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CADDIS FLY is a small white moth like insect that will pupate under water and usually it will pupate in the stem or under the leaf of the waterlily. They will cut a piece of the stem and house inside it and attach themselves to another stem.
They will eventually rot the stem of the waterlily. Adding fish such as rainbow or gold fish to your pond will control some of the problem and they are also good in controlling mosquito larvae. The only other thing you can do is to remove the caddis fly by hand or removing the infected leaves.