ZAKAT ON AGRICULTURAL PRODUCTS

Zakat is not a burden, but an achievement.

Only successful people are lucky!

 

Zakat comes from the word zaka which means holy, good, blessing, growing and developing. According to Shari'a terminology, zakat is a noun, namely a term for a certain amount of property that has met the requirements and is required by Allah to be released and given to those who are entitled to receive it. So, every property that has been given zakat will be holy, clean, good, blessed, grow and develop (At-Taubah: 103 and Ar-Rum: 39).

In the Koran, zakat and prayer are often mentioned together, which shows how zakat is an important pillar of Islam. Some even say that zakat and prayer are used as symbols of the entire teachings of Islam. "And establish prayer and pay zakat." If prayer symbolizes a person's relationship with God, then zakat symbolizes the relationship between humans. One vertical and one horizontal; it's complete!

"They were not ordered, but to worship Allah sincerely and to be inclined to practice religion because of it, as well as to perform prayers and pay zakat and that is the straight religion" (Al-Bayyinah: ...??).

Zakat is an achievement, not an obligation. And, indeed. In my village, only great farmers pay zakat. Farmers whose harvests reach Monday are discussed and praised by people in the village. Likewise, in farming, zakat must be seen as motivation. We try to earn money so we can give the most and best zakat. Like Qabil and Abil racing before.

The desire to give the most zakat, encourages us to earn a lot of income. The way to do this is not to increase the business margin to a large extent, but to remain with a "medium" margin but increase the scale. Trade people's language: "improving the party".

Order to Issue Zakat

As one of the pillars of Islam, zakat is fardhu 'ain and is a ta'abudi obligation. Zakat is a formal social worship, bound by conditions and harmony. In the Qur'an, the command for zakat is as important as the command for prayer. "Take zakat from some of their wealth, with that zakat you cleanse and purify them and pray for them. Indeed, your prayer (becomes) peace of mind for them. And Allah is All-Hearing, All-Knowing." (QS. At-Taubah: 103)

Zakat is an obligation for a Muslim who has property and meets the nisab. Among the wisdom of paying zakat is that it cleanses the human soul from stinginess, ugliness and greed for wealth, as well as helping Muslims who are in a state of need.

Arguments for the Existence of Agricultural Zakat

The word of Allah SWT, to worship mahdah we must have wealth, especially to pay zakat. It seems that so far there has been a bit of a mistake, where the obligation of zakat is often understood only if we have assets. Even though in fiqh this understanding is correct, the spirit is to earn money and collect wealth so that we can carry out zakat. You have to give alms and for that you have to have wealth! Your zakat gets bigger if you are rich. And Allah knows for sure, you can be rich.

To pray, we also have to have wealth. We need money to buy clean and appropriate private parts. Almsgiving also has extraordinary power. In the Koran, it is explained that whoever sets aside some of his wealth to spend in the way of Allah, he will be blessed with an easier life and more sustenance. That is God's promise. Allah will never break a promise.

There are at least two benefits of giving zakat. First, there are economic benefits: contributing to the upliftment of the community's standard of living, advancing the organization at the micro level and fostering economic growth at the macro level, and expanding investment and production—thereby creating jobs and enhancing the community's welfare.

Second, there are spiritual benefits. Paying zakat—deliberately setting aside what is readily at hand to give to others—purifies the soul of stinginess, greed, and other spiritual ailments. It also invites blessings and cultivates compassion toward fellow members of the community. Giving is a source of pride.

Zakat also elevates a person's spiritual standing. It is the fourth pillar of Islam. The term itself signifies cleansing and purification; as indicated in divine scripture, setting aside a portion of one's sustenance for charity and good deeds serves to purify and sanctify one's actions.

In Islam, zakat is categorized into two types: zakat fitrah and zakat maal (wealth-based zakat). Zakat maal is the obligatory alms paid from the proceeds of a person's livelihood, specifically in the form of tangible assets or goods.

Assets subject to zakat maal include gold, silver, livestock, agricultural produce (such as rice), and the like. Gold and silver are viewed as assets that appreciate in value, thereby necessitating the payment of zakat on them. Currencies in circulation at the time are also classified under the category of gold and silver; consequently, savings, time deposits, checks, stocks, and other securities fall into this category. This also extends to houses, land, vehicles, and other assets, such as commercial inventory.

According to the National Zakat Agency (Baznas), an asset qualifies as maal (wealth) if it meets two criteria: (1) it can be owned, stored, accumulated, and controlled; and (2) it yields benefits in the customary sense—examples include houses, cars, livestock, agricultural produce, money, gold, and silver. The conditions for an asset to be subject to zakat are that it must be fully owned, capable of growth or appreciation, meet the minimum threshold (nisab), exceed basic living needs, be free from debt, and have been held for a full year (haul).

