In chapter 5 of tractate Bava Metzia, Mishnah 5, we continue with matters of an iska (investment partnership). In the previous Mishnah we learned about a partnership in which one provides the animals and the other does the work, and it said there: "Ein shamin" - we do not appraise the value of the animals. Appraisal is a code word for the active partner, the one doing the work, bearing responsibility for any loss that may occur; and this is forbidden, unless he also receives payment for his work - the cost of the animals' food and a basic wage for his toil, for the reasons explained.
"Shamin parah vachamor" - an iska with adult animals:
Our Mishnah introduces that while this is the rule for young animals, such as the calves and foals in the previous Mishnah, with adult animals it is permitted: "Shamin parah vachamor" - one may appraise a cow and a donkey. A person setting up a farm, whose friend provides him with the animals - a herd of cows, donkeys, and the like - the provider may say: The cows are worth a hundred, take them and start a farm with them; when you sell them and receive a thousand, we will deduct the principal and divide the profit equally, while if they get lost - you must return the hundred to me. Such an agreement is permitted.
The reason for this: The problem that arose in the previous Mishnah - that the active partner works for free on behalf of the investor's share - does not exist here, since the cow or donkey performs work or yields milk. The adult animal plows, carries loads, or produces produce, and when the value of the benefit it provides exceeds the cost of its upkeep, the farm manager ends up making a pure profit from it. This benefit is itself his payment, and there is no need for the provider of the animal to add an additional payment (as explained in the Maggid Mishneh).
With this the Mishnah begins: "Shamin parah vachamor vechol davar shehu oseh veohel" - it is permitted to provide an adult animal to someone with whom one makes an iska, when he manages the farm and the investor only provides the capital. The rule holds true for any capital that does not only "eat" - meaning it costs money to maintain it - but also "does," producing a benefit: plowing fields, being rented out to others, and the like. Because it works and eats, and the value it provides exceeds the cost, it is permitted to divide the profits in half, without the provider of the capital being required to pay for food or wages.
Dividing the offspring:
When a farm is set up in which one provides the animals and the two split the profits half and half, the question arises as to the status of the offspring born: half of them belong to the raiser and half to the investor. The raiser is interested in transferring the investor's share into his possession as quickly as possible, since those offspring require work from him - to feed them, clean up after them, and care for them - and he does all this for the other party's share.
To this the Mishnah says that everything is determined by local custom: if no explicit agreement was made regarding whether the raiser is responsible for fully raising the offspring that pass to the investor's share, we follow the practice in that time and place. And this is its wording: "Makom shenahagu lachalok es havlados miyad - cholkin" - in a place where they are accustomed to divide the offspring immediately, they divide them. In a place where the custom is that the raiser hands over the offspring immediately, he is permitted to do so. This "immediately," the Gemara explains, is after thirty days for sheep and goats, and after fifty days for horses, cows, and donkeys, whose growth takes a longer time. Before that, the offspring depends on its mother and cannot survive on its own, and there is no possibility of handing it over to the owner; at the very least, he must bring it to a state of independence.
And the Mishnah continues: "Makom shenahagu legadel - yegadelu" - in a place where they are accustomed to raise them, they must raise them. If the custom in that place is that the raiser in an iska is obligated to also raise the half of the animals that passes to the investor, he must raise them fully.
Handing over mother and offspring together:
The previous Mishnah established that one who hands over small, young animals must pay for the food and care; and our Mishnah established that one who hands over adult animals is exempt from this. What, then, will be the law when both are handed over together - a cow and a calf with it? According to the plain meaning of our Mishnah thus far, there is no need to pay for the large one, but one must pay for the small one. Is it possible to include both of them together? After all, the calf nurses from its mother, and there is no food expense here at all; but there still remains other work, which the Gemara calls carrying the offspring on the raiser's shoulder - 'shoulder wage'. The question is whether the two can be combined and one can be exempt from payment.
