How to Start Mushroom Farming Business? Key Points


Fungiculture is also known as the cultivation of mushrooms and other fungi. Cultivation of these fungi can yield food, medicine, construction material, and other products. 

A mushroom farm is a business of growing fungi. Button mushroom, oyster mushroom, and paddy straw mushroom are the most cultivated mushrooms in India.

 Special beds are formed for the cultivation of mushrooms, known as compost beds.

As mushrooms can be grown year-round, indoor and outdoor, and not typical weather is required for their cultivation. Therefore, mushroom farming is a large-scale business.

According to the sources, in 2020 the mushroom farm industry-valued about 46 $ billion, whereas the annual growth rate, which was projected was 9.5%.

The US is the world’s second-largest producer, whereas Europe is the world’s biggest consumer of mushrooms.

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How much amount of money is required to start a mushroom farm?

The cost of mushroom cultivation can range from 3000$ to 100,000$.

 In the farming industry, it is considered low among the starter crops.

The actual cost to start the mushroom business is to acquire a suitable space where you need a building with a concrete floor, adequate ventilation, and controlled temperature. Also, plenty of outdoor space is required, preferably, and it should be a concrete floor.


Mushroom farming business

Mushroom farming is mainly the business of growing fungi. Mushroom cultivation is currently the most productive and profitable business in India. It is gradually becoming popular because it converts a farmer’s hard work into profit in a short span of time. It is more sort of an alternative source of money.


How to start a mushroom farming business?

The mushroom farming business can be very beneficial and profitable, but it requires a lot of effort and hard work to grow it well. Uttar Pradesh, Haryana, Rajasthan are the states which are already dealing with mushroom cultivation. In contrast, cold states like Himachal Pradesh and Jammu, and Kashmir have also started the practice of mushroom farming.

Asia and Africa have a high demand for mushrooms.


Mushroom seed price

1 kg seeds cost about Rs.75, which can change through quality and brand; therefore, the decision should be taken beforehand that which mushrooms a person wants to grow.


Mushroom cultivation techniques

Artificially growing mushrooms requires a lot of space; therefore, our country has started mushroom farming in two ways that are: 

  • one can either create a company or start a business. 
  • If you are a farmer, you can grow the mushrooms on your farm.

 The only thing which will be required for mushroom farming is that the place should be covered from all the sides, just like a room if you are cultivating mushrooms.


Small scale mushroom growing

If your ultimate goal is to just add up a little extra income into your total sum, keep this on a small scale. It will not affect your primary business. 

When it comes to the cultivation of mushrooms and this particular business, everything which depends is on the land.

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Investment required for growing mushrooms

Investment level raises with a budget and the level of business. The money will be majorly spent on land, caretaking of mushrooms, and pesticides. If the business started on a small scale, then the amount spent can be estimated as Rs.10,000 to Rs.50,000, whereas if the business is a large scale one, the amount to be invested can be roundabout Rs.1,00,000 to Rs.10,00,000.


Mushroom farming profit margin

The growth rate worldwide is 12.9% which means that a good amount of profit can be earned in less time in this business. If the cultivation is started in a 10 square feet area, the profit of about Rs. 1,00,000 to Rs. 5,00,000 per year can be earned depending upon the technology used.


Material required for growing mushrooms

As mushrooms require lower temperatures for their growth, therefore the winter season is suitable for their development in India. Grass, bushels of wheat are required. Pesticides are also a necessity. The production can be done in a room, but moisture should be present all over; therefore, carbonic and carbonic chemicals along with nitrogen nutrients can be bought for better growth.


Before knowing what the mushroom farming business is, the most prior thing we should know is the types of mushrooms to be cultivated.

Three major types of mushrooms are harvested. They include 

  1. Button mushroom
  2. Oyster mushroom
  3. Patty stew mushroom. 

These mushrooms have separate importance and grow with different techniques and methods. 

The entire preparation to grow a mushroom is done on a special bed called the compost bed.


