REFORMING THE IJON CONTRACT THROUGH A MAQASID AL-SHARI'AH APPROACH IN ISLAMIC AGRICULTURAL FINANCE

Abstract

The ijon contract, a pre-harvest sale commonly practiced in agrarian societies, continues to serve as an informal financing mechanism for smallholder farmers despite its tendency to generate economic injustice. Characterized by excessive uncertainty (gharar), asymmetric risk allocation, and unequal bargaining power, ijon often undermines farmers' welfare and perpetuates structural dependency. While classical Islamic jurisprudence broadly addresses ijon by prohibiting it, that approach remains insufficient in contexts where viable financial alternatives are absent. This study employs Maqasid al-Shari'ah (the higher objectives of Islamic law) as an analytical and reformative framework to critically evaluate the ijon contract and formulate ethical and practical alternatives within Islamic agricultural finance. Using a qualitative, library-based methodology and juristic–philosophical analysis, the research examines ijon in light of core maqasid principles, particularly the preservation of wealth (ḥifẓ al-māl), justice (‘adl), and public welfare (maṣlaḥah). The findings demonstrate that ijon fundamentally contradicts these objectives by disproportionately transferring production risks to farmers, obscuring price formation, and weakening long-term economic sustainability. Moving beyond a purely prohibitive stance, the study proposes Bai‘ al-Salam as a maqasid-compliant alternative that preserves rapid liquidity access while requiring ex ante specification to reduce gharar and strengthen contractual transparency. To enhance feasibility for smallholders, the salam-based model is complemented by wakalah for operational delegation, micro-takaful for shock protection, and optional qardhul hasan for emergency liquidity support. The study concludes that a maqasid-based reform enables Islamic agricultural finance to transition from reactive prohibition to proactive institutional design, thereby contributing to inclusive, just, and sustainable rural development aligned with the Sustainable Development Goals.