Mandatory Conditions for Zakat

Several conditions must be met to be obligated to pay zakat: being a Muslim, being free (not a slave), having full personal ownership, meeting the nisab threshold, and—in the case of crops—cultivating staple crops that are durable for long-term storage and are the result of human cultivation rather than wild growth. The wealth subject to zakat must be fully owned by the individual, allowing for its complete utilization. Such wealth is acquired through means sanctioned by Islam—such as business activities, grants from the state or others, inheritance, or other legitimate methods. Zakat al-mal refers to the obligatory zakat paid by a Muslim on wealth derived from trade or business activities, provided the wealth reaches the nisab (minimum threshold) and has been held for a full year (haul).

"Exceeding basic needs" means the wealth owned surpasses the minimum requirements for the survival and primary needs of the individual and their dependents.

Meeting the nisab requirement means the wealth has reached the minimum threshold at which zakat becomes payable. To qualify for nisab, the wealth must be in excess of essential needs—such as clothing, food, housing, transportation, and tools used for trade or earning a livelihood. Furthermore, the wealth must have been held for a full year (haul), calculated from the day the nisab threshold was reached. A specific exception applies to agricultural produce, where zakat is paid at the time of harvest rather than waiting for a full year to pass.

How to Calculate Zakat al-Mal

Zakat is categorized into zakat al-fitr and zakat al-mal (wealth-based zakat). Zakat al-mal is further subdivided into categories such as gold and silver, and income.

Zakat al-Mal

In addition to gold and silver, livestock also falls under the category of mal (wealth); the zakat for livestock is also based on the haul (one-year holding period). Consequently, if the wealth falls below the nisab threshold at any point during the year, the haul count is interrupted. If the wealth subsequently reaches the nisab level again, the calculation restarts from the moment the threshold is met.

For example, suppose your wealth reached the nisab threshold in January. If, in May, your wealth dropped below the required nisab level, the previous calculation is voided. If, in June, your wealth increased to reach the nisab level again, a new calculation period would begin from that month. And so on until one perfect year is reached, then the zakat that needs to be paid is calculated.

There are those who argue that in calculating zakat mal, all items (gold, silver, money and other items) are combined in their entirety. The nishab for gold is 20 Islamic Dinars, while the nishab for silver is 200 Dirhams. The Dinar is a 22 carat gold coin or 4.25 grams, while the Dirham is a pure silver coin weighing 2.975 grams. These two coins are a legal medium of exchange according to Islamic law and the Sunnah of the Prophet. The current value of 1 Dinar is around IDR 2.3 million, while 1 Dirham is equivalent to IDR 65 thousand.

Zakat on Agricultural Products

"Eat from its fruit (of various kinds) when it bears fruit, and fulfill your right on the day of reaping the fruit (by paying zakat); and do not be excessive. Indeed, Allah does not like those who are excessive." (Al-An'am: 141).
With regard to agricultural zakat, there are differences between schools:

1. According to Imam Abu Hanifah, everything that grows on earth, except wood, grass and plants that do not bear fruit, must be given zakat.

2. According to Imam Malik, all long-lasting plants that are cultivated by humans must be given zakat, except for fruits containing seeds, guavas, pears, etc.

3. According to Imam Syafi'i, every food plant that is strong, long-lasting and cultivated by humans must be given zakati.

4. According to Imam Ahmad bin Hambal, grains, fruit and grass planted by Wajid are given zakati, as are other plants that have the same properties as tamar, dates, tien fruit and noni. For other agricultural products, for example cloves, zakat is required when traded, which has the same provisions as zakat tijarah (trade), not zakat zira'ah (crop products).

In various books, the nishab for rice is 5 (five) wasak, while the nishab for merchandise is the same as the nishab for pure gold (24 carat), namely 20 dinars. Based on measurements that have been converted into the measurements we usually use, the nishab for rice is around 1,323 kg with zakat of 5% or 1/20 for each harvest, which is approximately 66 kg for every 1,323 kg.

There are still other provisions for calculating this mall zakat. If agricultural products are obtained by irrigation or using sprinklers then the zakat is 1/20 (5%), but if agricultural products are obtained by using rainwater then the zakat is 1/10 (10%). If farmers have gardens in different locations and use different irrigation systems, then the zakat value for each plantation or farm will also be different.

Regarding the attainment of the nishab (minimum taxable threshold), harvests of the same type of agricultural or plantation produce within a single year are, according to some scholars, calculated cumulatively. Differences in location or timing within that year do not prevent the nishab from being reached.

