In the last Mishnah, we said that if a rancher, a herdsman, somebody who deals with animals, takes young animals and cares for them while sharing profits and losses, the deal is structured automatically as an equity share held by both the investor and the logistics man. In this case, the herdsman and the investor both have 50% equity, even though the investor put up 100% of the capital. We said that the investor is putting up 100% of the capital, with 50% as an investment and 50% as a loan to the herdsman. So he also has liability if the deal doesn’t work, if the investment goes south. If, in that type of scenario, the herdsman himself is caring for the animal entirely, the investor is obligated to pay him for half of the work and half of the food for the animal. He basically has to give him a salary that covers 50% of the care. Since they own it equally, they also have to share equally in the expenses of caring for it. Otherwise, if the investor doesn’t give him money to take care of the animal, it could be considered ribit, as interest. But here the Mishnah qualifies the situation and says that if we’re talking about a fully grown animal, the same does not apply because of certain variables that we’ll discuss in this Mishnah.
The Mishnah says: You look at a grown cow, a grown donkey, or another animal. Since it’s grown, it works for itself, and its work covers the expenses of its food and the rest of its care. Even in a situation where the herdsman and the investor each receive half the profits and bear half the losses, the herdsman can use these animals for work. That work compensates for the animal’s care, so there’s no need for the investor to pay the herdsman a salary for caring for the animal and providing its food. The profits from the animal’s work will cover those expenses. The herdsman takes those profits, and they go directly toward the animal, so there’s no need for the investor to contribute money as well.
The offspring of an animal are considered profit for both the herdsman and the investor. They each take half the value of the offspring. Here we’ll discuss when the herdsman can take his share of the offspring and distribute the investor’s share to him. The herdsman wants to divide them up as quickly as possible. He’s always going to take care of his own animals, including their offspring, but he’d rather not have to worry about or take care of the investor’s animals. So he’d like to distribute them to the investor so he doesn’t have to raise them.
So we say: Makom she-nahagu lachlok et havladot miyad, cholkin. If there’s a custom in a certain locale that the herdsman here would divide up the offspring immediately, “immediately” means when there’s no longer a need for the expert care of a herdsman. If that was the custom, they would distribute the animals at that point. But in a place where the custom was for the herdsman to raise the young animals until they were grown, they would leave the animals with their herdsman until then. Only when they were grown would the herdsman be allowed to give the investor his share of the offspring. In the meantime, he would have to take care of them. He has to follow the local custom. As we said earlier, when somebody wants to give a herdsman young animals to raise in exchange for sharing the profits and losses, he has to pay the herdsman a salary for his work and for half of the food.
Here we’ll discuss an opinion of Rabban Shimon ben Gamliel, who limits this requirement. Rabban Shimon ben Gamliel omer (says): You assess the value of a baby calf with its mother, or a baby horse with its mother, and give them to a herdsman to raise. You split the profits and losses, and there’s no need to pay him an extra salary for the work, care, and food. These expenses are automatically covered by the value of the mother’s work and the child’s manure. In this situation, you’re adding the mother to the mix. Since the mother is also being given over, she works and produces. So there’s no need to pay the herdsman an extra salary. The mother of the baby animal that was handed over can work, and the baby will follow its mother and feed from her. It will nurse from its mother, and the baby will produce manure. All of that is revenue, and that revenue covers the basic cost of caring for the baby animal. In that scenario, there would be no need for the investor to pay the herdsman a salary.
We’ll mention one other leniency when it comes to the laws of ribit, of interest. A person is allowed to increase the rent he charges for his field in exchange for giving a loan to the person renting the field, so that person can improve the quality of the land. He doesn’t have to be concerned that the extra rent will be considered a rebate, because he’s only charging more because he’s giving the renter a loan that will increase the value of the land and make it yield more. So he’s allowed to do it.
For example, let’s say I have a person who’s renting a field for 2,000 pounds of wheat for the year. Then he borrows $200,000 from the owner to put work into the field because he knows the field will yield more once he puts work into it. So he agrees to pay back the $200,000. He also agrees that he won’t pay the 2,000 pounds of wheat as rent anymore, but will increase it to 2,500 pounds of wheat a year. He’s willing to pay higher rent in this scenario because he knows he’s going to produce a lot more with the investment he put into his field.
What we’re saying here is that Rashbag would allow this because he views the $200,000 borrowed from the owner as a way to improve the field. It’s not considered a loan to the renter, but an investment in the field. Once the field is more valuable because of this investment, the extra rent—the $500 more in rent—is because the renter has gone from paying $2,000 a year to 2,000 pounds of wheat to 2,500 pounds of wheat every single year. He went up. That’s considered payment for better-quality land, land that has already been invested in. So Rashbag allows this case.