Nepal’s Rs 160 billion poultry industry heavily relies on the import of maize and soybean meal to produce the feed required to sustain the industry.

According to the data of the Trade and Export Promotion Centre, the country imported maize worth nealy Rs 15 billion and soybean worth around Rs 6 billion in the last fiscal year, 2023/24.

“Of 700,000 tonnes of the required maize, we get only around 150,000 tonnes from Nepal,” said Rabin Puri, president of the Nepal Feed Industries Association. “And for the annual demand of 150,000 tonnes of soybean meal, we are completely dependent upon the supply from India, the US or Brazil.”

Poultry feed usually contains 50 percent maize and around 30 percent soybean meal. Some of its other ingredients include wheat, barley, broken rice and various vegetable oil cakes.

Though, according to Puri, the feed prices have not changed much in Nepal in the past year, they are likely to be expensive soon with the rise in the price of corn in India. 

Read: Rise in Prices of Raw Materials Increases Price of Poultry Feed 

Currently, a 50 kg bag of B-0 poultry feed costs Rs 4,100 in Nepal. The prices for the same quantity of B-1, B-2 and B-3 feeds are Rs 4,000, Rs 3,900 and Rs 3,850, respectively. 

The B-0 poultry feed is used for chicks for the first 12 days, B-1 for those between 12 to 28 days, B-2 for those between 28 and 42 days and B-3 for chicken more than 42 days old. The chicks require more protein in the earlier stage. 

Earlier this year in June, The Times of India reported that corn prices started to rise in India following the surge in its use for ethanol production.

A year ago, it used to cost us Rs 35 to import a kilogram of maize from India in the season, but it has surged to Rs 52 per kg, Puri said, adding that a 5 percent import duty is levied on it by the Government of Nepal. “Moreover, the government has imposed a 9 percent Agriculture Reform Fee on the import of soybean meal.”

Prior to this, customs duty on their import was 1.6 percent.

But the reliance on import and poultry feeds likely to be dearer are not the only concern. 

Read: Poultry Industry Loses Rs 35 billion in a Year

They rely on a resource-intensive farming system, according to Subash Shrestha, the Marketing Head at Agri Direct Global, a startup which might have cracked the code to address two issues–Nepal’s reliance on imports to produce poultry feeds, and greenhouse gas emission from unmanaged organic waste. 

“Soybean meal is the most essential ingredient for any feed,” said Shrestha. “But, it requires 2,000 litres of water for producing 1 kg of soybean, and 4 kg of carbon dioxide is emitted in the process.”

Shrestha shared this information while presenting the innovation by Agri Direct Global at the Climate Champion Competition last Wednesday.

The startup aims to make the feed production more sustainable, efficient and affordable by raising black soldier flies (Hermetia Illucens) as a feed alternative. 

“These insects are a natural source of protein, non-pest to humans and excellent bio waste recyclers,” said Shrestha.

The heart of the innovation is an automated box to raise the black soldier fly larvae. They are fed the organic waste, collected from the local community, inside the box for 10 to 15 days, then used as a protein source in place of soybean meals. 

Additionally, the frass obtained in the process can be used as a fertiliser.

Ajay Shahi, who has led the six-member team in this innovation, said the most difficult challenge to materialise this idea was to develop the box. “Except for the thermostat, we have used the materials available in the country to make the box,” said Shahi, adding that it can be used anywhere in Nepal.

Shahi, whose family has been involved in the poultry and hatchery business in Khokana, Lalitpur, told NBA that he was well aware about the black soldier fly before joining the Bachelor of Science in Agriculture at the College of Natural Resource Management in Sindhuli affiliated to the Chitwan-based Agriculture and Forestry University. 

“I have always been interested to know more about insects,” said Shahi. “I first learned about the black soldier fly through Youtube.”

Around four years ago, Shahi tried raising the black fly larvae. “But, the experiments failed,” he said. "I have witnessed the price of poultry feed surge from Rs 2,900 to Rs 4,100, and always believed the use of black soldier fly larvae would benefit the farmers."

But, when he had to study about the insect in the bachelors level, Shahi along with Subash, his classmate, thought about trying to materialise the idea one last time.
 
We brought the black soldier fly larvae from the National Innovation Centre and started working on our idea in Sindhuli. They succeeded. 

However, they failed to raise the larvae in Lalitpur, again. “We struggled to hack the temperature and humidity control,” Shahi said.

Around a year ago, Shahi and Shrestha met motivated youths at Agri Direct. Then, they finally succeeded in making their innovation applicable in any condition. 

“All we have achieved so far is through a single device,” Shahi adds. “So, we have a lot more potential.”

A black soldier fly lays around 450-500 eggs at a time, which takes around 4-5 days to hatch. The tiny larvae are fed the bio-waste. When they weigh 0.5 grams in 10 to 15 days, they are ready to be converted into feed. 

They can be kept in a controlled environment for 15 more days to make them lay eggs. “Currently, we use only 1 percent of the flies for producing eggs while the rest goes to feed,” Shahi added. 

While pitching their innovation to the panel of three judges last Wednesday, Shahi said that the black soldier fly feed was 33 percent cheaper than the soybean meal, helps chicken grow 25 percent faster while requiring 20 percent less in quantity than the commercial feed.

