GUIDELINES FOR FORMULATION OF PROJECT PROPOSAL FOR MUSHROOM FARMING

Introduction

Mushrooms have been valued throughout the world as both food and medicine for thousands of years. They
are a rich source of nutrition and form a major chunk of health foods. Fats occur in mushrooms in minor
amounts, especially compared with protein and carbohydrates, and the fatty fraction consists predominantly of
unsaturated fatty acids such as linoleic acid, they may be the perfect food for maintaining a healthy heart and
cardiovascular system. Earlier Mushroom eating was restricted to specific regions and areas of the world but
due to globalization, interaction between different cultures, growing consumerism has ensured the accessibility
of Mushrooms in all areas. Mushrooms are increasingly gaining acceptance in different Cusines and in everday
consumption. They have created a space in a common man’s kitchen. Also, current trend of consumption
conveys the opportunity that lies in the area of mushroom exports.

The two most commonly grown species of mushroom in India are white Button mushroom and Oyster
mushroom. Most of the production of white button mushroom in our country is seasonal. The cultivation is done
using conventional methods. Usually, unpasteurized compost is used, hence yields are very low. However, in
recent years, yield of mushroom has increased as a result of introduction of improved agronomic practices.
Cultivation of the common white button mushroom requires technical skill. Apart from other factors, the system
requires humidity, two different temperatures i.e. Temperature for spawn or vegetative growth (Spawn Run):
22-280C, for reproductive Phase (fruit body formation): 15-180, Humidity: 85-95% and enough ventilation
during substrates that are sterilized are easily contaminated unless spawned under very aseptic conditions.
Therefore steaming at 1000 C (pasteurization) is more acceptable.

Pleurotus is the scientific name for Oyster mushroom. In many parts of India, it is known as Dhingri. This
mushroom includes many species e.g. Pleurotus ostreatus, P. sajor-caju, P. florida, P. sapidus, P. flabellatus, P.
eryngii and many other edible species. Mushroom growing is an occupation requiring perseverance, patience,
intelligent observation and a skill that can be developed only through intelligent experience.

Pleurotus mushroom requires a temperature of 20oC to 30oC, both for its vegetative growth (spawn run) and
reproductive phase, i.e. for formation of fruit bodies. The suitable cultivation period at high altitude - 1100-
1500 meters above mean sea level – is March to October, mid altitude - 600-1100 meters above mean sea level
– is February to May & September to November and at Low altitude - Below 600 meters above mean sea level –
is October to March.

Materials Required

1. Paddy Straw – Fresh golden yellow paddy straw free from moulds and properly stored in a dry place not
exposed to rain.

2. Plastic Sheet of 400 gauge thickness – 1 sq. m. of plastic sheet is required for making one block.

3. Wooden Mould – Wooden Mould of 45X30X15 cms size each having no top or bottom but having a separate
wooden cover 44X29 cms dimension.

4. Hand Chopper or Chaff cutter for cutting the straw.

5. Drum for boiling straw (minimum two).

6. Jute rope, coconut rope or plastic ropes

7. Gunny bags.

8. Spawn or mushroom culture– which can be obtained from the Office of the Assistant Pathologist,
Mushroom Development Center for each block.

9. One sprayer.

10. Straw Storage Shed -10X8m size.

Process:

Compost Preparation

Agricultural by products like cereal straw (wheat, barley, paddy, oat and rice), maize stalks, hay, sugarcane
bagasse or any other cellulose wastes can be used for compost preparation. Wheat straw should be freshly
harvested, shining yellow in colour and should not have been exposed to rains. The straw should be in about 5-
8cm long pieces, otherwise heap prepared by long straw would be less compact which may lead to improper
fermentation. Conversely; too short straw makes heap too compact to allow enough oxygen to enter the centre
of the heap and lead to anaerobic fermentation. Wheat straw or any of the above materials provide cellulose,
hemicellulose and lignin, which are utilized by the mushroom mycelium as the carbon source. These materials
also provide physical structure to the substrate needed to ensure proper aeration during composting for the
build up of microflora, which is essential for the fermentation. Rice and barley straw are very soft, degrade very
quickly during composting and also absorb more water as compared to wheat straw. While using these
substrates, care should, therefore, be taken on the quantity of water to be used, schedule of turnings and
adjustment to the rate and type of supplements. Since the byproducts used in composting do not have
adequate nitrogen and other components required for the fermentation process, compounding mixture is
supplemented with the nitrogen and carbohydrates, to start this process.

