Agricultural Waqf: Concept, Benefits, and Challenges in the Contemporary Context

Agricultural Waqf: Concept, Benefits, and Challenges in the Contemporary Context

Muhamad Farhan Bin Ishak¹, Noor Syahidah Binti Mohamad Akhir²*

¹Student Posgraduate, Academy Contemporary of Islamic Studies, Universiti Teknologi MARA Kedah Branch, Campus Sungai Petani, 08400, Merbok, Kedah, Malaysia

²Senior Lecturer (PhD),  Academy Contemporary of Islamic Studies, Universiti Teknologi MARA Kedah Branch, Campus Sungai Petani, 08400, Merbok, Kedah, Malaysia

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.914MG0017

Received: 21 January 2025; Revised: 31 January 2025; Accepted: 03 February 2025; Published: 04 March 2025

ABSTRACT

Agricultural land is an important area for ensuring food security. However, developing agriculture land has many challenges, this issue has led to the abandoned agricultural land. Agricultural Waqf has grown to solve these contemporary socio-economic challenges, particularly in the areas of food security and economic empowerment. This paper investigates the concept, benefits, and challenges of agricultural waqf in a contemporary context. Using qualitative method, including document analysis such as article, thesis and credit website. This study defines agricultural waqf as a modern mechanism that links land use with social and economic purposes through contracts such as muzara’ah and musaqah and ijarah. The findings show that agricultural waqf contributes significantly to food security by promoting local agricultural productivity and restore ecosystem, reducing dependence on imports, and stabilizing food supply chains. However, challenges such as limited public awareness, insufficient funding, and management inefficiency make it can’t get its full potential. The paper concludes that agricultural waqf can help to sustainable development, offering solutions to critical issues in food security and economic empowerment. Future research is recommended to explore models and partnerships that can increase the impact of agricultural waqf initiatives.

Keywords: Agricultural waqf, food security, economic empowerment, Islamic philanthropy, Waqf management

INTRODUCTION

Waqf refers to the separation and transfer of property by the waqif to be used permanently or for a certain period for welfare and public interest purposes in accordance with sharia principles (Kurniasih et al., 2024). It acts as an Islamic financial instrument that supports the distribution of wealth and realizes the welfare of the community. Through this concept, waqf property cannot be inherited, sold or gifted, while its benefits are to eligible recipients (Kurniasih et al., 2024). The potential of waqf in social and educational development is widely recognized including agricultural waqf that uses land and agricultural resources to strengthen the welfare and economy of the community.

In Malaysia, waqf management is regulated through the State Islamic Religious Administration Enactment or State waqf Enactment, which gives power to Majlis Agama Islam Negeri (MAIN) as the Sole Trustee (Suhaimi et al., 2021). Waqf in Malaysia is divided into general waqf and special waqf, covering assets such as land, buildings, gold, and cash, which are managed to meet the welfare needs of the community. waqf am refers to waqf performed for public or general welfare, while waqf khas refers to waqf set aside for specific purposes, such as agricultural waqf, where the donated land is designated for agricultural use (N. M. Kamaruddin et al., 2024).

In the contemporary era, waqf has evolved in line with modern developments. Contemporary waqf includes cash waqf, share waqf, agricultural waqf, and medical waqf. Agricultural Waqf who is one of the contemporary waqf plays a significant role in strengthening food security and promoting socio-economic well-being. Through the transfer of land ownership to waqf institutions, the land is managed and utilized productively for agricultural activities, ensuring a sustainable food supply (Fazial et al., 2023). The proceeds from these activities are channeled to help the needy, in line with the main objective of waqf as a mechanism for wealth distribution. Additionally, the development of agricultural waqf initiatives has the potential to create employment opportunities for marginalized communities, provide a stable source of income, and contribute to reducing socio-economic gaps. This progression highlights the role of agricultural waqf as a contemporary mechanism for fostering economic empowerment and societal welfare.

