Consumer perceptions and economic viability of black soldier fly larvae production in Kampala, Mukono, and Wakiso Districts

Abstract

The high costs of conventional protein feeds and commercial fertilizers constrain agricultural production in Uganda. Black Soldier Fly Larvae (BSFL) technology offers a sustainable solution by converting waste into high-protein feed and organic fertilizer. Yet, adoption remains limited due to limited evidence on consumer perceptions, profitability, and welfare effects under local conditions. The main objective of this study was to assess the market characteristics, financial viability, and total economic benefits of BSFL production in Kampala, Mukono and Wakiso districts. This study, conducted in the districts of Kampala, Wakiso, and Mukono, employed a cross-sectional study design and collected quantitative data from a total of 422 respondents, including crop and livestock farmers, BSFL farmers, and BSFL firms. Respondents showed positive perceptions and moderate familiarity with BSFL products, expressing a preference for processed forms like dried larvae and liquid frass because of their ease of use and longer shelf life. The study used an open-ended contingent valuation approach to determine Willingness to Pay for BSFL products and found that respondents were willing to pay market-equivalent or higher prices for BSFL products. The NPV, BCR, and Payback period were used to determine the long-term benefits of BSFL production across different production scales and different discount rates. The small-scale production systems (<200kg/week) demonstrated the highest production efficiency, converting 93% of their weekly capacity into actual production, had the shortest payback period (1 year), a positive Net Present Value, and a high Benefit-Cost Ratio across different discount rates. Using gross margin analysis and producer surplus, the welfare effects of BSFL production were determined. The welfare effects increase substantially for smallholder out- grower farmers, UGX 14.9 million at 50% decentralization and UGX 29.9 million underscoring the profitability and resilience at the household level. Losses incurred by large- scale firms under decentralized models, UGX -2.5 million at 50% decentralization and UGX -3.5 million at 100% (full) decentralization offset these smallholder farmer gains. The overall welfare effects of BSFL production remained generally positive, UGX 12.5 million at 50% decentralization and UGX 26.4 million at 100% (full) decentralization. This study recommends that targeted awareness and clear policy guidance are critical to facilitate perceptions, sustain BSFL production, adoption, and scale-out in Uganda.