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Ultrasonic humidifier? Check. Swiftlet Bazooka Tweeter? Check. Feces powder? Er, check. All you need now is a multistory house with no doors or windows but plenty of holes, and you're almost ready to join one of Southeast Asia's fastest-growing cottage industries: harvesting edible birds' nests.

You'll also need birds, of course — lots of them. That's the tricky part.

Edible birds' nests are the handiwork of the swiftlet, a small bird found mostly in Southeast Asia that builds its nests from its saliva. Bird's-nest soup is an expensive delicacy served across the Chinese-speaking world, and the basic ingredient is in such demand that nests are sometimes called "white gold" or the "caviar of the East." In Bangkok, an 11-oz. (300 g) box can cost $2,600, while so-called health drinks comprising just 1.1% nest sell for $4 a jar. Aficionados attribute nests with the power to treat everything from cold sores to tuberculosis, and to boost both longevity and sexual prowess.

Until recently, nests were mainly harvested from caves in the wild, and the trade was dominated by a ruthless and well-connected élite. Now, fueled by insatiable demand from prospering China, a regional boom in farming nests in purpose-built birdhouses — "swiftlet condos," as they're sometimes called — is democratizing the business. "It's recession-proof," enthuses Harry Kok, a retired Malaysian engineer who owns or has shares in five birdhouses and writes a blog on the subject from his Kuala Lumpur home. "The overheads are minimal. You don't have a factory with so many workers. Right now, those who have birdhouses are smiling."

The business has expanded so fast, and with such little oversight, that reliable numbers are hard to come by. There are perhaps 10,000 swiftlet buildings in Malaysia alone, which each year produce 144 metric tons of nests worth $160 million, reports the Malaysian government news agency Bernama. Nests from Thailand's 600 or more condos could be worth another $60 million, according to a 2007 Thai study, "Swiftlet Birds' Nests: Power, Conflict and Riches," by independent researcher Kasem Jandam. Judging by the number of swiftlet condos appearing in many Thai towns, these figures are probably gross underestimates. In Indonesia, the world's largest supplier, the industry is bigger than Malaysia's and Thailand's combined. Hong Kong, a major consumer, imported nests worth $276 million last year, up from $204 million in 2006, according to the Hong Kong Trade Development Council.

The little swiftlet has hatched a billion-dollar global business, including a subindustry of how-to books and bloggers who share tips on birdhouse construction and equipment. As with most properties, the value of a birdhouse depends on three factors: location, location, location. Before building one, advises Kok, you must survey the skies for a regular passage of swiftlets. Once constructed — a three-story birdhouse with room for about 40,000 nests costs roughly $100,000 — you must attract tenants. The maker of the Swiftlet Bazooka Tweeter claims it can broadcast "love calls" to birds flying up to a mile away. Humidifiers keep the interior of the house attractively damp like the caves swiftlets prefer. And don't forget your feces powder: bird droppings mixed with ammonium bicarbonate which, when sprinkled on the floor, make a new birdhouse smell like a well-established one.

Even if you build it, they don't always come. Up to two-thirds of birdhouses fail to attract a self-supporting colony of birds, estimates Kok. "We don't really understand them," he says. "They are wild animals. We find that they like to stay in dark areas. But at one hotel in Malacca they are nesting in bright light." Lucky producers can harvest two to four pounds of nests a month, worth up to $500 per pound ($1,100 per kg). Middlemen are buying up all the nests they can source, usually as quietly as possible. "They come to your doorstep and pay you cash," says Kok. "This business is a very secretive thing, because they're not paying any tax to the government. Everyone is doing it on an illegal or secret basis, where you declare 10 kilos but you are selling 1,000 kilos."

In some respects, the birdhouse business resembles the trade in nests harvested from the wild, a side of the industry that is murky and sometimes violent; in the past, only those with money, muscle and good political connections prospered. In Thailand, fewer than a dozen companies harvest nests from some 170 islands in the Gulf of Thailand and the Andaman Sea, in return for paying multimillion-dollar concession fees to the government. The remote islands are guarded by dozens of armed men — in effect private armies — and are often run "like independent states," says Jandam, the author of the industry study. Companies discourage all visitors, claiming they might disrupt the birds' habitat. In Koh Si Koh Ha, a string of islands in Phatthalung province, 14 suspected nest thieves were shot dead in two separate incidents in the early 1990s.

The connection between nests and violence continues to this day. The island of Koh Mak gets about $1.1 million in nest revenue every year, eight times more than the budget of some other Phatthalung subdistricts unblessed by nesting swiftlets. In 1997, the Thai government passed legislation to make the industry more transparent and ensure that government revenue from concessions is funneled back into local communities. But a string of unsolved murders on Koh Mak indicates hazardous aspects of the harvesting trade linger. Pradit Jariya, 35, has been administrative chief of the island for a year now. It's quite an achievement, considering the fates of the three subdistrict chiefs before him. Last July, his predecessor was sitting by a lagoon when the M-16-toting occupants of a speedboat pumped into him what one Thai newspaper termed "many tens of bullets." The man had been chief for just three months. The chief before him had lasted 10 months before being gunned down. And the chief before him met the same fate after eight months. None of the murders have been solved.

Given the risks of wild harvests, it's little wonder that the smart money has moved into the more genteel birdhouse business — although here, too, there are complications. Swiftlet condos have become local eyesores. Because nest theft is common, the untreated concrete structures often resemble secret weapons facilities, their roofs adorned with barbed wire and electric fences. Bird droppings are a potential health threat, too, while in some towns, the constant noise from Swiftlet Bazooka Tweeters and other callers has become "unbearable," admits Kok.

So far, the authorities in Southeast Asian countries have not been able to control the building, never mind collect taxes on the profits. But the industry is growing too big to ignore, and there are signs that it might not stay lightly regulated for much longer. Last year Malaysian forestry officials and police raided more than a dozen illegal swiftlet farms across Sarawak, a state where only two of an estimated 1,500 birdhouses have licenses. The rest contravene local wildlife-protection laws that forbid swiftlet farms in urban areas. Sarawak's once profitable industry is grounded for now. But with unflagging demand from China, and increasing numbers of birdhouses popping up in Vietnam, Cambodia and the Philippines, the regionwide trade in birds' nests is heading in only one direction: upward.

• Andrew Marshall
• In Southeast Asia, harvesting swiftlet nests is a booming — and somewhat shady — cottage industry