The Economic Cost-benefit Analysis of Black Soldier Fly as an Alternative Animal and Fish Feed Ingredient in Malawi

Insect farming is a high-potential emerging farming enterprise in sub-Saharan Africa and their production has a relatively small ecological footprint. Black Soldier Fly (BSF), Hermetia illucens, is a promising insect species for a sustainable and innovative alternative protein source in animal feed. Little or no evidence exists showing whether BSF is a viable alternative sustainable feed ingredient in aquaculture and animal feed in Malawi or an economically feasible option for farmers. The objective of the study is to evaluate the financial feasibility of BSF farming at various scales of production using Cost-Benefit Analysis (CBA) with data collected from a small-scale pilot BSF farm in Lilongwe. The study addressed the following research questions: (a) What are the costs and benefits of farming BSF in Malawi for (i) small-scale farming (individual farmers, clubs, and cooperatives), and (ii) large-scale commercial farmers? (b) What drives variation in the benefit/cost ratio (BCR) of BSF farming across scales? (c) How could policies improve BCRs of BSF farming to support adoption in Malawi? The indicators used to assess the economic viability of BSF farming for smallholder and commercial farmers in this study included Net Present Value (NPV) and Benefit Cost Ratio. Results imply BSF farming is viable and feasible across scales of production. Small-scale farmers will generate roughly MK507,100 (US$ of gross revenue for one larval cycle and MK2,535,500 (over $2,500) annually. Commercial farmers can generate MK1,536,100 for one larval cycle and MK7,680,750 annually. Sensitivity analysis shows BSF farming remains profitable even within a 10% variation in the cost of production, the price of outputs, and the yield of BSF larvae and frass.