Spawning

Spawning is mixing of spawn infor optimum and timely yields. Optimum dose for spawn ranges between 0.5
and 0.75% of fresh weight of compost. Lower rates result in slow spread of mycelium and chances for diseases
and competitors may increase. Higher rates may increase cost of spawning and very high rate of spawn
sometimes results in unusual heating of compost.

The optimum temperature for growth of A. bisporus is 230 (+) (–) 20 C. Relative humidity in growing room
should range from 85-90% during spawn-run.

Harvesting

Usually 3 to 4 days after opening the bags, mushroom primordia begin to form. Mature mushrooms become
ready for harvesting in another 2 to 3 days. An average biological efficiency (fresh weight of mushrooms
harvested divided by air-dry substrate weight x 100) can range between 80 to 150% and sometimes even
more. To harvest the mushrooms, they are grasped by the stalk and gently twisted and pulled. A knife should
not be used. The mushrooms remain fresh for up to 3 to 6 days in a refrigerator/cool place.

Mushroom house / rooms.

Cube preparing Room

An ideal room should have an R.C.C. floor, well ventilated and dried. An R.C.C. platform of 2 cms. height
should be constructed inside the room for placing the wooden frame, for making cube and another R.C.C.
platform, according to necessity for draining of pasteurized bags of straw. Only those materials needed for cube
making are to be kept inside the room. Care should be taken to allow inside the room, only persons preparing
the cubes.
Incubation Room

A room for spawn running. This room can be either an R.C.C. building or an Assam type room (i.e., any
separate room in the house) and should be installed with shelves made of clean whole bamboo in three tiers for
keeping the block. The first tier should be 100cms above the ground and the other tiers should be at least
60cms apart.

Cropping Room

An ideal house/room would be an R.C.C. building installed with proper insulation and provisions for heating and
cooling the rooms. However, an indigenous low cost house has been recommended using locally available
materials like bamboo, thatch and mud plaster. Walls of split bamboo plastered evenly with a mixture of mud
and cow dung may be made.

In order to provide a crude insulation system, a second wall is made all around the house keeping about 15cms
space between the first wall and the second. Mud plastering should be done on the outside of the outside wall.
The air space in between the two walls will act as an insulator, since air is a bad conductor of heat. An even
better insulation could be provided if the space between the walls is filled with well dried thatch. The floor of the
house should preferably be of cement but where it is not possible, a well-beaten and plastered mud floor will
suffice. However, more care will have to be taken in case of a mud floor. The roof should be made of thick
thatch layers or preferably asbestos sheets. A false ceiling is essential to avoid contamination of unwanted
materials from the thatch roof. Besides the front door, ventilators should also be provided from both the upper
and lower sides of the front and the rear side of the room for proper exchange of air inside the room. The
house/room should be installed /framed with horizontal and vertical bamboo poles required for hanging the
block after the incubation period. The vertical poles can also be arranged in a 3 (three)-tier system as the
incubation shelves. Poles should be preferably 60cms away from the walls and in between each row of three
tiers, a minimum space of 1m should be maintained. A cropping room of 3.0 X 2.5 X 2.0 m will accommodate
about 35 to 40 cubes.

Method

Chop the straw either manually or mechanically into bits of 3-5cms in length and pack in gunny bags. Boil
water in a drum. When the water start boiling, place the gunny bag along with the straw in the boiling water
and boil as such for 15 to 20 minutes. Then remove the gunny bag from the drum and leave as such for 8 to 10
hrs. to drain the excess waters and also allow the straw to cool. Care should be taken that the bag is not open
till the time of block making, as this will contaminate the boiled straw. The desirable moisture content of the
straw can be tested by squeezing the straw in between the palms, and see that droplets of water do not trickle
out from the straw.

Another method of pasteurization of the straw is by steaming. This method requires little modification of the
drum. (Punch a small hole in the lid of the drum, and while boiling the straw, seal the surrounding of the lid
with a rubber tube). The chopped straw should be previously wetted and excess water drained off. Place a few
stones in the drum and pour water only at the level of the stones. Boiled the wetted straw by keeping it in a
bamboo basket and place the basket over the stones inside the drum. Close the lid of the drum and seal the rim
of the lid by means of a rubber tube. The steam generated from the boiled water will pass through the straw
and pasteurize it. After boiling, transfer the straw into a previously sterilized gunny bag and leave it as such for
8-10 hrs. for cooling.

