An Invalid sharecropping contract
6-10-2011 | IslamWeb
Question:
Dear brother Assalam o alaikum I did an agreement with a land owner to grow ginger. As per agreement I contributed the capital required and the land owner contributed with his land,labour and a little capital. The output will be shared 50% each whereas the loss,if happens due to lack of rain or any other factor will be bear by me only. Now I want to know whether this type of transaction or business is permissible or halal as per islamic shariah or not? Am I liable to get my share after deducting my capital cost? Shall we distribute the output physically or the amount after selling the output? And what will be the zakat if the cultivation is done by rain. Please guide me on this. Jazakallah khair.
Answer:
All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad 
is His slave and Messenger.
This partnership is void and it is not valid as a Muzaaraa’h (sharecropping or cropping partnership) contract. This is because two partners contribute with their money while one of them contributes with his work while there is a condition that the loss is only borne by one partner; for more benefit in this regard, please refer to Fataawa 5160 and 114857.
In case the partnership is invalid, the profit of the money is for its owner, so your share in the output will be according to your capital money in the partnership. If your capital money is half, then you are entitled to half of the output, if your capital money constitutes two-thirds, you are entitled to two-thirds of the output, and so forth.
However, the condition of dividing the profit half-half (50% each) becomes void since the partnership is void in principle. In which case, your partner who works with you should be paid the fees which anybody other than him may take for his work in your share and he is entitled to a rent for his land in accordance with your share in the capital money.
Al-Buhooti 
from the Hanbali school of jurisprudence, said in his book “Kashshaaf Al-Qinaa’”: “If the contract, i.e. the contract of the partnership with all its kinds, becomes void, then in case of the ‘Anaan partnership (i.e. a co-operative partnership in which individuals have their shares to invest money in a certain activity and divide the profit and loss according to the value of each share) and the Wujooh partnership (i.e. eminent people partnership in which two people - who have no capital to use in trade but who are distinguished and have a good reputation in the community - come together and agree to enter a partnership in trade so as to buy things on credit and sell them in cash, and the profit is to be divided among them according to certain conditions), then the profit of such partnership should be divided according to the share of each partner because the disposal of the money is correct as it is with the permission of its owner and because the profit is the result of the capital, as in the case of the Wadhee’ah (i.e. selling goods at a loss) in which the loss is divided according to the money of each partner. As regards the work done by them, i.e. in the ‘Anaan partnership or the Wujooh partnership, then each one of is entitled to his fees for it as he worked in the share of his partner; so he is entitled to take this fees. This is because it is a contract that is aimed at gaining a profit in the future, so his work must re-compensated as in the case of Al-Mudhaarabah (co-partnership)." [End quote]
Al-Buhooti also said about the invalid Muzaaraa’h contract: “If a condition is stipulated in the contract that what (of the plants) is around the canals is for one partner be it only or along with his share (of the output), then the Muzaaraa’h or the Musaaqaah (share tenancy or the partnership in the yield of trees) becomes void when the contract, i.e. of the Muzaaraa’h or the Musaaqaah becomes void, then the output (of Muzaaraa’h) is for the owner of the seeds, and he has to pay the fees of the worker, and the fruits (in Musaaqaah) are for its owner, i.e. the owner of the seeds or the trees, and he has to pay the fees of the worker; as he worked for a compensation which he did not receive.” [End quote]
Having known that your right in this invalid partnership is according to your capital money in it, then your right is in the output itself, and you may dispose of it as you wish. In case both of you wish to sell the output and divide its price between the two of you according to your shares in it, then this is permissible.
As regards your question about the Zakah, then you should know that ginger is among the spices and there is no Zakah on it according to the view of the majority of the scholars. However, if you sell it, you should pay Zakah on its price if a whole lunar year elapses over it if the price reached a Nisaab by itself or with other money or tradable items added to it.
For more benefit, we would like to mention here some of the statements of the scholars about the Zakah on plots of land in general. For instance, An-Nawawi said in “Al-Majmoo’”: “Among the views of the scholars about these aforementioned items, our view is that there is no Zakah on trees other than the date palms and vines and no Zakah is due on grains except that which is used as a regular food and can be stored, and there is no Zakah on vegetables; this is the view of Imaam Maalik, Abu Yoosuf and Muhammad. However, Abu Haneefah and Zufar said: “One-tenth should be paid in everything that comes out of the land (if it is irrigated by rain) with the exception of firewood, bamboo and grass that grows out by itself.”
Besides, Al-‘Abdari said: “Ath-Thawri and Ibn Abi Layla said: “There is no Zakah on plantations except the dates, raisins, wheat and barley. On the other hand, Ahmad said: “One-tenth must be paid on everything that is measured and stored of the plants and fruits. As regards what is not measured, like Qiththaa' (Egyptian cucumber), onion, cucumber, melon, aromatic plants (like basil), and all herbs, then there is no Zakah on it. Abu Yoosuf is of the view that it is an obligation to pay Zakah on Henna whereas Muhammad said that there is no Zakah on it."
Allaah Knows best.