  • Button mushroom

Process of growing button mushroom includes:- 

  • Making compost 
  • Filling the compost tray  
  • Spawning casing 
  • Harvesting


  • Making compost

Making compost is the first step in the procedure of growing button mushrooms. This step is usually progressed in the open. Button mushrooms are grown on clean platforms which are made from concrete. The compost is prepared in two types that are :

  1. Natural compost
  2. Synthetic compost


  1. Natural compost

Natural, which clearly refers to Nature, gives a clear idea that natural compost is made up of some natural things like wheat, straw, horse dunk, gypsum, and poultry manure. After the preparation of the compost, spray water is prepared to wet the compost.


2. Synthetic compost

Synthetic compost is made out of urea, gypsum, bran with straw ammonium nitrate or ammonium sulfate. In the preparation of the synthetic compost, the straw is firstly cut into 8 to 20 cm. And all the things are mixed well with calcium nitrate, urea gypsum, and bran.


  • Filling the compost in a tray

Once the compost is prepared, the next step is Filling the compost in a tray.

During the preparation of the compost, it turns out to be dark brown. While spreading the compost in the tray, one should make sure that it shouldn’t be too wet or too dry. If the compost is too dry, spread a little water to moisten it. The tray must be made of softwood and should be made up to 15 to 18 cm deep to compost.


  • Spawning

The next step in the process of growing button mushrooms is spawning which means it is the process of sowing mycelium into the beds.

Spawning can be done in two ways

First by spreading the compost on the tray

Second by blending the mycelium with the compost before spreading it on the tray.

The tray can then be covered with the newspaper after the water is sprinkled to maintain the moisture within the tray.


  • Casing

After the process of spawning, the tray is to be covered with a thick layer of soil. The soil must is a mixture of garden soil and rotten cow dunk. 

Basically, The soil is known as casing soil. The soil has an amazing water holding capacity.


  • Harvesting mushroom

Latter to casing is harvesting. After 35 to 40 days of spawning and 15 to 20 days of the casing, mushroom pinheads appear. The heads can be held firmly and twisted softly from the soil.

These mushrooms are not advised to be stored in the refrigerator for more than 3 to 4 days and should be covered in a moist towel to make them long-lasting.


  • Oyster mushrooms

Oyster mushrooms are quite delicious and have the most straightforward growth process as they do not require any conditions like a button mushroom. Also, oyster mushrooms consist less of fat and are highly suggested by doctors to patients suffering from blood pressure and diabetes.

Process of growing oyster mushrooms

It includes two steps that are:-

  1. Process of substrate
  2. Process of spawning


  1. Process of substrate

As compared to the button mushrooms, oyster mushrooms can be produced with minimum effort. Banana tree waste, paper waste, and cotton waste are used to grow oyster mushrooms. They can be grown in 

  • rectangular blocks 
  • polythene bags


  • Rectangular blocks

To grow the oyster mushroom into rectangular blocks, a rectangular block of the wooden frame without a base is required and is to be covered with the polyethylene sheet. The base is then prepared by laying down a thin bed of paddy straw and is also wettened to provide moisture. Spawns are spread all over it, and another thin sheet of paddy straw is added. The exact process is repeated three to four times with a Paddy straw on the top.


  • Polythene bags

The paddy straws are to be cut into tiny pieces, and then the pieces are to be made wet by the water. All the excessive water will be separated from the straw and will be collected in the polythene bag, which consists of small holes for air circulation. Finally, the spawn is blended with body straw in the ratio of 0.2 is to 6.


  1.  Process of spawning

After 10 to 12 days, a small bud-like structure appearance is locked with straw within itself. This is considered the best time to remove the polythene and to put it on the shelves. It is to be watered twice a day.

After this, harvesting and storing of oyster mushrooms is done in a similar way to that of button mushrooms.


  1.   Paddy straw mushrooms

These mushrooms are the most popular and are eaten worldwide. They are primarily grown in Southeast Asia. Growing Paddy straw mushrooms is a highly profitable activity as it requires very little investment. They are also known as straw mushrooms.

