This excerpt is taken from Dr. Yusuf al-Qaradawi's book Halal and Haram in Islam, translated into Urdu by Muhammad Tahir Naqqash.
Sharecropping
The third method is that the owner of the land gives his land to a person who cultivates it using his own tools, seeds, and animals on the condition that a fixed share of the produce, agreed upon by both parties, for example half or one-third, will be given to the owner. It is also permissible for the landowner to provide the cultivator with seeds, tools, and animals. This method is called Muzara'ah, Misaqah, and Mukhabarah.
It is in the Sahihain that the Prophet Muhammad ﷺ made a deal with the people of Khaybar on half of the produce.
Reference: Bukhari, Book of Agriculture, Chapter on Muzara'ah with Half Share and Similar, Hadith: 2328; Muslim, Book of Misaqah, Chapter on Misaqah, Hadith: 1551
The jurists who consider this type of Muzara'ah valid argue from this mentioned hadith. They say that this is an authentic and well-known matter which the Prophet Muhammad ﷺ implemented until his death.
After the Prophet ﷺ, the Rightly Guided Caliphs (may Allah be pleased with them) and those after them continued to follow this method. There was no house in Medina whose people did not practice this method. The pure wives of the Prophet ﷺ (may Allah be pleased with them) also continued to engage in this method after the Prophet ﷺ. There is no valid reason to annul such an established practice.
Reference: Al-Mughni - Vol: 5, p: 384
Corrupt Cultivation
One type of sharecropping was prevalent during the time of the Prophet, peace be upon him, and from which he prohibited the Companions, may Allah be pleased with them. This was because it involved a kind of uncertainty and an element of deception, which could lead to disputes. Moreover, this method was explicitly against the spirit of justice. Thus, the landowner would make a deal with the cultivators on the condition that they would be entitled to a specified portion of the produce of the land, for example: one-fourth share, or a fixed quantity of grain, and the remaining portion would either go entirely to the cultivator or be divided between them, for example, half and half. According to the Prophet’s, peace be upon him, opinion, justice required that both parties share in the entire produce, whether it was less or more. It was not correct that one party’s share be fixed and that party alone benefit while the other bears the loss, because it might happen that there would be no produce from the other part of the land. In such a case, it was necessary that both receive their share of the produce according to the agreed proportion.
Imam Bukhari, may Allah have mercy on him, narrated from Rafi’ bin Khadij, may Allah be pleased with him, who said that those of us who had land often engaged in sharecropping. They would lease the land in such a way that the produce of one corner of it was reserved for the landowner, but sometimes the produce would not be in the specified part but in the remaining land, and sometimes it would be in the specified part and not in the remaining land. For this reason, we were prohibited from dealing in this manner.
Reference: Bukhari, Book of Agriculture, Chapter (7), Hadith: 2327
Another hadith of Bukhari states that the Prophet, peace be upon him, said:
“What do you do with your fields?” The people said: “We give them on sharecropping,” meaning on the condition of one-fourth of the produce or a fixed quantity of dates and barley. The Prophet, peace be upon him, said: “Do not do that.”
Reference: Bukhari, Book of Agriculture, Chapter: Where the Companions of the Prophet did not sympathize with each other, Hadith: 2339; Muslim, Book of Sales, Chapter: Renting land for food, Hadith: 1548
This makes it clear that the Prophet, peace be upon him, was very eager to establish complete justice in society and wanted to keep the members of society away from all matters that could cause disputes. It is necessary for both the landowner and the farmer to deal generously and leniently with each other. For this reason, the hadith states that the Prophet, peace be upon him, did not declare sharecropping unlawful but instructed to treat each other with leniency.
Reference: Tirmidhi, Book of Judgments, Chapter (42), On Sharecropping, Hadith: 1385
Therefore, when it was said to Tawus, may Allah have mercy on him, “O Abu Abdur Rahman! It would have been better if you had abandoned this kind of sharecropping because people think that the Messenger of Allah, peace be upon him, forbade it!” he replied: “I help them and give to them.”
Reference: Ibn Majah, Book of Pledges, Chapter: Permission in sharecropping with one-third or one-fourth, Hadith: 2462; and it was also narrated by Bukhari in the Book of Agriculture, Chapter (10), Hadith: 2330
They were not merely concerned with earning a livelihood, indifferent to whether the laborers died of hunger; rather, they helped and gave to them. This was the true Muslim society.
Sometimes landowners preferred to leave the land uncultivated without farming it, but were not willing to give it to any cultivator for a small compensation. For this reason, Umar bin Abdul Aziz, may Allah have mercy on him, instructed the rulers to lease the land on the condition of one-fourth, one-third, or one-fifth of the produce and not to leave it uncultivated.