ZAKAT ON AGRICULTURAL PRODUCTS
In the name of Allah the Gracious, the Merciful
Agricultural produce is zakatable. Zakat is due on everything land produces that can be eaten and stored (such as grains, beans, fruit, dates, etc.)
Nisab for agricultural products is 653 kilograms. This is the nisab on agricultural yields.
There are two agricultural types of product:
(1) At cost, and (2) without cost. The Zakât rate changes accordingly (Fiqh az-Zakât, 228-229, 242):
1. Output from Irrigated Land: Zakât rate is 5 percent of net value of harvest—after deduction of costs, including irrigation, fertilizer, and operating expenses.
2. Output from Unirrigated Land: Zakât rate is 10
percent of gross value of harvest, since land is being
watered mostly by rain, natural springs (There are
straight mathematical percentage changes if land is partially irrigated for half the time, a third of the time,
a quarter of the time, etc.).
Is Zakât Due on Agricultural Land?
No. There is no Zakât on land value, only on value generated (i.e., the harvest).
If land is leased to a farmer, the farmer pays Zakât on the crops, the owner on the rent received. Zakât is 2.5 percent of net rental income for the landowner. (Fiqh az-Zakât, 255-256; Zakât Calculation, 27).
May Allah make it easy for us.