Take a wooden frame and place on a smooth floor. Place jute ropes, two vertically and one horizontally. Line
the frame with a plastic sheet, previously sterilized by dipping in boiled water.

- Fill approximately 5cms of boiled straw and compress it with the help of a wooden lid and sprinkle spawn
over the whole surface.

- After the first layer of spawning, put another 5cms of straw and again sprinkle spawn over the surface,
compress it as in the first layer. In this way, continue to sprinkle spawn over the layer of straw for 4 to 6
layers till the straw is in level with the top of the frame. Only (1) one packet of spawn should be used for
one cube or block.
- The plastic sheet is now folded over the top of the frame and tied down with help of jute ropes previously
placed below the plastic.

- After tying, the frame can be removed and what is left behind is a rectangular block of straw.

- Punch holes (2mm diameter) on all sides of the block for aeration.

- Place the block in an incubation room, side by side in shelves in single layer only taking care that they are
not place directly on the floor or on the top of each other as this will generate excess heat.

- The temperature of the block should be maintained at 25 0 C. This can be noted by inserting a thermometer
into the holes of the block. If the temperature rises above 250 C, it is advisable to aerate the room, and if
the temperature falls, the room should be slowly heated up.

- It takes 12 to15 days for the spawn to spread throughout the straw and when the entire block has been
completely white, it is a sign that spawn running is over.

- After spawn running, remove the ropes as well as the plastic sheet from the block. Tie the block vertically
with coconut rope and hang it in a cropping room. From this stage onwards, the relative humidity of the
room should not be less than 85%. This can be maintained by periodically spraying water on the walls and
floor of the room. If it is a cemented floor, it is advisable to pour water on the floor so that water always
remains on the floor. If the block shows signs of drying light, spraying can be done with the help of
sprayer.

- Within a week to 10 days, tiny pinheads will be seen on the surface of the block and these will grow into
full-size mushrooms within a day or two.

- When fruits bodies start forming, the requirement of air is increased. Therefore, once fruit bodies start
forming, it is essential that there is an exchange of fresh air every 6 to 12 hrs, by opening the ventilator
provided at the front and backside of the room.

- The fruits bodies (mushrooms) are ready for picking just when the periphery of the caps starts turning
upward. This will be evident as small crinkles appear on the side of the piles (cap). To harvest the
mushrooms, take hold of the stripe (stalk) at the base with thumb and forefinger and with a gentle anti-
clockwise twist, detach the mushroom from the straw without disturbing the straw or any small mushroom
growing alongside. Do not use knife or scissors for harvesting. The block will again come to fruiting after
about a week.

Yield

Mushrooms appear in flushes. About 2 to 3 flushes may be harvested from a single cube. The yield of the first
flush is more and then gradually decreases, giving a total yield of 1.5 kg to 2 kg of fresh mushroom from one
cube. Then the cube is discarded and dump in a pit situated far from the cropping room or can be used as
manure in a garden or field.

Preservation

Mushroom can be consumed fresh or may be dried. Since they are highly perishable in nature, it is necessary
to preserve the product for further use or for distant marketing. The oldest and cheapest method of preserving
oyster mushroom is by sun drying.

Hot air drying is effectively used, whereby mushrooms are dried in the equipment called "Dehydrator" (a locally
designed equipment). Mushrooms are placed in wire netted racks fitted in a closed chamber and hot air (500 C –
550 C) is passed through the rack for about 7 to 8 hrs. After drying the mushroom, it can be stored in air-tight
containers or sealed in poly bags for 6 to 8 months. After complete drying, the mushroom are reduce to about
1/13th of their fresh weight which may vary depending upon the variety. The dried mushroom can be easily re-
hydrated when soaked in warm water.
Diseases and Pests

A number of diseases and pests may attack the mushroom crop if left un-cared.

Disease

1. Green mould (Trichoderma viridae): It is the most common disease in oyster mushroom where green
coloured patches are observed on cubes.

Control : Dip a cotton swab in formalin solution (4%) and scrapped off the affected area. If the fungus
attacks more than half of the cube then the entire cube should be discarded. Care should be taken that the
contaminated cube is burnt or buried in a place far from the cropping room to avoid re-infection.

