Nepal’s agricultural growth has been very slow, primarily due to inadequate research and extension linkage, coordination among public and private partners, as well as to technology generation, transfer, and services to farmers. Constitution of Nepal, 2015 explicitly mentioned that agriculture research would be the primary responsibility of the federal and provincial governments, while extension would be the responsibility of provincial and local governments. As per Schedule 8 of the Constitution, local governments are authorized to provide effective public services to the local communities and carry out social and economic development activities to uplift the living standards of local people. However, the working mechanism of the existing agricultural extension system in Nepal seems to be inadequate in dissemination of improved agricultural technology among the farmers. The new varieties, breeds and production technologies have not reached the targeted clients; yield gaps are still high between research and farmers’ fields. This situation calls for a more proactive mechanism for institutional innovation targeting communication and cooperation in effective technology generation and transfer for the transformation of agriculture. There is a need for a participatory approach to agricultural extension where the innovations of improved technologies such as promising varieties derived from agricultural research could be well disseminated among the farmers. This collaboration will bridge the gap of inadequate skilled and trained manpower, technical knowledge and technologies as the present local government units have several challenges from skillful technicians to disciplinary experts hindering the effective implementation of agricultural programs and projects.