However, the concept of agricultural waqf can be improve to help the community such as the farmers, government and many people who is involved in the area of socio-economic. Addressing these challenges is essential to unlocking the full potential of agricultural waqf as a tool for socio-economic development. Therefore, further research is needed to explore the opportunities, challenges, and best practices for implementing agricultural waqf initiatives, ensuring their sustainability and long-term impact on the community

LITERATURE REVIEW   

The History of Agricultural Waqf in Islam

Waqf was first established by Umar ibn al-Khattab, who owned a fertile and productive agricultural land in Khaybar. Desiring to contribute to the welfare of the Muslim community, Umar consulted Prophet Muhammad on how to donate the agricultural land. The Prophet advised Umar to preserve the land and manage it while dedicating its proceeds for the benefit of the community (Wijaya et al., 2023). Next, during the Umayyad period, the judge of Egypt, Taubah bin Ghar Al-Hadhrami, established the first waqf institution under judicial supervision during Caliph Hisham bin Abd Malik’s reign. This institution was spread throughout the Islamic world, including Basra. waqf administration was placed under the Judiciary Department, which ensured the proceeds were properly allocated to those in need(Abu Bakar & Gunardi, 2023).

After that, on Abbasid period, the “Shadr al-Wuquf” waqf institution was introduced to manage Waqf affairs, and the practice continued to spread alongside the expansion of the Abbasid Empire. In Egypt, Khaisabah bin Kalthum al-Tahbibi was the first to endow his house, which was later converted into the Amr ibn al- ‘Aas Mosque (Abu Bakar & Gunardi, 2023). During this period, agricultural waqf grew significantly, with nearly all agricultural lands becoming waqf properties managed by the state and overseen by Baitulmal (Abbas, 2018).

The concept of Waqf has evolved over time, with contemporary innovations like contemporary waqf gaining significant attention as an ideal platform for charitable giving. Several innovative waqf programs have emerged, such as cash Waqf, productive waqf, Cash Waqf-linked Sukuk (CWLS), benefit waqf, professional waqf, and stock waqf (W. Mahri et al., 2024). In conclusion, agricultural waqf as the contemporary Waqf has a long and impactful history in Islam, playing a crucial role in the socio-economic development of Muslim societies. With effective management and innovative approaches, agricultural waqf remains a powerful tool for fostering sustainable community welfare.

Contemporary Waqf in Malaysia

Waqf, an Islamic institution, can be simply defined as property donated in the way of Allah for public benefit. According to Portal Rasmi Yayasan Waqf Malaysia, (2024), the term waqf is defined as property whose rights are withheld from sale, inheritance, gift and will while maintaining its physical or source and its benefits are used for welfare with the intention of bringing the waqf holder closer to Allah SWT.

In general, waqfs are known as a way of distributing assets to ummah such as cemetery Waqfs and mosque construction waqfs. However, waqfs in contemporary era have developed in line with modernity, leading to more widespread use of waqfs, (Sulaim et al.,2023).

Nowadays, there are many contemporary waqf products that has been implement in our country. The various of waqf products showed that the development of Waqf is growing rapidly. Agricultural Waqfs are a type of waqf applied in the agricultural field, it is way to change perceptions of how Waqfs are implemented such as mosque waqfs, pondok waqfs, etc. In general, agricultural waqfs involve the transfer of land ownership to the waqf board which is responsible for managing and utilizing it productively in agricultural activities (Talib et al., 2023).

In Malaysia, Majlis Agama Islam Negeri (MAIN) is the main Trustee for all matters related to waqf in each state based on the provisions contained in Article 74 of the Federal Constitution(Talib et al., 2023). Every state had a different legal framework that can be seen in table,

Table 1:Legal Framework of Waqf in Each State

Source: Mohamad Suhaimi, 2018

The Role of Agriculture Waqf in the Economic of Malaysia

Waqf, as an Islamic philanthropic mechanism, comprises four main pillars: the donor (al-waqif), the endowed asset (al-mawquf), the beneficiary (al-mawquf ‘alaih), and the declaration of endowment (al-sighah). It plays a crucial role in economic development by supporting education, healthcare, and the improvement of income and living standards (Nazeri & Ab Rahman, 2021). Through the allocation of assets and resources for public welfare, Waqf contributes to social well-being, wealth distribution, and economic stability within communities.

One of the key contributions of waqf lies in its potential to alleviate poverty (Salaudeen, 2024). Waqf institutions provide essential support community projects such as repairing roads, aiding people with disabilities, constructing mosques and schools, and offering financial support to scholar, students and the one who need, waqf initiatives can help beneficiaries achieve long-term economic independence.

