Several cost-effective methods can be used for the cultivation of azolla as a livestock feed. The one described here was developed by India’s Natural Resources Development Project (NARDEP) and reported by agriculaturalnetwork.org:
http://www.agriculturesnetwork.org/magazines/global/small-animals-in-focus/azolla-livestock-feed
Much of the information presented below is from NARDEP and the agriculaturalnetwork.org link listed above. The method is also documented in the following publication:
Kamalasanana Pillai, P, S. Premalatha, S. & Rajamony, S. 2001. Azolla – a sustainable feed substitute for livestock. LEISA India, Volume 4 number 1, March 2002.

NARDEP’s cultivation method
NARDEP therefore developed a method for cultivating azolla that is easy and economical for livestock farmers. One of its attractions is that the dung produced by livestock is used to help fertilize the azolla plants which, in turn, provide nutrition for the livestock.
• A water body is made, preferably under the shade of a tree, with the help of a silpauline sheet. Silpauline is a polythene tarpaulin which is resistant to the ultra violet radiation in sunlight. A pit of 2 x 2 x 0.2 m is dug as a first step.
• All corners of the pit should be at the same level so that a uniform water level can be maintained. The pit is covered with plastic gunnies to prevent the roots of the nearby trees piercing the silpauline sheet, which is spread over the plastic gunnies.
• About 10 – 15 kg of sieved fertile soil is uniformly spread over the silpauline sheet. Slurry made of 2 kg cow dung and 30 g of Super Phosphate mixed in 10 litres of water, is poured onto the sheet. More water is poured on to raise the water level to about 10 cm.
• About 0.5 – 1 kg of fresh and pure culture of azolla is placed in the water. This will grow rapidly and fill the pit within 10 – 15 days. From then on, 500 – 600 g of azolla can be harvested daily. A mixture of 20 g of Super Phosphate and about 1 kg of cow dung should be added once every 5 days in order to maintain rapid multiplication of the azolla and to maintain the daily yield of 500 g.
• A micronutrient mix containing magnesium, iron, copper, sulphur can also be added at weekly intervals to enhance the mineral content of azolla.

Summary of NARDEP’s method of azolla production
• It is important to keep azolla at the rapid multiplication growth phase with the minimum doubling time. Therefore biomass (around 200 g per square meter) should be removed every day or on alternate days to avoid overcrowding.
• Periodic application of cow-dung slurry, super phosphate and other macro and micronutrients except nitrogen, will keep the fern multiplying rapidly.
• The temperature should be kept below 25°C. If the temperature goes up the light intensity should be reduced by providing shade. If possible, it is best to place the production unit where it is shady.
• The pH should be tested periodically and should be maintained between 5.5 and 7.
• About 5 kg of bed soil should be replaced with fresh soil, once in 30 days, to avoid nitrogen build up and prevent micro-nutrient deficiency.
• 25 to 30 percent of the water also needs to be replaced with fresh water, once every 10 days, to prevent nitrogen build up in the bed.
• The bed should be cleaned, the water and soil replaced and new azolla inoculated once every six months.
• A fresh bed has to be prepared and inoculated with pure culture of azolla, when contaminated by pest and diseases.
• The azolla should be washed in fresh water before use to remove the smell of cow dung.

Harvesting and preparing azolla as livestock feed
• Harvest the floating azolla plants using a plastic tray having holes of 1 cm2 mesh size to drain the water.
• Wash the azolla to get rid of the cow dung smell. Washing also helps in separating the small plants which drain out of the tray. The plants along with water in the bucket can be poured back into the original bed.
• For use as a livestock feed, the fresh azolla should be mixed with commercial feed in 1:1 ratio to feed livestock. After a fortnight of feeding on azolla mixed with concentrate, livestock may be fed with azolla  without added concentrate.
• For poultry, azolla can be fed to egg layers as well as broilers.
• In case of severe pest attack the best option is to empty the entire bed and lay out a fresh bed in a different location.

Cost
The cost of producing azolla using NARDEPS’ method is less than Rs 0.65 per kilogram (approximately 0.015 US dollars, or 1½ cents per kg).

Trying it out
The following article by Anita Ingeval from the article Azolla: a sustainable feed for livestock illustrates the successful use of azolla as a livestock feed:
“After reading the article on azolla in the March 2002 issue of the LEISA India, the LEISA India columnist and organic farmer Mr. Narayan Reddy decided to test the production of azolla on his farm. As his grandchildren were visiting, they were set to dig the first bed of 2 x 3 x 0.15-0.2 m.
To simplify the construction, Mr. Reddy made some adaptations: He lined the bed with a simple plastic sheet, fixed the sheet with the dug out soil together with some concrete along the edges, taking care that the plastic above the water was well covered – as otherwise the sun will rapidly deteriorate the plastic. After fixing the plastic, about 2 – 3 cm of stone free soil was carefully put back in the bottom of the bed which was filled with water.
The water depth is important; too little water will allow the azolla roots to grow into the mud, making it difficult to harvest. Too much water will reduce the production as the roots do not reach close enough to the nutrients at the bottom.
After filling the bed, Mr. Reddy went off to the closest university to ask for some azolla plants and put them in the water. He added 0.5 – 1 kg of neem cake to prevent possible pest problems and every three weeks he adds slurry of cow dung and water (10 kg fresh cow dung).
One and a half years later Mr. Reddy is enthusiastic about azolla. He feeds it to his cows and chickens and after getting used to the azolla (in the beginning he mixed the azolla with concentrate) the animals love it. He has had to fence the bed to keep them out. He also uses the Azolla for salads, after washing it in fresh water and removing the root.
He empties and cleans the bed once every half year and starts it up again with some plants, neem cake and cow dung. When the temperatures soar in the summer, the bed is covered with a roof of loose palm leaves to give some shade and reduce light and temperature. However, the use of a simple plastic sheet for lining makes the bed very vulnerable – it can easily be damaged during harvesting or cleaning and Mr. Reddy therefore makes sure that he carries out these tasks himself.
With this simple system, the only costs are for the plastic sheet and for 2 kg of neem cake per year – plus his own labour.”