Insects

2. Flies: Scarid flies, Phorid flies, Cecid flies are found to be attracted to mushroom and odour of spawn.
They lay eggs on the straw or mushrooms, and the larva emerging from them damage the crop. Larva feed
on the mycelium, mushroom and penetrate inside the fruiting bodies making it unfit for consumption.

Control: To check entry of adult flies during the cropping period, screen the doors, windows or ventilators,
if any with 30mesh nylon or wire net. Use fly-trap or repellent in mushroom house.

3. Mites: These are very thin, small crawling insects that appear on the mushroom body. They are not
damaging, but annoyed the grower when present in large numbers.

Control: Maintain a hygienic condition of the house as well as its surroundings.

4. Slugs, Snails: These pests chew up portion of the mushroom which may later get infected with bacteria
and affect the quality of the crop.

Control: Remove the pests from the cubes and kill them. Maintain hygienic conditions.

Other Pests

5. Rodents: The attack by rodents is found mostly in low cost mushroom house (mud house). They eat the
grain spawn and make holes inside the cubes.

Control: Use rat poison bait in the mushroom house. Burrow of rats should be close down with glass pieces
and plaster.

6. Ink caps (Coprinus spp.): It is a weed of mushroom that develop on the cubes before cropping begins.
They subsequently disintegrate into a black sliming mass at maturity.

Control: Physical removal of Coprinus from the cube is the only control measure recommended.

Precautions

"Prevention is better than cure" is the fundamental motto of mushroom growing since it is a very delicate crop
and curative measures are often difficult. The mushroom itself being a fungus, when fungal diseases appear, it
is often very difficult to control as the chemicals used against the disease may affect the mushroom itself. Thus,
infinite care has to be exercised from the very start to discourage the entry of any foreign "germs" or
contamination. The following precautions should not be over-looked :
 The very first requirement in mushroom growing is sanitation and hygienic conditions. Most of the
problems in mushroom growing arise due to improper hygiene:

1. The room where mushrooms are to be grown should be thoroughly washed and then whitewashed with lime.
The floor should also be limed.

2. The surrounding of the house should be devoid of stagnant drains, shrubs and other weeds as these harbour
harmful diseases and insect pests.

3. At the entry of every room, there should be a trough filled with 2% formalin solution, wherein the shoes or
feet must be dipped before entering the room.

4. The workers should be clean and preferably wear clean overalls.

5. No trash or surplus straw etc. should be left around the house.

6. In case of contamination, the contaminated block should be remove to a spot well away from the house and
buried in a pit or burnt.

7. At the end of every cropping process, the room should be washed again and white- washed and fumigated
with formalin.

8. The plastic sheets should be washed thoroughly and then soaked in 2% formalin as a final wash and then
dried out, after every lot is removed.

9. Any fallen bits of straw or mushroom should not be left on the floor of the room. Cleaning and cutting off of
the base of the mushroom stalk should be done outside the growing room and properly disposed off.

10. Broken pieces of the mushroom stalk, while harvesting, should not be left on the blocks. If the stalk breaks,
it should be removed entirely from the bed.

11. Clean straw is important for mushroom growing. While preparing the block, care should be taken that it is
properly compressed. The more the compression, the better will be the spawn running.

12. Excessive moisture at any stage of growth is harmful. The environment should be damp but not wet. For
this reason a sprayer with a very fine nozzle is advisable to avoid large droplets. Excessive moisture will
invite unwanted contaminants, which will be a hindrance, and in many cases will be serious competitors to
the mushroom spawn.

13. While raising the temperature of the room, when required, care should be taken that there is no sudden rise
in temperature. The temperature should be raised gradually till it attains the required level.

14. When placing the block for spawn running do not place them on top of each other, otherwise this will
generate excess heat. Place the blocks side by side in single layers only.

15. The block should not be left un-opened in the plastic for more than 24 hours after the spawn has completely
impregnated the straw.

16. There should be gentle exchange of air in the room with fresh air. Wind current cause drying and formation
of malformed mushroom.

Objectives

The main focus of the project should be motivation, Training, Information dissemination, Technical and
Financial assistance for preparation of culture/spawn cultivation, harvesting, storage, processing, packaging,
marketing linkages with farmers to increase employment opportunities and generating income.