Next, waqf contribute in creating various types of new jobs that are sustainable (Nur Adevita et al., 2023). Land endowed as waqf can be utilized for agriculture, industrial purposes, or leased to generate income. For instance, agricultural waqf enables productive use of land, boost agricultural productivity, food security and employment, and reduce poverty (Al-Daihani et al., 2024). Similarly, waqf properties in urban areas generate rental income, which is reinvested into community development projects.

Lastly, waqf make economic growth by using cash Waqf (Fairuz Ramli et al., 2022), cash waqf and corporate Waqf, have further expanded the scope of economic contributions. Cash Waqf allows individuals to contribute smaller amounts collectively, leading to a significant pool of funds. These funds are invested in productive sectors, and the profits are used for charitable purposes, ensuring a continuous cycle of community benefit. It’s can strengthen the Waqf social financial institution ecosystem, and support infrastructure sector growth.

In conclusion, waqf serves as a dynamic tool for economic empowerment, addressing socio-economic disparities, and enhancing the overall well-being of communities. By fostering sustainable development and promoting social justice, waqf continues to be a cornerstone of economic development in the contemporary world.

Waqf Agriculture Project

Agricultural Waqf is a type of waqf utilized in the agricultural sector, representing an expansion beyond traditional uses such as places of worship. This concept has significant potential to reduce poverty and promote sustainable development. Several agricultural waqf projects implemented globally, including in Indonesia, Jordan, and Malaysia, have demonstrated their positive economic and social impacts.  In Indonesia, an agricultural waqf project managed by Pimpinan Ranting Muhammadiyah (PRM), a local Islamic organization in Penatarsewu, Sidoarjo, utilizes 13,613 m² of waqf land cultivated with rice. The land is divided into 8 plots, managed by farmers through an mukhabarah contract system, with a profit-sharing ratio of 60% for farmers and 40% for PRM. This project not only supports local food needs but also improves the farmers’ economic well-being, with yields from the 2019 rainy season generating approximately Rp. 7,944,700, which was channelled into education, health, and religious programs. (Rahman & Widiastuti, 2020). In Jordan, agricultural waqf projects integrate land management with money waqf, optimizing resources for agricultural and tourism development. The Ministry of Endowments manages 79 dunums of land planted with 1,346 olive trees, grapes, dates, and almonds, while another 84 dunums host 1,600 similar crops. These efforts combine economic sustainability with tourism, leveraging natural resources for broader societal benefit (Ubaid, 2017).

In Malaysia, agricultural waqf initiatives have successfully transformed idle waqf land into productive resources. For example, the Perkaya Sdn Bhd Palm Oil Plantation in Terengganu, endowed in 1992, spans 830 acres and generates approximately RM1.3 million annually, contributing to local economic development (Talib et al., 2023). In Selangor, a MD2 pineapple planting project on 6.2 acres of Waqf land rented from the Selangor Waqf Corporation (PWS) produces up to 1–2 metric tons of pineapples weekly, supporting a farmer’s livelihood (Selangorkini, 2022). Similarly, the Penang Islamic Religious Council (MAINPP), in collaboration with the Malaysian Pineapple Industry Board (LPNM) and Penang Zakat Board, oversees a 2.43-hectare Waqf pineapple plantation in Kampung Tun Sardon, Jalan Ara Kuda. This project, managed by asnaf groups, involves 140,000 pineapple trees, with proceeds distributed as bonuses alongside regular allowances. These initiatives highlight Malaysia’s strategic use of waqf for economic empowerment and poverty alleviation, particularly among marginalized groups like the asnaf.

METHODOLOGY

This article is a concept article, document analysis used in qualitative data research, which refers to descriptive information in oral or written form related to human behaviour. The main sources of qualitative data include written materials such as documents, correspondence, recordings, and case histories. The data collection process in this method involves in-depth document analysis, which includes studying the content of printed materials, media broadcasts, or images to understand and interpret the meaning conveyed (Jasmi, 2012). This approach is implemented systematically by identifying, categorizing, and interpreting units of information contained in the content. Therefore, this method is suitable for analysing data to meet the study objectives.

