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Economic Theory Of Collateral Securite Generale

Feature Article Economic Theory Of Collateral Securite Generale
DEC 30, 2013 LISTEN

1. Background

Farmers makes up of 80% of the production sector of the economy in Africa, especially, Ghana. But their meager income and poor economic conditions impede their efforts to increase their production capacity to an appreciable extent. It is therefore imperative that some measures be taken in order to augment them raise their income which will intend boost their economic situation and, consequently, leads to higher productivity. This is the background in which the theory of collateral securite generale is propounded to encourage and advise African governments to aid boost production in the agricultural sector of their economy.

2. Purpose

The aim of this study is to discover appropriate manner whereby farmers in the low and middle income countries could be major players in the economic activities in the country. It purports to state that, given appropriate measures, a greater proportion of farmers in the Third World Countries, could be moved from the lower class level to middle class level. The latter, which is the ideal indicator of political and economic success, leads to stability in the economic domain.

3. Postulate

If by way of economic support and appropriate incentives farmers (from low and middle income countries) are encouraged to enjoy leisure, it will boost production capacity as well as raise the self-esteem of most farmers in the developing countries.

4. Method

1. Collateral Securite Generale: By collateral securite generale, we mean the economic method or measure whereby farmers, particularly, with low income are made to enjoy leisure and economic security in relation to their vital profession in the low and middle income countries.

The procedure implies the process whereby governments of developing countries deposit 10% of yearly/annual revenue from produce, such as cocoa or coffee, etc to a reputable bank or fund in order to yield interest continuously.

These funds are utilized as collateral security which enables cocoa farmers and other recognized people in the farming industries to be issued a certificate of guarantee that will enable them to borrow money without providing formal collateral security. The loans which are given to farmers are to be used for:

1. Private Cars (but not commercial vehicles)
2. Building house| Estate ownership
3. Make extension in the farming industries or selling cocoa produce

4. Purchase farming equipments
5. Educate a university Graduate
6. Travel expenses for vacations

2. Payment

Normal procedures in the payment of loans in the banks are followed. Inability to fulfill payment could lead to the sale of farming properties but not housing which is owned by a prospective farmer. Where none of those exist by way of mystery or total bankruptcy or loss, the loan of a deceased person or seriously-ill person could covered and paid from the account of collateral securite generale. Banks could file application through their lawyers to the secretariat which will make payment with no string attached to the various banks where customers took their loans.

5. Results and analysis

Advantages:
a) Farmers with low income could enjoy leisure
b) Life security and well-being of farmers
c) Players in the economic activities in the country

d) Facilitate efficient money circulation
e) Bring prospective farmers to the middle class level

f) Boost the farming industries image
g) Bring Third World farmers to the centre of modern economic history

h) Distribute wealth to the level of equilibrium
i) Boost mental health of farmers in the low and middle income countries.

6. Conclusions
Theory of collateral securite generale should be capable of moving many famers in the low and middle income countries into the middle class level. It should be able to aid boost production in those countries where agriculture is the backbone of the economy. The theory should ease the problem that concerns money circulation; which will intend strengthen the purchasing power of most farmers in the major sector of the Third World. It should, consequently, encourage prospective farmers to enter into the manufacturing sector of the economy.

7. References
Arrow, Kenneth J. (1951, 2nd ed., 1963). Social Choice and Individual Values, Yale University Press, New Haven.

Arrow, Kenneth J., and Gérard Debreu ed., 2002. Landmark Papers in General Equilibrium Theory, Social Choice and Welfare. Edward Elgar Publishing, ISBN 978-1-84064-569-9.

Atkinson,Anthony B. (1975). The Economics of Inequality, Oxford University Press, London.

Bator, Francis M. (1957). "The Simple Analytics of Welfare Maximization," American Economic Review, 47(1), pp. 22-59.

Calsamiglia, Xavier, and Alan Kirman (1993). "A Unique Informationally Efficient and Decentralized Mechanism with Fair Outcomes," Econometrica, 61(5), p p. 1147-1172.

Chipman, John S., and James C. Moore (1978). "The New Welfare Economics 1939-1974," International Economic Review, 19(3), pp. 547-584.

Mishan, E. J. (1980). "The New Welfare Economics: An Alternative View," International Economic Review, 21(3), pp. 691-705.

Feldman, Allan M. (1987). "equity," The New Palgrave: A Dictionary of Economics, v. 2, pp. 183–84.

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