Zakat on agricultural produce is paid at the time of each harvest; one need not wait for a full year to elapse. However, for the purpose of meeting the nishab requirement, harvests within a year are aggregated to reach the threshold value (specifically, 653 kg of rice or 5 wasaq). Some scholars hold the view that yields from a single season for the same type of crop are calculated cumulatively—rather than separately—to satisfy the nishab requirement; this does not, however, mean that the actual payment of zakat must be deferred for a year.

Upon closer examination, it appears that zakat is calculated based on "gross yield"—meaning costs incurred for seeds, fertilizer, and the like are not deducted. Nevertheless, many scholars argue that agricultural zakat is paid after deducting debts if the farmer had to borrow money to finance the farming operation. Naturally, a condition for this is that the farmer possesses no surplus cash or other assets that could be used to settle the debt. If the farmer holds assets exceeding basic needs—even in the form of property—then the debt does not serve to reduce the zakat obligation.

The majority of scholars agree that the nishab for agricultural zakat is 5 wasaq, although some scholars argue that no nishab requirement applies. What is the value of "5 wasaq"? Opinions vary, but the most widely accepted view—held by Sheikh Yusuf Al-Qaradawi—is that 5 wasaq is approximately equivalent to 653 kg.

Agricultural Zakat in Islam is categorized according to the type of produce, as follows:

Zakat on rice

Zakat is mandatory on rice harvests once the nishab (minimum threshold) of 5 wasaq (653 kg) is reached. By current standards, if the price of unhusked rice is Rp 5,000 per kg, the value amounts to Rp 3,265,000. This is considered a low threshold. If the average rice yield is 6 tons per hectare, then a farmer owning approximately 0.1 hectares would already be obligated to pay zakat.

However, according to KH Ma’shum Ali Jombang in the book Fath Al-Qadir (https://islam.nu.or.id/....), the nisab (minimum threshold) for unhusked rice is just over 1.6 tons, equivalent to 816 kg of milled rice. Based on average yields, this means an area of ​​0.26 hectares would trigger the zakat obligation. Which view is correct? God knows best.

There are three categories of zakat on rice farming: (1) If irrigation comes from natural sources (rain or springs), the zakat rate is 10%; (2) For harvests where irrigation relies partly on rain or springs and partly on paid methods, the zakat rate is 7.5%; and (3) For harvests where irrigation relies on human or animal labor, the zakat rate is 5%.

Zakat on leased rice fields

If a rice field is leased out to another party and the owner does not receive the actual crop yield, the zakat is not paid in the form of the harvest itself. Instead, zakat applies to the rental income, provided the money has reached the nisab threshold and has been held for a full year (haul). The benchmark for this value is the equivalent of 85 grams of gold or 595 grams of silver.
However, if the rice field is rented from someone else, the rental cost is deducted from the total yield before calculating zakat; only the remaining amount is subject to the obligation. The payment amount depends on the irrigation source and whether the yield has reached the nisab (minimum threshold).

Zakat on vegetables and fruits

Vegetable and fruit harvests are not subject to zakat because they do not meet the necessary criteria. Agricultural produce subject to zakat consists of staple foods such as rice (Indonesia), wheat (Middle East), dates (Middle East), corn, and other staples. Vegetables are exempt because they cannot be stored for long periods; the same applies to fruits.

Zakat on livestock

The zakat on livestock is essentially the same as that for other agricultural products, with one additional condition: the animals must graze on open pastures more often than they are fed fodder gathered by the owner. In other words, the cattle rely more on communal resources (pasture) than on the farmer's effort to forage for grass.

The nisab for camels starts at 5 animals, while for cattle, the minimum is 30 animals.

Tabi’ or tabi’ah refers to male and female cattle that are one year old, while musinnah refers to a female cow that is two years old.

The nisab for goats is 40 animals. The zakat calculation for goats is: 1 goat for every 40 goats; 2 for 120 goats; 3 for more than 200 up to 300 goats; and thereafter, 1 goat for every multiple of 100 above 300 goats.

Zakat on fisheries

Fisheries take at least two forms: aquaculture (in ponds, enclosures, etc.) and wild capture (fishing freely in the open sea). Zakat on aquaculture yields is calculated based on the year's business earnings—similar to zakat on commerce—once the haul (one-year holding period) is met and the nisab threshold is reached. The nisab (minimum threshold) applies when the business volume reaches the equivalent of 20 dinars (1 dinar = 4.25 grams of pure gold) or 85 grams of gold. If the price of gold as of April 2020 is Rp 900,000 per gram, the nisab stands at Rp 76.5 million. Zakat is calculated based on net income—that is, income remaining after deducting costs for production inputs, rent, labor, and other expenses. If the net income is Rp 30 million, the zakat amount is 2.5% × Rp 30 million = Rp 750,000.