DISCUSSION

Concept of Waqf Agriculture

Waqf agriculture is a subset of waqf (Islamic endowment) where agricultural land or related resources are dedicated as a Waqf for charitable or public benefit (Al-Tulaibawi et al., 2024). This concept utilizes productive land and its outputs to support social, economic, and environmental objectives in accordance with Islamic principles. By dedicating agricultural assets for Waqf, the community can benefit through increased local food production, job creation, and reduced reliance on imports (Ishak et al., 2025). Muhammad al-Syarbani in his book al-Iqna states that Waqf means withholding property rights and handing them over to Allah SWT for a specific benefit. This principle aligns with the core values of agricultural Waqf, which emphasize permanence, immutability, and public benefit, and can be effectively supported through various Islamic contract,

One of these contracts is muzara’ah, which is a partnership between the Waqf institution and the farmer, where the waqf provides the land and the farmer contributes labor and expertise. The profit is shared according to an agreed ratio, ensuring productive use of the land and benefiting both parties (Puspitasari, 2017).

Figure 1 : Muzara’ah Contract

Next is musaqah contract which is involves a collaboration between the waqf institution and farmers to utilize agricultural land. Capital is raised from public or Waqf givers, eligible farmers are selected to cultivate the land, and the sales revenue is shared between both parties based on agreed terms, ensuring the land’s productivity and mutual benefits (Mohamed & Mohd Shafiai, 2021).

Figure 2: Musaqah Contract

Lastly, the ijara contract involves the waqf institution leasing agricultural land or assets to a farmer or organization for a fixed period and agreed rental fee. The rental income is used for charitable purposes, such as funding social projects, education, healthcare, or infrastructure development, while ensuring that the land remains productive and not left idle (Azizuddin & Azam, 2021).

Figure 3: Ijarah Contract

By using contracts like muzara’ah, musaqah, and ijara, Waqf institutions can maximize the productivity and impact of agricultural assets. This can be help to increase social welfare, economic empowerment, and environmental stewardship.

Benefit of Waqf Agriculture 

Agricultural Waqf offers immense potential to address critical socio-economic challenges while adhering to Islamic principles. It contributes significantly to food security, income generation, and economic growth, particularly in rural areas, fostering sustainable development and community well-being. The benefit of Agriculture Waqf shown is the Diagram:

Figure 4: Benefit of agriculture Waqf

Food Security

Agricultural Waqf plays a very important role in ensuring food security by increasing local agricultural production, addressing food shortages, and reducing dependence on imported products in Malaysia. The problem of food shortages in rural areas is more pronounced than in urban areas because food in urban areas is abundant and available in various forms that are easily available either at farmers’ markets, grocery stores, especially large supermarkets that import a lot of food from abroad .

Agricultural Waqf provides a mechanism to help the community by utilizing available resources effectively. Through agricultural Waqf initiatives, idle land that is suitable for agriculture can be revived by planting basic crops, ensuring a continuous supply of nutritious food for local needs. This can support improving the living standards of farmers and rural communities and directly help reduce the problem of food shortages and hunger among vulnerable populations.

In addition, one of the most important contributions of agricultural Waqf is to reduce the country’s dependence on imported food sources. When global crises such as pandemics, climate change, and economic uncertainty occur, it will cause world food prices to rise because high demand exceeds the market and this will cause import prices to continue to rise (Talib et al., 2023).

According to the (Yayasan Waqf Malaysia, 2022)), through the WATANI (Integrated Agricultural Endowment) project, which covers an area of ​​10 acres, the endowment land has been planted with Golden Melon, fertigation chili, corn, Yankee pineapple, MD2 pineapple, and horn bananas, it is expected to produce a production yield of RM90,000 to RM240,000, this will cause the country’s dependence on imports to decrease, and market prices can be stabilized, because supply exceeds demand. Increasing local production and strengthening a self-sufficient food system through an agricultural endowment mechanism, can help develop a stronger national food security framework and resilience to external shocks.

Income Generation

Agricultural Waqf functions as a source of sustainable income generation, sustainable income can increase the economy. Agricultural land that uses the agricultural waqf method as a medium to conduct agriculture will obtain facilities and profits between the Waqf giver and the Waqf recipient. This approach can be obtained through Islamic contracts such as muzara’ah, ensuring fair and equal distribution of income between landowners and managers according to the agreed rate. This process not only maintains the operation of Waqf institutions but also expands their social impact.

