Gemara

Beraisa: One may not give Demei (money paid for) Peros Shemitah more than the value of three meals to an Am ha'Aretz (who is suspected of transgressing Shemitah);

If one gave more than this, he should say 'the money is redeemed on food in my house' (and specify food worth that amount), and he eats that food with Kedushas Shemitah.

40b - R. Elazar: Chilul of Shemitah produce (Hatfasah, forbidding what it is exchanged for) takes place through a sale, but not through redemption (Hatfasah without transferring ownership).

R. Yochanan: Chilul takes place through a sale or redemption.

R. Elazar learns from the Semichus of "Bi'Shnas ha'Yovel ha'Zos" to "V'Chi Simkero Mimkar..." that Chilul is only through a sale;

R. Yochanan learns from "Ki Yovel Hi Kodesh" that Shemitah is like Hekdesh, i.e. Chilul can be through a sale or through redemption. He expoundd Semichus like R. Yosi b'Rebbi Chanina does.

Beraisa - R. Yosi b'Rebbi Chanina: Light transgressions of Shemitah are punished very heavily! One who does business with Shemitah produce will have to sell his Metaltelim. It says "Bi'Shnas ha'Yovel ha'Zos", and "V'Chi Simkero Mimkar..." The latter verse refers to Metaltelim, which are sold from hand to hand.

R. Elazar uses the Hekesh of R. Yochanan to teach that Shemitah is Tofes Damav (it forbids what is exchanged for it), like Hekdesh.

Support (for R. Elazar - Beraisa #1): Shemitah produce is Tofes Damav. We learn from "Yovel Hi Kodesh Tihyeh Lachem" - just like Hekdesh is Tofes Damav, also Shemitah produce.

Suggestion: Just like Kodesh is Tofes Damav and it itself becomes permitted, also Shemitah produce!

Rejection: "Tihyeh" - the Shemitah produce remains (forbidden).

If one bought meat with Shemitah produce, both require Bi'ur (when the time of Bi'ur comes, both must be eradicated);

If he then bought fish with the meat, the fish gets Kedushas Shemitah in place of the meat;

If he then bought wine with the fish, the wine is in place of the fish;

The rule is - the last thing bought has Kedushas Shemitah, and also the original produce.

Inference: The Beraisa discusses buying things with Shemitah produce. This connotes that Chilul takes place through a sale, but not through redemption.

Support (for R. Yochanan - Beraisa #2 - R. Meir): Both Shemitah and Ma'aser Sheni can be Mischalel on a live or slaughtered Behemah, Chayah or bird;

Chachamim say, it can be Mischalel on a slaughtered animal or bird, but not on a live one. This is a decree, lest one raise herds of such animals.

41a - Rav Ashi: R. Elazar and R. Yochanan argue about the first (original) Shemitah produce, but all agree that the second produce (what was exchanged for Shemitah produce) can be Mischalel through a sale or redemption.

Beraisa #1 is like R. Elazar. Since it needed to teach that the first Chilul was through a sale, it taught about all the Chilulim through sales.

Question (Ravina - Beraisa #3): If one has Demei Shemitah and needs to buy a garment, he goes to a grocer who knows him and buys food. He gives the food to the grocer as a gift, and the grocer gives him the money as a gift. He can then buy what he wants.

Demei Shemitah is second produce, and it is Mischalel only through a sale!

Correction (Rav Ashi): Rather, they argue about the second produce, but all agree that the first produce can be Mischalel only through a sale.

Question: Beraisa #2 says that Shemitah (i.e. first produce) and Ma'aser Sheni can be Mischalel... !

Answer: It refers to Demei Peros Shemitah (which is like second produce).

Support: Shemitah is taught with Ma'aser (Sheni), and surely Ma'aser refers to Demei Ma'aser, for it says ",,,V'Tzarta ha'Kesef b'Yadecha" (Peros Ma'aser may be redeemed only on coins). Similarly, Shemitah refers to Demei Peros Shemitah.

Rishonim

Rambam (Hilchos Shemitah 6:8): Chilul of Shemitah produce takes place only through a sale. This refers to the original Shemitah produce, but the second produce is Mischalel through a sale or redemption.

Ri Korkus: The Halachah follows R. Yochanan against R. Elazar.

Radvaz: The Yerushalmi supports R. Yochanan from a Beraisa that permits Chilul of Demei Shemitah on a dough. This connotes that R. Yochanan permits Chilul only regarding Demei Shemitah, but not regarding Peros Shemitah themselves.

Question: Yefei Einayim (40b DH Tanya): The Yerushalmi holds that they argue about second produce, therefore it supports R. Yochanan from that Beraisa. The Bavli concludes that they argue about second produce. Why didn't the Bavli bring this Beraisa?

