Farmers sometimes engage in a transaction which involves giving their rice harvest (or other crops) to merchants without receiving immediate payment. When the farmers need to collect the price of their harvest, they are offered the prevailing market price. 

The farmers know that merchants are entitled to dispose of these crops while they are in their possession before payment. In the event of any disagreement over the price, a farmer may take back his crops without any increase or decrease in its amount and sells them to another merchant. What is the ruling for this type of transaction that is prevalent in many villages?

This kind of transaction can be amended and legally conducted in the following

manner: the farmer authorizes the merchant to sell the crops on his behalf so that the sale is in favor of the farmer by virtue of the terms of this authorization. In this manner, the authorization is free from any legal violations or deception which is unlawful in Islamic law; thereby both parties achieve their objectives without any legal violations.

The ruling

Based on the above, for the transaction to be valid, the farmer must commission the merchant to sell the crops on his behalf and the merchant must accept this authorization.