The process of growth of these mushrooms required three-step that is:-

  1. spawning 
  2. bedding 
  3. mushrooming


  • Spawning 

Paddy straws are to be soaked to grow the mushrooms. When they are fully spawned, they are known as straw spawn.


  • Bedding

A strong base of brick and soil is prepared to make sure that it can hold enough weight. Other steps are to be redone continuously.


  • Mushrooming

Within 15 to 16 days, the mushrooms start appearing. The exact process of storing is followed.




The different types of diseases and their control measures in mushroom farming are as follows:


  • Dry bubble-It is controlled by treating the casing layer with heat at 63 “C or by using dithane Z. 78 @ 0.5%.


  • Wet bubble-It is treated by using 2% formalin for sterilization of beds and destroying the diseased mushrooms. Spraying benomyl @ 0.5 g/m² can control the disease.


  • Cinnamon mould– They are controlled by maintaining the moisture content in the casing layer and applying 0.5% of dithane Z-78.


  • Brown plaster mould-1% formalin spray can help, or 5% carbendazim application solves the problem.


  • False truffle-To avoid high temperatures during casing and spawning, the application of 2% formaldehyde can control the disease.


  • Green mould– 0.2% of dithane spray can control the growth of the mould.


  • Cobweb-1 g of benomyl, diluted in 1 litre water/m², can prevent the spread of cobweb diseases.


Nematodes, insects, and mites are the main pests that affect commercial mushroom farming. They can be dealt with with the following methods.


  1. Nematodes-By spreading 80 ppm of thionazin over the nematode-infested bed can be a possible solution
  2. Mushroom flies-Application of 0.05% of endosulphan can deduct the breeding of flies. The casing is treated with spraying neem oil spray, 0.05% of diazinon or Malathion, etc., to keep the flies away.


Cost of mushroom cultivation in India?

The mushroom industry in India is growing rapidly in terms of market value demand and beneficial effects. Young farmers are more interested in growing mushrooms, but the most common problem which arises is the cost required to grow the mushroom cultivation.

The answer to this question is

Mushroom cultivation in India costs approximately Rs.1,50,000. Out of which 20,000 are usually spent on wooden scrape shelves, Rs.1,25,000 on the cost of construction of rooms and the rest amount is used as the miscellaneous cost. (Rs.5000)


Mushroom farming training in India

The government is currently focusing more on Indian agriculture and is providing training to the farmers for better and effective production of crops. Therefore mushroom cultivation training started by the Indian government is an excellent opportunity for farmers who are interested in mushroom farming.


 Subsidies and loans for mushroom farming

Trained mushroom cultivators are provided with loans after preparing the project report for the cultivation process, which should be approved by the National Bank for Agriculture and Rural Development (NABARD/NHB). These cases are recommended to the nationalized banks for processing the loan amount that is required.


  • The National Horticulture Board also assists the mushroom farmers in the form of credit-linked back-end subsidies. The subsidy amount is 20% of the total project cost (maximum of 25 lakhs in typical areas and 30 lakhs in hilly regions).


  • The state government also provides subsidies to mushroom farmers to encourage the unemployed youth. The subsidy on compost is given for a maximum of 400 trays @ Rs 20 40/tray. 100% subsidy is given for the transportation of compost.


  • The Rashtriya Krishi Vikas Yojana assists Rs 80,000 for the construction of a mushroom house of dimensions 20 ft x 12 ft x 10 ft, other tools, etc.


  • Assistance to the mushroom farmers is provided by the Department of Agriculture and Cooperation under the scheme of the National Horticulture Mission. 


The key facts:


For spawn units, compost preparation and training – 100% assistance for the public sector and 50% of the total cost for the private sector in the form of subsidy (maximum subsidy Rs 50 lakhs)


Spawn production units -100% of the total cost for the public sector and 50% for the private sector (maximum subsidy Rs 15 lakhs).


Compost production unit – 100% of the cost to the public sector and 50% of the price to the private sector (maximum subsidy Rs 20 lakhs).