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B. TECHNICAL REPORT

I. Rationale

Financial Literacy has become essential for farmers to manage their
production efficiently and to access productive credit. In developing countries,
most smallholder farmers are operating below their potential capacity. Asian
Development Bank (ADB) (2009) in the Philippines reported that the poverty rate
remains high because they earn a small income from their farm.

Countless farmers still experience financial hardship partly because they
lack financial education. Similar situation can be found in the adopt-a-barangay
project community of the Isabela State University. Initial assessment shows that
majority had basic education only as their foundation. They are unconscious of
financial matters such as cost and profit analysis, increasing income by proper
selection of crops, and applying optimum conditions that end up with successful
marketing.

They are skilled in crop production, but they cannot grow their business
because they do not know much about the financial side of farming. They lack
knowledge on how to budget or differentiate between disposable income and
what should be plowed back to production. Because of this, they are always in
need of fresh funds and become victims of predatory lending.

Through its various agencies responsible for ensuring better living for
farmers, the government has crafted financial literacy programs for farmers and
fisherfolks to provide efficient budgetary management for the industry. This is
evidence of the government's commitment to teaching farmers what they need in
financial management. The Isabela State University being a leading partner in
delivering programs for growth and development in the community, would like to
take part in fulfilling the race.

The university's FLT program aims to address such needs through the
Capacity Development Workshop on Financial Literacy and the provision of an
alternative venue for farmers to access financial assistance.