Some argue that the zakat rate for fish/shrimp ponds should be 10% by drawing an analogy (qiyas) with agriculture, based on the criterion that the produce is a staple food that provides satiety. Alternatively, it could be equated to the zakat on trade, which is 2.5%. However, the prevailing view equates it with the zakat on crops, given the significant similarities regarding seeding, maintenance, and harvesting. In this case, the nisab corresponds to the crop threshold of five wasaq (1,500 kg or 15 quintals), based on the hadith: "There is no zakat on grains or dates until they reach five wasaq," and the Quranic verse: "And give its due [zakat] on the day of its harvest" (Al-An’am: 14). The zakat payable is 5% of the total harvest (gross yield). This relates to the hadith narrated by Al-Bukhari, Ahmad, and the authors of the Sunan collections from Ibn Umar: "Crops watered by rainfall or natural springs, or those irrigated by canals, are subject to a zakat of one-tenth (10%), whereas crops watered through artificial irrigation systems are subject to a zakat of one-twentieth (5%)."

Given that fish farming entails significant costs for breeding and maintenance, it is equated to crops requiring artificial irrigation (involving cost); thus, the zakat rate is 5% rather than 10%. And Allah knows best.

Regarding marine fisheries, some scholars hold the view that no zakat is obligatory on the catch extracted from the sea. However, the opinion of Imam Ahmad—who classifies fisheries as subject to zakat—is a prudent approach. Similarly, the Indonesian Ulema Council (MUI) states that zakat for fish entrepreneurs is analogous to zakat on trade; provided there is capital investment, the value reaches the nisab (threshold) of 85 grams of gold, and the hawl (one-year holding period) is met, the entrepreneur is obligated to pay zakat at a rate of 2.5%.

Marine fishing is a business capable of generating substantial returns. A single voyage with a large vessel can yield hundreds of millions of rupiah, potentially resulting in billions annually. The zakat on marine fishing businesses is 2.5%, equating it to zakat on trade.

Zakat on Trade

Zakat on trade is the zakat levied on commercial assets—assets bought and sold with the intention of generating profit. There are differing opinions regarding the nisab (minimum threshold) for trade goods; those who mandate it set the nisab for trade goods equal to that of gold.

The value of trade assets subject to zakat is calculated by taking the business's current assets and deducting short-term liabilities (debts maturing within one year). If the difference between current assets and liabilities reaches the nisab threshold, zakat must be paid at a rate of 2.5%.

The setting of a relatively high nisab for trade zakat—compared to that for agricultural produce—is rooted in historical facts. First, the level of hardship faced by merchants in the era of the Prophet was far greater than that of farmers. Merchants of that time had to travel hundreds of kilometers, sometimes even crossing into other countries, spending months or years peddling their wares.

Second, the risks borne by merchants were higher than those faced by farmers. While a farmer might only risk losing their capital, a merchant faced greater perils; they could go bankrupt due to price fluctuations in their goods, not to mention the risks to their personal safety and the security of their merchandise during travel.

Third, agricultural commodities usually consist of basic necessities, meaning their prices remain relatively stable and demand is guaranteed. The same cannot be said for general trade.

However, the socioeconomic standing of farmers also warrants consideration in relation to other professions, particularly regarding the value of their output. Who is entitled to receive Zakat

The distribution of zakat is regulated in the Qur'an, surah at-Taubah verse 60: "Indeed, zakat is only for the needy, the poor, zakat administrators, converts who are persuaded, for (freeing) slaves, people who are in debt, for the path of Allah and for those who are on a journey, as a decree required by Allah, and Allah is All-Knowing, All-Wise." So, there are eight groups who are entitled to receive zakat mal, namely:

1.     Poor, people who have almost nothing and are unable to meet their living needs.

2.     Poor, people who have assets, but not enough to meet their daily living needs.

3.     Amil, the person in charge of collecting zakat (zakat administrator).

4.     Mu'allaf, a person who has just converted to Islam and needs help to adjust to his new situation.

5.     Slaves, slaves who want to liberate themselves.

6.     Gharimin, people who owe money for halal purposes and are unable to pay it.

7.     Fisabilillah, people who fight in the way of Allah, for example jihad and fighting to defend the Islamic religion.

8.     Ibnus Sabil, a person who runs out of money in the middle of a journey (traveler).

That's about it. Wallahu a'lam. *****