In a move to expand its presence in Middle Eastern and Asian markets, Massachusetts-based agtech company, FreshBox Farms, has appointed Shariyah Review Bureau (SRB) to structure and oversee the company’s Sharia compliance as it offers customers Islamic leasing investment options. This Sharia compliant project is the first of its kind, and will enable Islamic investors to lease FreshBox’s hydroponic agricultural units under Islamic financial modalities.
FreshBox grows more than 30 varieties of greens and herbs using specially outfitted, environmentally managed and sustainable enclosed units that can vertically produce crops in any environment. The clean, compact, hydroponic system of production eliminates the need for pesticides and herbicides, and through the use of precision data, each 320 square foot (29 square meter) growing unit is able to produce the equivalent crop yield of 20 acres (eight hectares) using a fraction of the water and inputs of traditional agricultural production. Using data gathered on each single plant, each FreshBox unit is able to provide fresh greens for 1,500 families per month, using 68,000 liters of water compared to a conventional field which requires 174 million liters to grow the same volume of food, according to Sonia Lo, CEO of FreshBox Farms.
As opposed to other leasing structures, under a Sharia compliant lease, the liabilities related to the ownership of the leased asset are the responsibility of the lessor and not the lessee, Saif Shawqi, Assistant Business Developer, Shariyah Review Bureau told GAI News. In addition, if payments are delayed, extra interest may not be collected, and any extra funds that are collected must be donated to charity and cannot be considered income. The most significant difference in structure, however, is that the rental amount cannot be unilaterally increased. If an increase is called for, a new agreement must be signed between the two concerned parties with mutual consent.
“Islamic institutional investors have become increasingly savvy over the years and many of them find Agriculture a beneficial addition to their portfolio,” according to Ms. Lo. “Therefore, we believe FreshBox Farms is a good investment because it provides three types of Sharia compliant opportunities: 1) Agriculture; 2) Environmental conservation; 3) Technology. We believe it will be a hit among Islamic investors as it is truly value-adding and rewarding.”
The offering of Sharia compliant leases by FreshBox, and the company’s agreement with Shariyah Review Board to oversee compliance throughout every aspect of each investment, is part of the company’s plans for successful global expansion. Within the next five years, FreshBox is planning to build 20 farms in the U.S., with each farm being a separate fundraising vehicle of US$3 million, for a total target fundraising in the U.S. of US$60 million, according to Ms. Lo. Globally, within this time frame, the company is planning to launch a minimum of five farms (depending on market size) in at least 20 countries, translating to an additional fundraising of US$300 million.