution is enforcement of Shari`ah, albeit Islamisation of agriculture,
where basic parameters for contracts are all exogenously set.
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