Talmudic References
According to the Talmud, observance of the Sabbatical year is of high accord, and one who does not do so may not be allowed to be a witness in an Orthodox religious court. Nonetheless, Rabbinic Judaism has developed Halakhic (religious-law) devices to be able to maintain a modern agricultural and commercial system while giving heed to the Biblical injunctions. Such devices represent examples of flexibility within the Halakhic system
Hillel the Elder, in the first century BCE, used the rule that remittance of debts applies only to debts between Jews, to develop a device known as Prosbul in which the debt is transferred to a Beit Din (religious court). When owed to the court rather than to an individual, the debt survives the Sabbatical year. This device, formulated early in the era of Rabbinic Judaism when the Temple in Jerusalem was still standing, became a prototype of how Judaism was later to adapt to the destruction of the Second Temple and maintain a system based on Biblical law under very different conditions.
The rabbis of the Jerusalem Talmud created rules to impose order on the harvesting process including a rule limiting harvester on others' land to taking only enough to feed themselves and their families. They also devised a system, called otzar beit din, under which a rabbinical court supervised a communal harvesting process by hiring workers who harvested the fields, stored it in communal storage facilities, and distributed it to the community.
There exists a major difference of opinion between two Acharonim, the Beit Yosef and the Mabit, as to whether produce grown on land in Israel which is owned by non-Jews also has sanctity. According to the Beit Yosef, such produce has no sanctity and may be used and/or discarded in the same way as any produce grown outside of Israel. According to the Mabit, the fact that this produce was grown in Israel, even by non-Jews, gives it sanctity, and it must be treated in the special ways detailed above.
The Chazon Ish, a noted Hareidi halachic authority who issued key rulings on Jewish agricultural law (mitzvos tlu'os ba'aretz)in the 1930s and 1940s, ruled like the Mabit, holding that produce grown on land in Israel owned by non-Jews has sanctity. The Chazon Ish's ruling was adopted first by the religious families of Bnei Brak and is popularly called Minhag Chazon Ish (the custom of the Chazon Ish).
The rabbis of Jerusalem, on the other hand, embraced the opinion of the Beit Yosef that produce farmed on land owned by non-Jews has no sanctity. This opinion is now called Minhag Yerushalayim (the custom of Jerusalem), and was adopted by many Haredi families, by British Mandate Palestine, and by the Chief Rabbinate of Israel.
These respective opinions are reflected in the way the various kashrut certifying organizations publicize their Shmita and non-Shmita produce. The Edah HaChareidis, which follows Minhag Yerushalayim, buys produce from non-Jewish farms in Israel and sells it as "non-Shmita produce." The Shearit Yisrael certifying organization, which subscribes to Minhag Chazon Ish, also buys from non-Jewish farmers in Israel, but labels the produce as such so that customers who keep Minhag Chazon Ish will treat these fruits and vegetables with appropriate sanctity.
Read more about this topic: Shmita