Agricultural Waqf provides a stable source of passive income by providing employment opportunities to low-income groups (Haruna Babatunde et al., 2015). These groups will be given work to manage crop-related matters such as managing agricultural land and planting. The results of planting activities on Waqf land crops provide a lucrative return and can be distributed to workers as passive income and contribute to economic growth, especially in rural areas. For example, the Pineapple Farmers Project by Zakat Pulau Pinang is a project carried out in collaboration with four other agencies. A total of 140,000 pineapple trees have been planted with the aim of utilizing idle waqf land for pineapple cultivation and helping the needy. All profits from the sale of the 140,000 pineapple trees planted will be returned to the needy as a bonus, in addition to a monthly allowance that is also given periodically.(Amran, 2021)

In conclusion, this Initiative can improve the quality of life of rural residents can also drives local and national economic growth. Its multifaceted benefits address critical community needs such as food security, income stability, and economic empowerment, making it an invaluable tool to improve community livelihoods and promote equitable growth.

Ecosystem

Agricultural Waqf also plays an important role in contributing to the purification and restoration of land. Agricultural land that is endowed can help improve the condition of the ecosystem by planting trees, maintaining the soil, and preventing soil erosion. Agricultural Waqf can increase the level of organic carbon in the soil through better soil management, which in turn increases soil fertility and reduces climate change (Lessmann et al., 2022).

With the right approach to land management, agricultural Waqf not only helps improve the condition of abandoned land but also contributes to sustainable land restoration, which provides long-term benefits for ecosystems and communities in line with the core values of Islam, which emphasize the importance of environmental conservation and social responsibility. Through the method of agricultural waqf, the waqf can receive ongoing rewards while contributing to society and the environment. This approach not only reinforces the importance of environmental conservation but also strengthens the concept of waqf as a tool for social well-being and community empowerment.

Challenges of Agricultural Waqf

Agricultural Waqf has great potential in promoting sustainable development and economic empowerment, especially in addressing issues such as food security, poverty reduction, and environmental conservation. However, to obtain quality results, several challenges hinder the effective implementation of agricultural waqf. Among the main challenges is knowledge and awareness that still needs exposure about the concept of agricultural waqf. In addition, the lack of sufficient funds and financial resources to start and maintain agricultural waqf projects is also a major obstacle. In addition, agricultural waqf projects are also vulnerable to the adverse impacts of climate change and environmental factors, such as extreme weather, floods, or droughts, which can affect agricultural yields and the success of the project.

Figure 5: Challenges of Agricultural Waqf

Limited knowledge

One of the challenges in the implementation and development of agricultural waqf is the lack of knowledge and awareness among individuals, landowners, and local communities. The concept of agricultural waqf, its operations, and the benefits that can be obtained from it are foreign to the general public in line with research data from W. Mahri et al., (2024), state that involvement in agricultural waqf is influenced by the level of knowledge. This knowledge gap has led to limited public interest and involvement in agricultural waqf. Lack of knowledge in Waqf limits the true potential of agricultural waqf, thus slowing down agricultural Waqf projects to grow and achieve long-term sustainability.

Disclosure of the concept of agricultural Waqf by Waqf institutions is one of the factors behind the lack of knowledge in the field of agricultural waqf. According to Hassan et al., (2021), Effective promotion can increase awareness of waqf, increasing the level of awareness of the concept of agricultural waqf can increase socio-economic development in the waqf sector. Low understanding among the community of the purpose of Waqf in ensuring the well-being and interests of property ownership by Muslims also worsens the situation.

Furthermore, differences in agricultural waqf laws in each state make it difficult for the public to know the method or methods of implementing agricultural waqf. In Malaysia, the State Islamic Religious Council (MAIN) is the main trustee for all matters related to waqf in each state based on the provisions contained under Article 74, (Talib et al., 2023). Each State has its own act and different methods of implementing waqf and will be assisted by the Department of Waqf, Zakat and Hajj (JAWHAR). Differences in policies or legal frameworks regarding agricultural waqf result in confusion and reluctance of landowners to endow their assets with waqf. This indirectly hinders efforts in the development of agricultural waqf.