The project should include one or all of the following activities

1. Awareness generation, motivation and involvement of farmers in cultivation of Mushrooms.

2. The Project should target at providing technical training to women, small, marginal and landless
farmers, rural youth etc.

3. Providing technical and financial assistance to the farmers for developing Spawn/culture centers.

4. Information dissemination to the farmers, tribals about the market available for different varieties of
Mushrooms. Identification and arrangement of suitable market for the collected produce.

5. Conducting meetings/ seminars/ workshops for providing common platform for farmers and marketers.

6. Documentation and publication of useful information concerning preparation of Spawn/culture, techniques of

cultivation of various types of mushroom, their semi-processing and preservation, quality control packaging
and marketing.

7. Networking and collaboration among the various stakeholders dealing with Mushroom Cultivation and
marketing.

Eligibility

Voluntary Organisation working in rural areas with a legal status of a society registered for 3 years under
Societies Registration Act XXI, 1860 or any corresponding state Act or a Trust registered under Indian Trust
Act, 1882 or the Charitable and Religious Trusts Act, 1920 will be eligible for financial assistance subject to the
condition that:-
Ø The VO should have a nationalised Bank or Post Office A/c for last three years.
Ø The VO should be working in rural areas, even if the Hqrs. are in urban area.
Ø The VO should possess Permanent Account Number (PAN) of Income Tax Department.
Ø The VO should not be under funding restriction.

Criteria for project assistance:-

1) The mushroom farming activities will be extended to the farmers in general and small and marginal
farmers in particular by eligible and competent voluntary organizations, who will provide technical and
supervisory support to the farmers.
2) The project proposal should be short-term result oriented in nature, normally upto 1 to 2 years.

Preparation and submission of project proposal

The project proposal should be prepared on the lines of the format prescribed by CAPART. The objectives of the
proposal should be precise and well defined indicating the likely benefits to be derived and specified the
category of beneficiaries. The action programmes and methodology of implementation of the activities should
be as detailed as possible and clear outlining the work allocation and time schedule of each activity. Two copies
of the project proposal complete in all respects with organizational profile, Registration Certificate, certified
photocopy of Memorandum and Bye-laws and, Audited Statement of Accounts, Annual Report, Bank/Post Office
Accounts of last three years and Permanent Account Number of the Organization should be forwarded to
CAPART’s Regional Committee for project costing upto 20 lakhs, and Budget above Rs. 20 Lakhs to the CAPART
head Quarters New Delhi.

Economics:

An average yield of 2 kgs per cube (45 X 30 X 15 cms ) are expected from a well maintained
mushroom house, although in some cases, an average yield of 3 kgs per cube are obtained. The prevailing
market rate of fresh Pleurotus mushroom range from Rs. 50/- to Rs. 60/- per kg and the present estimated
overall cost of production is approximately at Rs. 25/-per kg. Hence the farmer obtains a 100% profit from
Pleurotus mushroom cultivation

a) Infrastructure/equipment/materials:

300 sq.ft. thatched shed and erection of 6 tier : Rs. 10,000-00

bamboo racks- material support.

Cost of trays for mushroom beds and other : Rs. 5,000-00

Covering materials. : Rs. 15,000-00

Operational Costs

Cost of substrates (straws etc) per year :7,000-00

Cost of plastic bags for packing products/year:1,500-00

Cost of Spawns/year :6,000-00

Miscellaneous costs (Chemical etc.) : 1,500-00

_________

16,000-00

The Spawn Unit will prepare spawns and distribute to the 20 cultivators and collect/purchase their
products for collective local marketing. The expenses in this regard would be:

1. Infrastructure/equipment/materials:

i) 40’ x 10’ floor area shed @ Rs. 150/- per sq.ft: 60,000-00

ii) A 22 liter pressure cooker : 40,000-00

iii) LPG Gas cylinder & stove : 9,000-00

iv) Miscellaneous utensils/accessories : 2,000-00

___________
 75,000-00

2. Operational Costs:

i) first Generation Spawns in glass glucose bottles:

FGS x 25 Cycles = 200 FGS @ Rs. 70/- : “ 14,000-00

ii) Tissue Culture in Glass Test Tubes – 3 Beds X 20 cultivators

= 60 Beds x 14 days per cycles

308 second generation spawns in polypropylene

pouches ( 104 Tissue Culture yearly x Rs. 100/- : “10,400-00

iii Polypropylene bags @ Rs. 250 x 26 cycles : :” 6,500-00

Cost of 2800 Kg. Jowar/Wheat grains

required for culturing 26 cycles @ Rs. 10/- per Kg.

