Conducting Agribusiness According to Islamic Principles

 

At its core, agribusiness is about the strategy of generating profit by managing every aspect of an agricultural enterprise—ranging from cultivation, post-harvest handling, and processing to marketing. This is undeniably a noble endeavor. The subjects of agribusiness can be plants, animals, or other living organisms.

In essence, agribusiness means treating farming as a business; thus, planting and harvesting must be followed by selling. This is precisely where the challenge arises. When farmers must engage with the market, the act of farming—once a beautiful, romantic "way of life"—transforms into a business venture driven by financial calculations. There is an interesting book on this subject titled Agribisnis Syariah: Manajemen Agribisnis dalam Perspektif Syariah Islam (Sharia Agribusiness: Agribusiness Management from an Islamic Sharia Perspective) by Said and Pratiwi (2005), although I have not yet had the chance to read it. The Sharia agribusiness system and management represent an effort to establish values ​​of truth in business, grounded in the awareness that the universe is a gift requiring responsible stewardship. This endeavor harmonizes economic aspirations with spiritual ones—earning money, creating jobs, and securing a livelihood, all while accumulating righteous deeds.

Agribusiness comprises several subsystems: cultivation; the procurement and distribution of production inputs; post-harvest processing; trading and marketing; and supporting institutions. Does Sharia play a role here? Yes. Sharia applies whenever an activity involves interaction—whether between humans and nature, or, even more so, between human beings. These five subsystems clearly involve human-to-human interactions (muamalah). Consequently, these relationships must be guided by Islamic principles. If farming itself must be Sharia-compliant, then agribusiness—by extension—must also adhere to Sharia.

So, what exactly is Sharia agribusiness? In my view, it entails building a broad-based agricultural system through the application of Islamic teachings. The goal is, of course, to foster progress and justice. Ultimately, all Islamic rules are rooted in justice. Thus, Sharia agribusiness means conducting agricultural business with a mindset of sincerity and piety, acknowledging the greatness and majesty of Allah SWT. It involves working for the sake of Allah, seeking profit for the sake of Allah, and distributing the results in accordance with Allah’s guidance.

Agribusiness is, in reality, a vast field. Beyond the actual farming—planting, weeding, fertilizing, harvesting, and selling—we often overlook the fact that agribusiness also... ...encompasses indirect service-oriented activities. Thus, agribusiness also includes agricultural banking, agricultural insurance, extension services, transportation, and warehousing.

We are already familiar with the concept of sustainable agribusiness. The idea centers on maintaining environmental sustainability and avoiding damage to the earth. This aligns perfectly with Islamic teachings. Surah Al-A’raf, verse 56, states: "And do not cause corruption upon the earth after its reformation. And invoke Him in fear [of rejection] and aspiration [of acceptance]. Indeed, the mercy of Allah is near to the doers of good."

Thus, engaging in agribusiness is also a form of da'wah (calling to the faith) and a path of ghairu mahdah worship (acts of worship extending beyond ritual acts). Farming is undeniably a most noble profession. It involves planting and nurturing a tiny seed until it grows, sprouts leaves and flowers, and eventually bears fruit. While it is certainly Allah who causes it to grow, the work itself is truly good and noble. Therefore, this work must not fall outside the framework of worship; the agribusiness itself must be conducted in the spirit and essence of worship.

Running an agribusiness can serve as a vehicle for da'wah to strengthen humanity's faith and act as a field of good deeds for those involved. By applying Islamic principles to agribusiness, we prevent the sector from being corrupted by greed and destruction. So, let the champions of the economy and life engage in agribusiness now—specifically, an Islamic agribusiness. We must ensure that food and drink derived from plants and animals do not become haram (forbidden) for consumption simply because the operations were conducted by those lacking an Islamic approach.