Lack of fund

Lack of adequate funds is one of the challenges in implementing agricultural waqf. Adequate financial resources are essential to ensure the smooth running of agricultural Waqf projects. Funds are needed to purchase agricultural equipment, develop essential infrastructure such as irrigation systems, storage facilities, and pay salaries to farm workers.

Without adequate funds, waqf land may not be fully utilized or managed, which ultimately leads to reduced productivity and limited income. MAIS (Selangor Islamic Religious Council) confirmed that lack of financial resources prevents the optimal waqf property, thus restricting the development of waqf.

Azizan et al., (2021) stated that this problem of lack of financial resources not only affects the operational aspects of Waqf land but also limits the expansion of new Waqf initiatives. For example, In Sabak Bernam, Selangor, there was a case where a 25-acre waqf land could not be cultivated due to the lack of sufficient financial resources. The proposed oil palm plantation had to be postponed and stalled due to a lack of development capital to implement the project of RM26,000 (Mat zain et al., 2022). The high reliance on voluntary contributions and donations, which are uncertain, will increase the level of difficulty in sustaining long-term projects or investing in modern agricultural innovations.

Management of Waqf

The challenges of agricultural waqf is the management of waqf assets. The main issue is the lack of competent nazhirs, waqf managers who are responsible for ensuring that the use of Waqf assets is done correctly and effectively. The professionalism of the nazhir must have convincing characters, namely equality, equity, loyalty, and accountability (Laelah, 2020). A Nazir or waqf manager who does not achieve sufficient levels of transparency and accountability will cause donors and stakeholders to be less interested in Waqf initiatives. Good governance in an organization will lead to encouraging performance. This lack of expertise often leads to inefficient management practices and suboptimal use of Waqf resources, which in turn prevents the full potential of benefits.

According to M. I. H. Kamaruddin et al., (2024), the absence of uniform reporting standards in waqf management also contributes to management problems. This will make the systematic reporting process difficult, and there will even be problems with transparency and accountability in the management of waqf assets. This deficiency has caused waqf management to fail to communicate information to stakeholders, thus reducing public trust in waqf initiatives. Therefore, uniform reporting standards are very important to ensure that every information regarding the use and impact of waqf assets can be communicated clearly, thus helping to increase public credibility and confidence in waqf management.

The absence of professional and skilled management has an impact on management problems. Ineffective operations result in low productivity, reduced income, and failure to achieve waqf goals, especially in improving economic well-being and addressing social issues such as food security. waqf managers, as planners and managers of Waqf programs in the agricultural sector, need to increase their capacity, professionalism, and transparency to strengthen public trust and effectively achieve Waqf goals (Sunarmo & Majid, 2024). Without strategic planning and innovative approaches, agricultural waqf projects continue to lag behind and are unable to adapt to modern challenges such as climate change and growing market needs.

CONCLUSION

Agricultural waqf is an islamic financial system that has the potential to address socio-economic challenges. agricultural waqaf act as a medium to empower the economy and guarantee the foods security sector in addition to reduce the rate of illustrated lands suitable for agriculture. this method can be implemented by using contracts such as muzara’ah, musaqah, and ijara. agricultural waqf is able to maximize the productive use of land and adhere to islamic principles. among the benefits of implementing agricultural waqf are improving food security, generating sustainable income by providing employment opportunities, and supporting environmental sustainability.

However, challenges such as limited public awareness, lack of funds, and inefficient management prevent agricultural waqf from being fully utilized. future studies can be developed by examining the success of agricultural waqf projects and assessing the extent to which they can contribute to food security and socio-economic development.

Future research should be conducted by focusing on empirical studies to assess the long-term impact of agricultural waqf projects, especially in contributing to national food security and economic empowerment. by addressing these challenges and leveraging the inherent benefits, agricultural waqf can be a key medium in achieving equitable socio-economic goals, ensuring food security, and promoting environmental conservation in line with islamic principles.

ACKNOWLEDGEMENTS

This article is a preliminary study under the Fundamental Research Grant Scheme (FRGS) (FRGS/1/2024/SSI03/UITM/02/1), titled “The Madani Agro-farming Model: Integrating Agricultural Waqf and Musaqah Contracts for Sustainable Food Security.” We extend our gratitude for the research funding and the sponsorship of this article’s publication.

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