To refresh, this is the IFN Back to Basics column and, as part of the current topic, I am putting across my reasoning that instead of the need for Islamic finance or the Islamic economy to align with the United Nations Development Programme (UNDP) SDGs, it should be the case for the SDGs to align with the Islamic economic principles. I am currently exploring these principles with readers to know whether the claim holds water. So far, it seems it does.
The UNDP should at least consider experimenting this in the 57 Islamic countries with the help of the OIC so that the global body can get buy-in from the masses by explaining that the tenacities of the goals are already strongly entrenched in the Islamic teachings of social wellbeing and care since 7th century AD. I anticipate that such linkage may propel the momentum to achieve the goals at least in the Islamic world during the remaining 6.5 years from the 2030 deadline.
After having completed my arguments for SDG 1 or ‘No Poverty’, I am now discovering Islamic wisdom surrounding SDG 2 or ‘Zero Hunger’. In the last article, I had introduced readers to Ushr being Zakat on some of the agricultural produce and had provided Quranic evidence for it. There is another occasion instructing to pay Ushr in Quranic Sura Ana’am (the chapter named ‘Cattle) in Verse 141:
“It is He (Allah) Who has brought into being gardens — the trellised and untrellised — and the palm trees and crops, all varying in taste, and the olive and pomegranates, all resembling one another and yet so different. Eat of their fruits when they come to fruition and pay His due on the day of harvesting. And do not exceed the proper limits, for He does not love those who exceed the proper limits.”
The underlined part bears Allah’s order to pay Ushr promptly at the time of harvesting, and to make it impactful and mandatory, Allah has declared it as His share. Extremely profound.
Today, I shall further explore Ushr before proposing in the next articles on how effectively it can be used for alleviation of hunger, initially from the Islamic world and subsequently from the rest of the world. This may sound like a tall claim now but we will see how far it could be achieved with the combination of the will of the people and the modern means.
Although Ushr is also known as Zakat on land produce, there are differences between Ushr and Zakat. While Zakat has a holding period of one lunar year, Ushr is to be paid immediately upon getting the produce from the earth, whether harvested or from the orchard. Also, the Zakat amount is 2.5% of wealth but for Ushr it is 10%.
Moreover, while ascertaining Zakat, the person is allowed to deduct his or her debt from the total wealth to arrive at the net value on which Zakat is payable, provided it exceeds the Nisab threshold explained earlier. Nonetheless, in the case of Ushr, the debt is not deductible and 10% of the total produce is to be given away. However, if the giver of Ushr is indebted, he can receive Ushr from others, which is not the case in Zakat since a person can either pay or receive Zakat but cannot be on both sides.
While Zakat is payable annually, Ushr liability may be incurred twice a year (or more) based on different crops or fruits related to varying seasons in a year. I will park this point here to be picked up later to explain the great potential it has to serve the objective of SDG 2.
There is no connection between the expenses incurred to grow the crop and the value of the produce. For example, if the produce is valued at US$10,000 but the overall expenses incurred to grow the crop were US$12,000, the farmer will still have to pay the Ushr. Moreover, similar to Zakat which can also be paid in kind, the Ushr too can be paid in the equivalent amount of money.
Only the farmer is accountable to pay Ushr and the consumers of the produce shall not be responsible if Ushr is not paid. Moreover, if the farmer holds some quantity of the same or other produce from last season’s crops, he can pay Ushr for the current crop from the stored goods, provided the value of the current Ushr is applied while determining the quantity of the stored goods. Similarly, Ushr for all missed crops can also be given from the current crop; alternatively, money in the equivalent amount for all missed crops can also be donated.
When the farmer sells the produce on which Ushr is paid and gets cash, he will also be liable to pay Zakat if the amount becomes part of his wealth, provided the requirement of Nisab is applied. Another point is that if Ushr was not paid on olives or palm seed, it is allowed that Ushr is paid in the shape of the extracted oil subject to the oil quantity being equal in value to the harvested olives or palm seed (or any other oil seed).
The purpose of this educative series and the article is not to hurt any religious or commercial sentiments either consciously or even unwittingly.
Sohail Zubairi is an Islamic finance specialist, AAOIFI-certified Shariah advisor and auditor as well as CIAE-certified Islamic arbitrator and expert. He can be contacted at [email protected].
Next week: Discussion on Ushr to achieve the objective of SDG 2 – Zero Hunger to continue.