To this end, we require agribusiness management that is also Sharia-compliant. Management is a series of processes—encompassing planning, organizing, executing, supervising, evaluating, and controlling—aimed at optimally utilizing all organizational resources (human, capital, material, and technological) to achieve organizational goals. As an organization, an agribusiness system requires operations that are managed correctly, neatly, clearly, purposefully, and in an orderly fashion, as emphasized by Islamic Sharia. This is illustrated in a Hadith narrated by Al-Tabarani, Al-Tirmidhi, and Al-Nasa’i: "Indeed, Allah loves those who, when performing a task, do so with itqan (precision, purpose, clarity, and thoroughness)."

The sequence of planning, organizing, executing, supervising, evaluating, and controlling constitutes the management functions that are likewise applied in agribusiness management. Management functions apply to every stage of agribusiness activities—whether in production management, agro-industry, marketing, or agribusiness risk management.

Regarding production or cultivation, agricultural production management aims to increase output in terms of both quantity and quality. The Quran encourages multiplying harvest yields and improving quality through the application of appropriate cultivation technologies and the use of high-quality production inputs. In terms of marketing or trade, Islam emphasizes facilitating exchange and serving both producers and consumers, rather than establishing an authority that seeks to dominate the entire agribusiness system.

How should one handle risk from an Islamic perspective? Farming and running an agribusiness are inherently risky endeavors; this is why commercial banks are often reluctant to get involved. There are numerous risks, such as climatic uncertainty, pest and disease outbreaks, and the risk of value depreciation. A decline in value can result from a drop in quality, price fluctuations, or shifts in consumer preferences. These risks constantly weigh on those involved in agribusiness.

Islam provides guidance that all such trials and risks should be viewed as tests or calamities originating from Allah SWT. In this regard, Surah Ali ‘Imran, verse 117, states: "The example of what they spend in this worldly life is like that of a wind containing intense cold that strikes the crops of a people who have wronged themselves, thereby destroying them. And Allah has not wronged them, but it is they who have wronged themselves."

Harvested produce must be sold; thus, agribusiness entails trade. Engaging in trade—or berniaga as it was formerly known—especially over long distances between islands or even continents, serves as a form of dakwah (missionary work). During the time of Prophet Muhammad (PBUH), both domestic and international trade were practiced. The mission undertaken went beyond mere commerce and profit-seeking; it also encompassed the propagation of Islam. It was through trade that the message of Islam flourished and spread to all corners of the globe. The Prophet’s companions and the Arab people frequently traveled for trade to various lands, including China, Malaysia, the Philippines, and Indonesia.

Merchants—those who buy and resell goods, often referred to in Malay literature as saudagar—should not be underestimated. Abu Sa'id narrated that the Messenger of Allah once said, "The honest and trustworthy merchant will be grouped with the Prophets, the Siddiqin (the truthful/righteous), and the Shuhada (martyrs)." Yet, on other occasions, the Prophet warned that the marketplace is a place requiring caution. Being a merchant is by no means easy, let alone being an honest one. The Messenger of Allah understood this well, having been a merchant himself. Abdullah bin Umar was a successful merchant, as were Abu Bakr, Umar, and Uthman, all of whom amassed their wealth through trade.

Farming and trading were professions practiced by the Prophets. Agriculture forms the foundation that sustains all other forms of life; it is the primary sector. All other sectors would stagnate if the primary sector failed to function. A wool factory cannot operate until sheep farmers produce high-quality wool; a garment factory cannot run if cotton farmers have not harvested their crops; and so forth.

The Prophets and Messengers worked to sustain the continuity of their mission. Engaging in work to earn a livelihood—whether through trade, farming, or livestock rearing—was never considered beneath their dignity, nor did it diminish the quality of their tawakkul (reliance on Allah). The scholars were known as individuals who worked diligently and were tenacious in their endeavors; yet, they were equally steadfast and resilient in the pursuit of knowledge and the propagation of the faith. During his time as Caliph, Abu Bakar would go to the market every morning, carrying garments on his shoulders to sell. Upon encountering Umar and Ubaidah bin Jarrah, he was asked, "How can you engage in trade while serving as the leader of the Muslims?" Abu Bakar replied, "How else am I to provide for my family?" This was despite the fact that, like Umar, Abu Bakar also received a share from the Baitul Mal (public treasury).

Wallahu ‘alam. And God knows best. ****