iv) Cost of other chemical components &

miscellaneous expenses

1. THE PROPOSED BUDGET:

A. Capital Investment Credit Support:

1. The Beneficiaries:

Credit Investment Support to 20 identified

Beneficiaries @ Rs. 20,000/- per beneficiary Rs. 4,00,000-00

(Rs. 20000/- x 20) vide illustration 4.3 above

2. The Spawn Center:

Infrastructure costs, operational costs

and purchase credit capital as detailed Rs. 2,10,900-00

under 4.3 above. Rs. 6,10,900-00

B. Operational Grants:
 1. Training for the identical 20 beneficiaries Rs. 10,000-00

in scientific Topical Mushroom Cultivation

2. Salary for a Coordinator of the project @

Rs. 5000/- per month Rs. 60,000-00

(Rs. 5000 x 12 months)

3. Technical & /Resource support from expert Rs: 10,000-00

4. Administrative expenses 10% of the

total budget ( Communications, stationers Rs. 87,600-00

and contributory establishment costs)

Grand Total Rs. 7,78,500-00

Project Proposal Components: -

The project proposal is prepared as per the ARTS guidelines.

The proposed activities and methodologies should be specified such as:

1. Awareness Generation and Motivation

2. Training

3. Cultivation

· Compost preparation

· Preparation Of mushroom House / Rooms-Cube Preparing Room /Incubation room/ Cropping Room

· Spawn /Culture

4. Semi-processing/ Packaging

5. Marketing

6. Documentation and Publication

7. Staff Salaries

8. Travel/TA/DA

9. Equipment
10. Contingencies/Unforeseen Expenses

9. Budget

(i) Infrastructure (shed etc.)

(ii) Equipment(trays,polythene bags ,cylinders,Drums etc)

(iii) Raw Materials and Supplies (Straw Chemicals etc).

(iv)Awareness and Training

(v) Salaries(Technical support/consultancy/supervisor/extension worker)

(vi) Processing and Packaging

(vii)Marketing Linkage

(viii)Unforseen/Miscellaneous

(ix) Administrative Expenses

Resource Institutions

1. Peermade Development Society

Peermade, Idukki,

Kerala

2. Himalaya Environmental Studies and Conservation Organization (HESCO)

Ghisarpadi, PO Mehuwala via Majra,

District Dehradun – 248001

Uttaranchal.

3. Mitra Niketan

PO-Mitraniketan

Vallanad – 695543

Kerala
4. Indian Agriculture Research Institute

New Delhi.
 BUTTON MUSHROOM

1. 1. INTRODUCTION

Button Mushroom (Agaricus spp.) is the most popular mushroom variety grown and
consumed the world over. In India, its production earlier was limited to the winter season, but
with technology development, these are produced almost throughout the year in small,
medium and large farms, adopting different levels of technology. The species being grown in
most farms is the white button mushroom (Agaricus bisporus) belonging to Class
Basidiomycetes and Family Agaricaceae.

2. 2. OBJECTIVE

The main objective of the exercise is to present a small scale viable bankable model
production unit through adoption of appropriate technology, utilization of resources and
suitable market strategy.

3. 3. BACKGROUND

1.1 3.1 Origin

Cultivation of button mushrooms (A.bisporus) started in the sixteenth century. However, on a

commercial scale, the cultivation was initiated in Europe around 17th Century. Many farms for
production of button mushrooms were established and this variety still dominates the world
production and consumption. India, with its diverse agroclimate conditions and abundance of
agricultural wastes, has been producing mushrooms, mainly for the domestic market, for
more than four decades. Commercial production picked up in the nineties and several hi-
tech export oriented farms were set up with foreign technology collaborations. But major
share of mushroom production is still on small farms.

1.2 3.2 Botanical Description

The vegetative mycelium is composed of many inter-woven sepatate hyphae. The

reproductive phase is initiated by the formation of small knob like swellings at different points
of interwoven mycelial strands. These swellings increase in size and break through the
surface of the substratum as small balls constituting the button stage. A matured basidiocarp
(fruit body) is whitish in colour and consists of thick short stipe with an annulus. The stipe
supports the pileus which appears as a hat like expansion. On the underside of the pileus, a
number of radiating gills or lamella are present which are pink when young but purple-brown
when mature.