Ramban (Avodah Zarah 62a DH Nimtza): One may buy something edible with Demei Shemitah, for the Kedushah transfers to it. Nevertheless, one may not sell Derech Sechorah, i.e. by weight.

Ritva (41a DH Ela): Beraisa #3 teaches that second produce is Mischalel only through a sale. This is like R. Elazar.

Question (Aruch l'Ner 41a DH Ela): Since two Beraisos support R. Elazar, the Halachah should follow him against R. Yochanan, who is supported by only one Beraisa!

Answer (Aruch l'Ner, ibid.): In the conclusion, Beraisa #1 does not support R. Elazar. Since it needed to teach that the first Chilul was through a sale (all agree to this), it taught about all the Chilulim through sales.

Note: The Gemara (Yevamos 101b) says that there is no reason to favor two or three Stam Mishnayos over one. The Aruch l'Ner and Yefei Einayim (ibid.) hold that two Stam Beraisos are better than one. Perhaps we would say that the one is Meshubeshta.

Ritva (39b DH v'Im): We did not bring the first Beraisa (39a, if one gave too much Demei Shemitah to an Am ha'Aretz he redeems it on food in his house) to support R. Yochanan, for perhaps there is no Chilul, and it is a mere fine.

Tosfos (39a DH Ma'os): According to the opinion that one cannot redeem what is not in his Reshus (Bava Kama 68b), we must say that it is a fine.

Acharonim

Questions (Kapos Temarim 40b DH v'Im): According to the conclusion that they argue about the second produce, what is R. Elazar's source? Perhaps the verse teaches only about the first produce! And what is his source for R. Yosi b'Rebbi Chanina's teaching about the results of selling Shemitah produce?

Answer #1 (Kapos Temarim, ibid.): It says "V'Chi Simkero Mimkar". The repetition teaches about also the second produce. R. Elazar holds that we may learn more than one law from Semichus, but R. Yochanan says that we may learn only one, like R. Yehudah. (Chachamim expound Semichus to forbid a Ba'al Keri to learn Torah; R. Yehudah learns something else from the Semichus.)

Rebuttal (Aruch l'Ner 40b DH Af): The Rambam rules like R. Yochanan, even though he rules unlike R. Yehudah regarding Ba'al Keri. Also, if R. Yochanan holds Yesh Semichus l'Mechtzah (we learn only one law from a Semichus), all the more so he should hold Yesh Hekesh l'Mechtzah (and the Hekesh to Kodesh would teach only that Shemitah is Tofes Damav)!

Answer #2 Aruch l'Ner (ibid.): R. Yochanan and R. Elazar expound identically. The Semichus teaches that Chilul is only through a sale, but this applies only to the first produce. The Hekesh teaches that redemption works for second produce. R. Elazar decrees that redemption does not work for second produce, lest people say that it works for first produce.

Note: Such a decree is necessary for people who do not know the Halachah. One who knows that the first produce remains forbidden has no incentive to be Mechalel!

Chazon Ish (Shevi'is 10:13): Rav Ashi suggested that Chilul takes effect on the first produce, even though it remains Kodesh. Surely this was not his intent! We must say that it is like Temurah. The conclusion is that Chilul does not take effect on the first produce. This is even if Reuven says 'My produce should be Mechulal on Shimon's money, and though this Shimon will acquire them and I will acquire the money.' This is because it is impossible for the first produce to lose its Kedushah. Even regarding the second produce, which is Mischalel through a sale or redemption, a sale works only if there was intent for Chilul. If he wanted the food to retain its Kedushah, it does. It is unreasonable to say that there is Chilul against his will; we never find this regarding Hekdesh. Nor do we find that second produce forbids Damav and retains its Kedushah. If one wants to Mechalel through a sale, no Kinyan is needed. Once both parties agree, it takes effect (like Hekdesh, which takes effect through speech).

Therefore, a Chaver may buy second produce from an Am ha'Aretz (suspected of transgressing Shemitah). The Chaver intends that the produce keep its Kedushah, therefore he does not give Demei Shemitah to the Am ha'Aretz.

Retraction: However, the Yerushalmi refutes this. It says 'we cannot learn to permit selling Ma'aser Sheni from Shemitah, because regarding Shemitah selling it is its Chilul.' Surely, 'its Chilul' refers to here Hatfasah, for the produce remains forbidden. If it is possible to sell second produce without Chilul, we should learn from second produce to Ma'aser! Rather, we must say that even second produce is always Tofes Damav. However, if he does not want the produce to become permitted, perhaps it does not against his will.