Afroz, Rafia and Thaker, Mohamed Asmy Bin Mohd and Akbar, Mohamed Aslam and Rashedul, Islam Mohammad
(2026)
Waqf as a transformative mechanism in Malaysia’s rice sector: from salam financing to retail integration.
International Journal of Advanced Research in Economics and Finance, 8 (1).
pp. 245-269.
E-ISSN 2682-812X
Abstract
The rice industry in Malaysia is dealing with a confluence of climatic, financial, and structural stressors that jeopardise long-term food security, skew retail pricing, and impair farmer livelihoods. Self-sufficiency levels are dropping, domestic production is stagnating, and smallholders remain dependent on lengthy, opaque supply chains controlled by middlemen despite substantial subsidies and policy reforms. At the same time, vulnerability has increased in key granary areas such as the Muda Agricultural Development Authority (MADA), Kemubu Agricultural Development Authority (KADA), and selected Integrated Agriculture Development Areas (IADAs) due to flood-related disruptions, increased input costs, and post-harvest inefficiencies. In this study, we suggest waqf as a transformative mechanism in Malaysia’s rice sector to incorporate Islamic social finance within a circular, climate-resilient agricultural system, thereby reconfiguring Malaysia's rice value chain from pre-harvest funding to retail integration. The study formulates an integrated waqf model for the rice sector by utilising literature, policy documents, comparative case studies (such as Wasil salam in Pakistan and green sukuk in Malaysia), and recent initiatives in Malaysia (including GROWMatch, MyCIF, Agrobank, and social-impact sukuk). As a conceptual paper, it synthesises these strands into a coherent, policy-relevant framework rather than providing econometric estimation or field-based impact evaluation. Within the proposed model, waqf is positioned as a value-chain anchor that: (i) provides clustered smallholders with salam-based pre-season financing and asset support; (ii) deploys green sukuk and crowdfunded capital into sustainable infrastructure and waste-to-resource projects; (iii) applies circular-economy principles to convert by-products into biofertiliser, feed, and energy; and (iv) establishes structured waqf–retailer partnerships to stabilise prices and improve access for low-income consumers. The suggested approach fills funding gaps, lowers farmer vulnerability to middlemen, boosts climate resilience, and opens new avenues for ethical investment by aligning Sharīʿah-compliant risk-sharing with food-security objectives. We conclude that, with appropriate governance, legal backing, and impact assessment, waqf can evolve from a supplementary philanthropic tool into a central pillar of a fair, robust, and sustainable rice ecosystem in Malaysia
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