 
The data, according to Shahi, is based on the survey they have carried out across 40 local farmers and feed suppliers. The startup has been selling its feed to local poultry farms at Rs 60 per kg, while the price of the soybean meal in Nepal is around Rs 90 per kg.

We have been selling our product with a profit margin of Rs 8 per kg, Shahi told NBA. “With the benefits our product offers, there is space for us to increase its price."

Currently, Agri Direct Global produces 4-5 kg of black soldier fly larvae daily. Until last Wednesday, the startup has processed more than 20 tonnes of bio-waste, produced 1,200  kg of the black soldier fly larvae, and regularly supplied to local poultry farms, earning Rs 75,000.

The startup has so far invested more than Rs 160,000 in setting up infrastructure, technology, research and development, and product development.

However, these innovators are well aware of the challenges ahead. “There will definitely be more challenges in our expansion phase as we have been operating so far on a small scale,” they say. 

Though the locally available species of the black soldier fly can be cultivated for the purpose, the one that is being used currently is an imported species. “It can pose a challenge for us in the coming days,” Shahi told NBA.  

While their primary target is the poultry sector, they also aim to supply to feed manufacturers, household and commercial poultry, fish and pig farms as well as the pet feed industry in the coming days.

Our black soldier fly farming not only offers cost reduction, but is also incredible in the aspects of eco-social benefits that it has to offer, Maanasvi Lamichhane, Research Associate at Agri Direct Global, said during the presentation. 

“Environmentally, we reduce 10 kg of carbon dioxide equivalent per kg of black soldier fly product by diverting the waste from landfills, replacing the soybean protein and the chemical fertilisers,” said Lamichhane. “This reduction is equivalent to the amount of carbon dioxide a single tree absorbs in the span of six months.”

“By reducing the cost of production and dependency upon foreign imports, we are promoting farmers towards economic resilience,” she added. 

Besides, Shahi, Shrestha and Lamichhane, other members of the team are biotechnologist Sumitra Tamang, who looks after finance, research and design; chemical engineer Chiranjeevi Joshi, the production manager; and Sumitra Dhungel, who is assigned farmer engagement. 

Puri from the Nepal Feed Industries Association, told NBA that alternatives to feed such as the one innovated by the Agri Direct Global cannot be implemented on a larger scale. The authorities concerned need to facilitate the 113 feed manufacturing plants in the country with the regular supply of maize and soybean meal, he added.

“The tax policies have created price differences in India and Nepal, only promoting illegal imports through the open border,” said Puri. “The poultry industry–which employs 200,000 individuals directly and 500,000 indirectly, and once had a 4 percent contribution to the GDP–is in the state of decline.”

Read: Nepal’s Poultry Business in Crisis 

“We have urged the government time and again to remove import duties on corn and soybean meal or increase their production in the country to meet our demand, but to no avail,” Puri told NBA.

However, Agri Direct Global targets to increase its revenue to Rs 20 million, and earn a profit of Rs 2.3 million, in the next six years. It seeks experts’ support regarding intellectual property and technology in order to protect the invention and ensure its smoother technology transfer. 

In the final event of the Climate Challenge Competition, the innovators said that they are seeking an investment of Rs 5 million to scale up their business and achieve the targeted goals.  “As we have already proven to be a sustainable business, we can ensure that the investment will be worth making,” Lamichhane said. 

In a feedback to their presentation, one of the three judges, Neelima Vallangi, a prominent voice to the critical field of climate change journalism, said that methane’s global warming potential is 20 times greater than that of carbon dioxide. 

“With organic waste, when it goes to the landfills and undergoes anaerobic decomposition, that's when methane is released,” said Vallangi. “If you are controlling methane, that is a huge benefit to the climate.”

(NBA Photo)

Moreover, Agri Direct Global was declared the most innovative, scalable and impactful startup in the final of the competition organised by Startup Discovery Asia (SDA).  It bagged the cash prize of Rs 100,000. The finalists would also gain access to investor networks, global exposure, and mentorship opportunities, according to the organisers.

Seven finalists , selected among 122 applicants, pitched their innovative climate solutions to a panel of three judges at EDEN amphitheatre in Sanepa, Lalitpur on November 13. The competition offered a unique platform aimed at empowering Nepali startups to pioneer climate action.

With a prize pool of up to Rs 200,000, the competition aimed to empower individuals and organisations working in the key focus areas–including food systems, electric mobility, water and sanitation, disaster preparedness and response, digitisation for climate change, clean and circular energy, and manufacturing–critical to combating climate change.

Read: Startup Discovery Asia Paves the Way to Find Nepal’s Climate Champions

The finalists–RVM Nepal, Climetrace, Sakal Bio Enzyme Nepal, Indra Barah Pipe Udhyog, VayuDrishti, Grevolution, and Agri Direct Global–were selected through rigorous screening and interviews.

SDA, which believes in the power of innovative solutions that prioritise profit, planet, and people, said that the competition was a call to climate action. 

“We are working at the intersection of climate, innovation and diversity,” said Ankshita Chaudhary, co- founder and Chief Executive Officer at SDA, during the final event last Wednesday. “We are identifying and backing founders that are tackling the region’s biggest climate challenges.”

(The news report has been updated to correct the data regarding the import of maize and soybean.)