Praise be to Allaah.
This action is haraam, because it is deceiving the Muslims,
and it was proven that the Prophet (peace and blessings of Allaah be
upon him) said: “Whoever deceives us is not one of us.” This action also
involves harming the Muslims, and whoever harms the Muslims, Allaah will
punish him. The one who does this is a sinner, and his earnings are haraam.
The one who does that deserves be punished because of the deceitful and
sinful actions that he has done. It is not permissible for the one who knows
that fruits and vegetables have been produced in this manner to market them,
distribute them or sell them, because that comes under the heading of
cooperating in sin and transgression, and Allaah says (interpretation of the
“Help you one another in Al‑Birr and At‑Taqwa (virtue,
righteousness and piety); but do not help one another in sin and
transgression. And fear Allaah. Verily, Allaah is Severe in punishment”
Farmers and other Muslims should fear Allaah and cooperate in righteousness and piety, and they should keep away from the means of sin and transgression; they should seek a halaal income and good provision, and avoid haraam earnings, and they should not deceived by the attractions of this world and accumulating wealth by any means, whether halaal or haraam. A little of halaal wealth is better than a great deal of haraam wealth. The Muslims should inform the authorities of those who are doing this so that they can put a stop to it, because this is a kind of evil action which must be denounced and stopped. And the Muslims should urge one another to do what is right, and they should enjoin what is good and forbid what is evil, and offer sincere advice to their brothers.
From Fataawa al-Lajnah al-Daa’imah, Majallat al-Buhooth al-Islamiyyah, 61/100.