Rabban Shimon ben Gamliel says: "Shamin egel im imo vesayach im imo" - one who hands over the mother and the offspring together may make an appraisal on both of them, and is not required to pay for the toil or the food. His reasoning: The offspring produces manure, and all the manure goes entirely to the raiser, and the investor has no share in it. The value of the manure offsets the work that the raiser invests in carrying the offspring, and it turns out that he receives payment even for the small animal, and therefore this is permitted.
However, the Tanna Kamma, and this is the halachah, holds that we do not say this: the benefit of the manure cannot be considered as payment, because the investor himself would have abandoned his share of it and would not have claimed his half of the animal's droppings. Since the manure is not his, he cannot give it, and it is not considered that he is paying the raiser, and therefore he must give him some other compensation. And this is the halachah: one who gives a mother and an offspring in an Iska agreement must pay the raiser at least for the work done with the young animal, but not for its food, since the mother that he provides takes care of that.
"Umafriz al sado":
The last part of the Mishnah is a completely new topic. A person who owns a field gives it to another to work it - a very common situation, similar to the feudal system: the nobles own the land, and the peasants work it. It was similar in the time of the Mishnah: wealthy people owned lands, and poor people lived on those lands and worked them. Several types of relationships are possible between the landowner and its workers: the worker can pay rent and be a renter; he can work the land in exchange for a percentage of the crop - and this is a sharecropper; or he leases the land - a lease.
In a lease arrangement, it works like this: the worker says to the owner of the field - give me a field to live on and work, and I will pay you a fixed lease payment every year, say ten kor of wheat. I will work the field to the best of my ability, and any crop that I produce beyond the ten kor will remain in my hands.
The question is what the law will be when the lessee comes to the owner of the field and says: the field will yield much more if an irrigation system is installed in it. Give me a thousand dollars, I will install the system, and the output will increase - and I commit to returning the thousand dollars to you within three years. Seemingly, this is a loan, since the principal is returned at the end of three years. And what if the owner of the field also raises the lease payments, arguing that the field has been improved and yields much more than before, and therefore he is not satisfied with ten kor but demands fifteen per year? Is this addition considered interest and forbidden - since he loaned a thousand and received the principal plus five kor per year - or is this not interest at all, but rather an investment by the owner in his own field?
The bottom line is that the owner is the one installing the irrigation system. He invests a thousand dollars and stipulates with the lessee: I am making your field more fruitful, and you are benefiting from it with an increased crop; whereas I am asking, first, for the thousand dollars back, and second, to raise the lease payment from ten kor to fifteen. This is not interest at all, but rather my investment in my own field, and an increased rent because the field is of better quality.
The Mishnah adopts the latter possibility, that this is permitted. This law is brought as an anonymous Mishnah, without noting the name of the Tanna, but according to the Yerushalmi and also according to the Tosefta, it is again Rabban Shimon ben Gamliel who says it: "Umafriz al sado ve'eino choshesh mishum ribis" - an owner working with a sharecropper is allowed to invest in his field and demand from the sharecropper the return of the principal he invested, and there is no interest in this, since there is no loan being returned here but rather an investment in his own field, and he is asking for a lease payment that includes within it the return of the expense plus payment for the fact that the field is better.
And this is the halachah. Whether there is an aspect of full-fledged interest here or not, the point is that no one disputes this law, and therefore it is ruled this way, in accordance with the wording of the Mishnah here.
In summary: In this Mishnah we have learned three matters. First, "Shamin parah vachamor vechol davar shehu oseh ve'ochel" - with a mature animal that produces a benefit exceeding the cost of its upkeep, an Iska evaluation is permitted, without additional payment. Second, the division of the offspring is determined by custom: "Makom shenahagu lachalok... makom shenahagu legadel", and the dispute between Rabban Shimon ben Gamliel and the Tanna Kamma regarding one who gives a mother and an offspring together, where the halachah is that the investor must pay for the offspring's work but not for its food. And third, "Umafriz al sado ve'eino choshesh mishum ribis" - the owner of the field may invest in his field, demand the principal of his investment and raise the lease payment, and there is no concern of interest in this.