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Profit and loss sharing in agriculture: An application of Islamic banking

Author

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  • Laurence M. Crane

    (Department of Agricultural Economics, North Dakota State University)

  • David J. Leatham

    (Department of Agricultural Economics, Texas A&M University)

Abstract

This study reviews profit and loss sharing instruments used in Islamic banking. It is argued that US financial intermediaries can use profit and loss sharing instruments to provide external equity capital needed to finance agricultural production. Such an innovation would help reduce financial risk in agriculture. © 1993 John Wiley & Sons, Inc.

Suggested Citation

  • Laurence M. Crane & David J. Leatham, 1993. "Profit and loss sharing in agriculture: An application of Islamic banking," Agribusiness, John Wiley & Sons, Ltd., vol. 9(4), pages 403-412.
    • Handle: RePEc:wly:agribz:v:9:y:1993:i:4:p:403-412
    DOI: 10.1002/1520-6297(199307)9:4<403::AID-AGR2720090410>3.0.CO;2-X
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    References listed on IDEAS

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    1. Stephen F. Matthews & David H. Harrington, 1986. "Analysis of Nonfarm Equity Forms of Investment Applicable to Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1324-1329.
    2. Matthews, Stephen F. & Harrington, David H., 1986. "Analysis Of Nonfarm Equity Forms Of Investment Applicable To Agriculture," 1986 Annual Meeting, July 27-30, Reno, Nevada 278456, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. John R. Fiske & Marvin T. Batte & Warren F. Lee, 1986. "Nonfarm Equity in Agriculture: Past, Present, and Future," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1319-1323.
    4. Robert A. Collins & H. Joseph Bourn, 1986. "Market Requirements and Pricing for External Equity Shares in Farm Businesses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1330-1336.
    5. John R. Brake & Michael D. Boehlje, 1985. "Solutions (or Resolutions) of Financial Stress Problems from the Private and Public Sectors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(5), pages 1123-1128.
    6. Philip M. Raup, 1986. "Use of Equity Capital in Financing Future Agricultural Production: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(5), pages 1337-1339.
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    Citations

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    Cited by:

    1. Hassan, M. Kabir & Aliyu, Sirajo, 2018. "A contemporary survey of islamic banking literature," Journal of Financial Stability, Elsevier, vol. 34(C), pages 12-43.
    2. Laurence M. Crane & David J. Leatham, 1995. "External equity financing in agriculture via profit and loss sharing contracts: A proposed financial innovation," Agribusiness, John Wiley & Sons, Ltd., vol. 11(3), pages 223-233.
    3. Beal, Diana J., 1996. "Emerging Issues in Risk Management in Farm Firms," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 64(03), pages 1-12, December.
    4. Seo, Sangtaek & Mitchell, Paul D. & Leatham, David J., 2008. "Risk Sharing and Incentives with External Equity Financing and Crop Insurance," Staff Papers 92204, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.

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