Chapter 10: Lending Produce and the Boundaries of Ribit in Commodity Loans

Overview

This chapter addresses the halachic principles governing the lending of produce and other commodities, focusing on when such transactions are permitted and when they risk violating the prohibition of ribit (interest). The key distinction lies in whether the produce is lent with a fixed repayment time or without one, and whether the lender possesses the item or the market rate is known.

When the market rate is established and the lender owns even a small amount of the item, it is permitted to lend produce without specifying a repayment date. However, lending with a fixed time or when the item is unavailable can resemble a loan with interest and is therefore prohibited. The chapter also explores nuanced cases—such as lending to sharecroppers, converting monetary loans into produce, and switching commodities mid-loan—clarifying when these arrangements are halachically sound.

Halacha 1: Borrowing Produce Without Fixed Time Is Permitted

When the market rate (sha’ar) is known and stable, one may borrow produce without specifying a repayment date. Even if the produce later appreciates, the borrower returns the same quantity, since the transaction was based on a known value and could have been settled immediately.

Halacha 2: Borrowing When the Lender Has the Item

If the lender possesses even a small amount of the produce—such as one se’ah of grain or a drop of wine or oil—it is permitted to borrow larger quantities without a fixed time, even if the market rate hasn’t yet been set. The presence of the item validates the transaction.

Halacha 3: Prohibition When Item Is Unavailable or Market Unknown

If the lender has none of the item and the market rate is not yet established or known, it is forbidden to borrow produce by measure or weight. In such cases, the transaction must be converted into monetary terms to avoid ribit. If the borrower already borrowed improperly, he must return the produce if it depreciated, or pay its original value if it appreciated.

Halacha 4: Fixed-Time Produce Loans Are Prohibited

Even when the lender has the item or the market rate is known, it is forbidden to borrow produce with a fixed repayment date. Instead, one must borrow without specifying time and repay when ready. This avoids the appearance of a loan with interest.

Halacha 5: Special Cases—Sharecroppers and Seed Loans

In places where the sharecropper provides the seed, the landowner may lend him grain for planting even after he begins working the field. But in places where the landowner provides the seed, he may only lend before the sharecropper begins, while he still has the right to dismiss him. Once the sharecropper starts working, the loan must follow standard market terms.

Halacha 6: Converting Monetary Loans Into Produce or Other Goods

If someone owes money and wants to receive produce instead, the lender may only give it if he currently possesses the produce. The same applies to converting wheat into wine or other goods. If the lender does not own the item at the time of conversion, the transaction is prohibited. Even if the borrower later returns produce, he is only obligated to repay the original monetary value.

Takeaway

Chapter 10 teaches that lending produce must be done with care and clarity. By avoiding fixed repayment dates and ensuring the item is present or priced, one protects the transaction from resembling ribit. Halacha safeguards fairness in commodity lending, ensuring that generosity does not become exploitation.