DEFAULT IN THE SETTLEMENT OF FARMERS' DEBTS TO PALM OIL AGENTS AS REVIEWED ACCORDING TO THE BA'I AL-DAYN CONTRACT

(A Study in Kuala Tadu Village, Nagan Raya)

Abstract

This study discusses the default practice in settling farmers' debts to palm oil agents in Gampong Kuala Tadu, Nagan Raya Regency, with a review based on the Ba'i al-Dayn contract. The background of this study stems from the limited capital that forces palm oil farmers to borrow funds from agents, with the obligation to sell their entire harvest to the capital-providing agent. This scheme often causes dependence and losses for farmers, because the selling price set by agents tends to be lower than the market price. This study aims to analyze the mechanism of harvest-based debt agreements, assess the fairness of price setting, and evaluate these practices from an Islamic law perspective. This study uses a juridical-sociological approach with data collection techniques through in-depth interviews with farmers and palm oil agents and a literature study of relevant books, journals, theses, and articles. The results show that debt is provided on the condition of the sale of the harvest, where debt payments are deducted directly from the sales proceeds, and farmers only receive the remaining profits after these obligations are fulfilled. However, there are often cases of default by farmers in the form of late or refused payments, which under Islamic law can be categorized as ghashab because it harms the agents. Analysis based on the Ba'i al-Dayn contract shows that this practice does not fully comply with the principles of justice and maqasid syariah, thus requiring a more transparent and balanced agreement between farmers and agents. This study contributes to developing a fair debt agreement concept in the agricultural sector in accordance with the principles of Islamic muamalah.