Analysis of the Behavior and Transaction Practices of Oil Palm Traders from the Perspective of Islamic Business Ethics (A Case Study of Matagual Village, Batin XXIV District, Batang Hari Regency)

Abstract

Oil palm trading in Matagual Village involves dependence between farmers and intermediaries (toke), creating imbalances in price information, weighing practices, and payment arrangements. This study examined intermediaries’ trading behaviour and transaction practices, assessed their conformity with Islamic business ethics, and identified factors influencing these practices. A qualitative approach involving ten participants was adopted. Data were collected through observation, interviews, and documentation and analysed against the ethical principles of honesty, justice, transparency, responsibility, and benevolence. The findings indicate that purchase prices reflect mill prices, operating costs, and profit margins, while weighing deductions are linked to fruit quality. However, explanations of price calculations and deductions are inconsistent, and payments are occasionally delayed while intermediaries await funds from mills. Transactions are also influenced by farmers’ financial needs, market conditions, fruit quality, transportation costs, and social relationships. The study concludes that Islamic business ethics are partially implemented, with shortcomings in transparency and payment timeliness. These findings highlight the importance of transparent pricing, verifiable weighing, and mutually agreed payment schedules for strengthening fairness and trust in farmer–intermediary transactions.