The Salam Contract as an Agricultural Financing Instrument to Support the Achievement of Sustainable Development Goals (SDGs)

Salam contract are cash payment upfront and delivery of the commodity at the end. This characteristic is highly relevant to the needs of agricultural financing. Despite having an adequate normative and regulatory basis, the use of the salam contract in Islamic banking practices is still very limited. The purpose of this study is to analyze the contribution of the salam contract as an agricultural financing instrument to the achievement of SDGs 2, SDG 8, and SDG 12, and to formulate an integrative framework that connects the contract's characteristics, financing mechanisms, development impacts, and SDG targets. This study uses a normative legal method with a statutory and conceptual approach, reinforced by secondary empirical evidence from the Statistics Indonesia (BPS), the Financial Services Authority (OJK), and the Central Bank of Indonesia (BI), as well as previous research. Primary and secondary legal materials are analyzed qualitatively and normatively using deductive and prescriptive reasoning. The research findings show that advance payments, price certainty, clarity of commodity specifications, and certainty of delivery times have the potential to support productivity and food security in SDG 2, expanding access to financing and productive economic activities in SDG 8, and production and supply chain efficiency in SDG 12. However, these contributions are conditional and require strengthening farmer institutions, offtaker certainty, risk mitigation, and regulatory support from the government. This research offers an integrative framework that prioritizes the optimization of salam contracts by considering sharia compliance, financial viability, and sustainability impact.

Salam Contract ; Islamic Banking; SDGs; Sustainable Agriculture

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