We reviewed request no. 209 for the year 2009 and which includes the following:

    What is the ruling for zakat on the poultry industry, outlined as follows:

    The poultry industry can be divided into two areas of production: poultry raised for meat or for egg production. There are several stages to each area of production:
Grandparent and breeder stock
The age of chickens in this category is approximately 65 weeks, divided as follows:

1. Chicks are raised from the 1st day after hatching until they reach 23 weeks which is when they reach sexual maturity.
2. During the remaining 42 weeks, a rooster fertilizes the hens. Fertilized egg production occurs during these weeks at varying rates of production depending on the flock's age. Productivity decreases with age.
Note: Eggs produced from these stocks are primarily used to produce chickens for the next stage. The eggs are sent to hatcheries to produce chicks and laying hens.

Costs

    1. The 1st 23 weeks:
• Cost of purchasing the chicks.
• Medicine.
• Fodder.
• Maintenance.
• Vaccinations.
• Disinfectants.
• Fuel and oil (heating expenses).
• Electricity.
• Periodical testing of the birds to follow up on the flock's health.
• Wood shavings (for bedding pens).
• Administrative costs (telephone bills, cleaning supplies etc …).
• Depreciation of equipment and buildings accumulated over the year or month depending upon their life expectancy.
• Wages and incentives.
• Operating costs.

    2. The production period
• The costs of this period are the same as above minus the cost of purchasing the chicks and plus the cost of raising the birds. Costs are distributed over the weeks of production.
• The end products of this period are viable eggs. Costs include the cost of production plus the cost of maintenance.

The hatcheries

• Eggs are supplied to the hatcheries and placed in incubators where they remain for 21 days under specific temperature and humidity levels. The chicks are sold after hatching.
• Some eggs do not hatch. The end product of this stage—the chicks—represents 40% of the total number of eggs placed in the incubator and this percentage is the same for grandparent stock and layer hens. The hatching percentage for breeder stock of broilers may reach up to 80-85% and this is called the hatching percentage.

Hatching expenses

• Cost of running hatcheries and incubators such as electricity and disinfectants.
• Wages of employees in the hatcheries.
• Marketing expenses (transporting the chicks to clients and wages of vets).

Cost of Layers (birds which produce table eggs)

    The expenses are the same as for grandparent and breeder stock. However, instead of sending the eggs to hatcheries, they are sold for consumption.

Expenses of chicken raised for meat

    These are raised from the 1st day after hatching until they reach 45 days when their weight ranges between 1800 grams and 2000 grams. They are hatched from eggs produced by hens raised for this purpose. Costs in this stage include:

• The purchase of chicks.
• Fodder.
• Operational costs (electricity).
• Vaccinations.
• Medicine.
• Disinfectants.
• Fuel and oil (heating expenses).
• Veterinary services (tests, technical supervision).
• Renting and depreciation (depreciation costs are only included when the farm is privately owned).
• Wages and incentives.

    Zakat is a rite that encompasses the meanings of growth and purification of wealth. However, it is an act of worship which is dictated for the most part by revelation. As such, it is paid on particular kinds of property under certain conditions, in a specific amount and is distributed to particular classes of recipients.

Zakat and Business Activities

    The Shari'ah clearly defined the aim and channels of zakat, and one of those recognized areas is trade goods; therefore zakat is payable on commercial activities but not on industrial, community services (such as schools) or productive ones.
    Business activities include both trade activities and exploited assets.

Trade activities 

    These include: buying to sell for profit without the activity involving industrial, productive, or exploitive factors. If a business meets the conditions of buying with the purpose of selling for profit then it is a trade activity and its zakat is classified under zakat on trade goods. This kind of zakat is calculated by adding the capital of the business to the profit after one lunar year passes and after deducting the value of any fixed assets and any debts. The zakat rate, one quarter of a tenth, is paid on the resulting amount.

Exploited assets: 

    They are those assets which are not profitable per se but which generate income and provide benefit to the owners by renting them out. These include apartments or means of transportation, the sale of products produced by factories and housing companies which buy land and construct residential buildings to sell, and producer animals such as cows kept for milk production, sheep for wool, animals raised for meat and poultry raised for meat or eggs.

The Fatwa 

    There is no zakat on exploited assets even though some contemporary scholars who are inclined to expand the spectrum of zakatable property maintain their zakatability. However, we opine to conform to the text on zakat by adhering to the channels mentioned therein and to relieve people from paying zakat on non-zakatable property not mentioned in the texts. Moreover, categorizing industrial activities and productive assets as non-zakatable is crucial in encouraging and drawing people to these activities. Moreover, jurists who maintain the non-zakatability of exploited assets are not oblivious to the needs of the poor and the destitute. They know that the growth and expansion of such activities will only increase job opportunities as well the flow of money in the market which, in turn, will benefit the society as a whole including the poor and the destitute and others in need, indirectly providing them with welfare.

The Ruling

    There is no zakat on raising poultry for meat or selling their produce, whether eggs or chicks. Zakat is only payable on the net cash profits generated from this business activity or any other if it reaches nisab [En. the minimum amount upon which zakat is due] and after one lunar year passes.