PROFIT SHARING AND RISK SHARING: AN ISLAMIC ECONOMIC PERSPECTIVE ON FARMLAND CULTIVATION

Abstract

Cooperation agreements for agricultural land leases involve profit and risk sharing. The greater the risk, the greater the potential profit. This study aims to determine the application of profit sharing and risk sharing in agricultural land cultivation in Payaman village and the Islamic economic perspective on the application of profit sharing and risk sharing in agricultural land cultivation in Payaman village. The research method used is qualitative with a case study. The data collection technique is triangulation (observation, interview, and documentation). Research results: The application of profit sharing in cooperation with the mukhobarah contract and the muzara'ah contract in Payaman Village is done when the harvest period arrives, which is taken according to the agreed ratio. The profit-sharing method used is the revenue-sharing method, where, in practice, risk sharing is only carried out in the muzara'ah contract, with the provision that the landowner bears losses in the form of money/capital. In contrast, the manager bears losses in the form of labor. From the five principles of Islamic economics, namely the principles of tawhid, 'adl, nubuwwah, khilafah, and ma'ad, the application of profit sharing in cooperation, both with the mukhobarah contract and the muzara'ah contract, applies the five principles of Islamic economics (tawhid, 'adl, nubuwwah, khilafah, and ma'ad). As for risk sharing, the mukhobarah contract only applies to 4 of the five principles of Islamic economics (tauhid, 'adl, nubuwwah, khilafah, and ma'ad). Meanwhile, risk sharing in the muzara'ah contract has applied five principles of Islamic economics (tawhid, 'adl, nubuwwah, khilafah, and ma'ad).