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To improve production we are distributing certified seeds to farmers and they are required to return 2 kg of grain after harvest. This grain will be sold and used to buy certified seed again which is distributed to more farmers. Some Muslim farmers are not sure whether this practice is halal, as they return more than they receive. But the value of certified seed is much higher than of food grain.

  • I think this classifies as one form of interest (Riba), and Muslims are strictly prohibited from engaging in interest based deals – Aboudi Jun 18 '17 at 13:22
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Interset/ Usury (Riba) can be of several types. The scenario included in your question is a form of Riba referred to as Riba Al-Fadl:

The Prophet said, "Sell gold in exchange of equivalent gold, sell silver in exchange of equivalent silver, sell dates in exchange of equivalent dates, sell wheat in exchange of equivalent wheat, sell salt in exchange of equivalent salt, sell barley in exchange of equivalent barley, but if a person transacts in excess, it will be usury (Riba). However, sell gold for silver anyway you please on the condition it is hand-to-hand (spot) and sell barley for date anyway you please on the condition it is hand-to-hand (spot).”

Interset/ Usury (Riba) is strictly forbidden in the Islamic belief and you may hardly find a scholar that deems it acceptable or includes exceptional circumstances in which it could be allowed in. There are many strong evidence that support how much of a major sin dealing with Interest is and how severe it's punishment is:

Ar-Roum (Verse 39) "And that which you give in riba (to others), in order that it may increase (your wealth by expecting to get a better one in return) from other people’s property, has no increase with Allah."

Al-Baqarah (Verse 275 & 276), what can be translated as, "Those who deal with riba will not stand (on the day of Resurrection) except like the standing of a person beaten by Shaitan (Satan) leading him to insanity. That is because they say: "Trading is only like riba," whereas Allah has permitted trading and forbidden riba. So whosoever receives an admonition from his Lord and stops dealing with riba shall not be punished for the past: his case if for Allah (to judge); but whoever returns to dealing with riba, such are the dweller of the Fire-they will abide therein. Allah destroys riba and will give increase for Sadaqat (deeds of charity, alms, etc.) and Allah does not like the disbelievers, sinners."

You may want to consult a scholar.

Allah knows best.

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