After that, the borrower takes the commodity into his full possession, sells it to someone else in the marketplace, and makes use of the proceeds. When the arrangement is of this nature, it is called tawarruq, and it is permissible according to the majority of scholars, for there is a genuine need for it. Nevertheless—as we have already noted—it is a condition that the commodity be in the trader’s possession at the moment the contract is concluded, and that he himself must not be the one who buys it back from the debtor.

If the commodity in question consists of a share of the crop, as the query appears to suggest, then this is problematic, because it is not permissible to sell crops before their grain has hardened. In addition, the needy person may not actually obtain the benefit he seeks from such produce, and selling it while it is still standing involves further precautions and complications. It is therefore advisable to avoid this type of transaction and instead deal in goods that are already in hand—items the needy party can take possession of and resell to customers—and that are fully specified in every respect that valid knowledge requires. Allah knows best.

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The pledgee’s benefit from the pledged property

Question: What is the Islamic ruling in the following case? An individual pledges a clearly defined parcel of agricultural land for a specific sum of money to another person until he is able to repay the amount. The pledgee takes possession of the land, cultivates it, and takes its entire yield for himself, giving the pledger nothing, and this continues until the pledged sum is repaid. The term of the pledge may extend for many years, and the pledgee does not return the land to its owner until he has received the full amount of the pledge.