Assalamu-alai-kum W.R.A,
I hope you must be in good health. I am seeking fatwa in the situation below having two parts; please follow,
Part ONE
I have recently joined potato trading business in the city of Okara. They are basically commission agents which we usually call “aar’dti” in urdu. I have invested little money there. Over that investment they get a total 7% commission on every transaction which is done on 15 day turnover.
After every 15 days 1% is spent on expenses and the rest 6% is divided in two equal halves whereby i get 3%. This is a fix thing.
Actually from my money they buy the potatoes from the farmer on cash and pay him instantly and sells it in the market on a 15 day credit cycle where the buyer is supposed to give 7% commission having this credit facility, which in turns to be our profit.
I see there is nothing wrong in it as people have been doing this for ages but i still want to seek fatwa if this is O.K with shariah?
Part TWO
The above type of transactions runs only Six months a year. In the remaining Six months we STORE THE POTATO in cold stores. Actually fresh Potatoes are available only six months a year. In every part of the country it is a six month yield. In order to get it to the market all twelve months it is stored. So it is compulsory for a potato to be stored.
Now we store it as a normal practise. But when we store it, the price is reasonably low and when we see the market is fair enough high we sell it, the gap between buy and sell is our profit. So there is one thing to be very clear that we store the potatoes from the perception that it will get high rates. Is this also O.K with shariah?
Assalāmu `alaikum Warahmatullāhi Wabrakatuh,
1) We understand from your query that you invested X amount of money with a company. The company buys potatoes from the farmers and pay for it in cash. Thereafter the company sells the potatoes to the retailer on a higher rate and with a deferred payment. The profit mark up between the purchasing price and selling price is 7%. 1% is used for the expenses of the company and the remaining 6% is shared on a 50-50 ratio. Your question is if this is permissible.
It is permissible for you to enter into such an agreement. This will fall under the rules of muḍarabahi.e. one party contributes the money and the other party does the work and both share in the profits. Fixing 1% of the profits to be used for expenses of the company is an administrative issue. If the expenses of the business are more than 1% then the total amount of expenses could be deducted as mudārabah is sharing of profits after deduction of total expenses. If the expenses are lesser than 1% then the surplus amount should be included in the distribution of profits.
المختصر للقدوري – (269)
– كتاب المضاربة
المضاربة : عقد يقع على الشركة في الربح بمال من أحد الشريكين وعمل من الآخر ولا تصح المضاربة إلا بالمال الذي بيننا أن الشركة تصح به ومن شرطها : أن يكون الربح بينهما مشاعا لا يستحق أحدهما منه دراهم مسماة ولا بد أن يكون المال مسلما إلى المضارب ولا يد لرب المال فيه
2) If potatoes are available to the public and they are not being harmed by you storing it away it will be permissible for you to store it. If the general public are being harmed by you storing the potatoes away it will be makrūh (detestable) for you to store them away and sell them when the prices have gone higher.
اللباب في شرح الكتاب –(705)
(ويكره الاحتكار) والتلقي (في أقوات الآدميين) كبر وشعير وتمر وتين وزبيب (والبهائم) كتبن وقش (إذا كان ذلك في بلد يضر الاحتكار) والتلقي (بأهله) لحديث “الجالب مرزوق، والمحتكر ملعون” وإن لم يضر لم يكره (ومن احتكر غلة ضيعته أو ما جلبه من بلد آخر فليس بمحتكر) أما الأول فلأنه خالص حقه لم يتعلق به حق العامة، ألا يرى أن له أن لا يزرع، فكذلك له ألا يبيع، وأما الثاني فالمذكور قول أبي حنيفة؛ لأن حق العامة إنما يتعلق بما جمع في المصر وجلب إلى فنائها، وقال أبو يوسف: يكره؛ لإطلاق ما روينا، وقال محمد: كل ما يجلب منه إلى المصر في الغالب فهو بمنزلة فناء المصر محرم الاحتكار فيه، وعلى قول أبي حنيفة مشى الأئمة المصححون كما ذكره المصنف، تصحيح.
شرح منلا مسكين 2/208
الهدية العلائية 288
And Allah Ta’āla Knows Best
Mufti Ishaaq E. Moosa
Benoni.
Checked and Approved by,
Mufti Ebrahim Desai.
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