B. Project Components 15. The following four interrelated components of the ongoing project will be maintained: (A)Climate and Nutrition Smart Agricultural Technology Adaptation and Dissemination, (B) Income Generation and Diversification, (C) Improving Nutrition Security, and (D) Project Management, communication, and monitoring and evaluation (M&E). Component A: Climate and Nutrition Smart Agricultural Technology Adaptation and Dissemination (US$7.8 million) 16. This component will focus on promotion of best practices and technologies such as climate resilient,crop varieties and livestock breeds, climate-smart technology, and husbandry practices in the 16 new RMs. The interventions under Component A will be delivered through producer groups (PGs) formed under Component B. Subcomponent A1: Technology Adaptation and Testing 17. Through this subcomponent, the proposed project will support the implementation of 25 improved climate- and nutrition-sensitive technologies and associated practices identified collaboratively with the Nepal Agricultural Research Council (NARC) in the project municipalities by FANSEP. Additionally, ready-to-roll out technologies and cultivars developed by NARC for the agroecological conditions similar to the project target areas, or the Consultative Group on International Agricultural Research, may be considered with priorities to technologies that enhance climate-resilient production systems and livelihoods. Key activities to be supported under this subcomponent will include: (a) on-farm demonstration of CSA technologies and practices; (b) provision of improved seeds and breeds that were validated in the local context in FANSEP; and (c) trainings relevant to such demonstrations and distributions. Subcomponent A2: Technology Dissemination and Farmers’ Skill Development 18. This component will implement activities that enable farmers to master the management skills (improved agriculture practices) to achieve climate resilience and mitigation. The activities will be implemented throughout the project area covering all 16 RMs. Key activities under this subcomponent will include: (a) conducting of 485 crop and livestock FFSs; (b) establishment of 16 artificial insemination (AI) units; (c) establishment of 8 goat multiplier herds; (d) establishment of 16 community-level fodder nurseries supporting plantations covering 320 ha; (e) promotion of community seed programs resource for improved seed replacement rate through establishment of 16 community-based seed production groups; (f) 325 crop promotion programs; and (g) 300 goat promotion programs, 120 dairy promotion programs, and 60 rural poultry promotion programs. Further, through this subcomponent, the project will support 400 small-scale irrigation schemes covering 1,200 ha,8 including conservation of intake sites (spring sheds) to capture and store runoff water and arrest soil erosion in project RMs, and provide mechanization support to 300 PGs across the project area, with prioritized access for women producers. Component B: Income Generation and Diversification (US$5.4 million) 19. This component will support selected PGs in diversifying their income generation capacity through critical business skills, productive assets and value-added activities, and market linkages. Subcomponent B1: Strengthening Producer Groups (PG) 20. The subcomponent will form and mobilize 1,350 new PGs (725 crop and 625 livestock) and build their capacity and entrepreneurial skills. These groups will receive trainings in group dynamics,leadership, decision-making, problem solving, risk management, preparation of business plans,bookkeeping, crop planning, and simple operation and maintenance of farm equipment. Given the successful pilot in FANSEP, 32 new FBSs will be conducted. Subcomponent B2: Building Market Linkages through Productive Alliances9 21. This subcomponent will consolidate links between producer organizations and buyers including micro, small, and medium enterprises; traders; and rural financial institutions (where feasible) through Productive Alliances by financing business plans to meet the goals of the agreement with buyers. The activities financed under this subcomponent are: (a) around 720 matching grant10 schemes for targeted beneficiaries to finance the business plans developed under Subcomponent B1; and (b) formation of 16 multi-stakeholders’ dialogue platforms at the RM level. The matching grant schemes will be provided and implemented following the grant operating guidelines formulated under FANSEP. The eligibility criteria will include a financially and technically sound business plan including proposed activities; operational, environmental, and social risks and mitigation measures; potential to enhance beneficiaries’ climate resilience and adaptation; and potential to achieve climate change mitigation (for example, introducing energy-efficient facilities). The dialogue platforms are expected to provide opportunities for the buyers, producers, and service providers to meet, interact, and explore business opportunities. In addition, around 32 critical infrastructures to support the strengthening of the Productive Alliances in the project 8 Most irrigation schemes supported cover less than 1 ha of land. 9 A Productive Alliance is defined as an agreement between a group of organized farmers and a buyer, for the provision of a certain good, in a specified quantity and quality. 10 Up to 15 percent contribution from the PGs, mostly in kind. RMs such as collection centers, storage, markets, and processing and grading facilities will be established to strengthen the supply chain and reduce postharvest losses. The designs of these infrastructure will be based on climate-resilient approaches ensuring they do not generate negative externalities or generate potential adverse effects on the environment and public health.