1.3 3.3 Production Status

 Large scale white button mushroom production is centred in Europe (mainly western part),
North America (USA, Canada) and S.E. Asia (China, Korea, Indonesia, Taiwan and India).
The national annual production of mushrooms is estimated to be around 50,000 tonnes with
85 percent of this production being of button mushrooms.

1.4 3.4 Economic Importance

Mushrooms are highly proteinaceous and are used as food. The white button mushroom is
sold as fresh mushroom or is canned and made into soups, sauces and other food products.
Protein in mushrooms have 60-70 % digestibility and contains all the essential amino acids.
It has medicinal properties also. A high amount of retene is present in the button mushroom
which is supposed to have an antagonistic effect on some forms of tumours.

2. 4. MARKET ANALYSIS AND STRATEGY

2.1 4.1 Demand and Supply Patterns

White button mushrooms are grown all over the world and account for 35-45 % of the total
mushroom production. In India, large units with production capacities between 2000 – 3000
tonnes / annum, have been set up mainly as export oriented units in the southern, western
and northern regions. A large number of small units without climatic control equipment exist
throughout India and function during the autumn and winter months only.

A big gap exists between the demand and supply position of white button mushrooms in the
United States and European market. India exports the highest quantity of the mushroom
produced in the country to USA. Netherlands and China account for 60% of the export of
mushrooms. Germany is the largest importer and France and UK are large producers as well
as consumers.

The demand for fresh mushroom is increasing in the international market while that of
preserved or canned mushrooms is decreasing. The trend in export of mushrooms (fresh
and dried/preserved form) from India during the period 1999-2000 to 2001-2002 is depicted
in the graphs below.
 The possibilities of exporting fresh mushrooms to the markets in Middle East, Europe and
USA need to be explored. Europe is a very large producer of fresh button mushrooms as
such only some exotic varieties of mushrooms which are high priced can be exported to
these countries. However, some inhibiting factors are high cost of transportation and
absence of proper pre-cooling techniques and storage facilities.

Marketing problem is experienced in the winter months (December- February) when more
than 75% of the annual production comes in market for sale in limited duration and market
area. Farmers face the consequences of over-saturated market and are forced to sell their
produce at a cheaper price. The commercial units need to establish mushroom processing
unit so that during peak periods when there is glut of mushrooms in the market, the growers
can resort to preservation of mushroom and as such fluctuation in prices will not affect the
project economy.

The price of fresh mushrooms during May-June in different markets viz. Chandigarh, Delhi
and Mumbai varies between Rs.50 and Rs.100 /kg. Any mushroom unit located in and
around the main markets should be able to make sufficient profit as they can save on
transportation of produce.

2.2 4.2 Import / Export Trends

Netherlands is the leading exporter of button mushrooms (40% share) followed by China,
France, Spain, Hong Kong, Taiwan, Indonesia and South Korea. USA is the largest
consumer accounting for one third of World production. Other important consumers are
Germany, UK, France, Italy and Canada. The quantity of mushrooms exported by India in
comparison to the world export is almost negligible. The following tables 1& 2 gives the
export status of fresh and dried mushrooms.

Table-1: Country-wise quantity and value of fresh mushrooms

exported from India during 2001 – 02.
 (Qty: tonnes; Value: Rs lakhs)
Fresh Mushrooms
Country
Quantity Value
Ireland 40.80 14.55
Singapore 0.05 0.02
U.A.E 0.05 0.01
U.S.A 11756.73 5090.72
Total 11797.63 5105.30
Source: APEDA, New Delhi

Table-2: Country-wise quantity and value of preserved/dried

mushrooms exported from India during 2001 – 02

(Qty: tonnes; Value: Rs lakhs)

Preserved/dried mushrooms
Country
Quantity Value
France 40.00 41.64
Japan 1.00 10.36
Nigeria 6.58 5.59
Russia 11.00 16.33
Switzerland 1.00 6.38
U.A.E 10.01 4.08
U.S.A 4029.66 2057.16
Total 4099.25 2142.25
Source: APEDA, New Delhi

The most important importers of white button mushroom are Germany, USA, France, U.K.
and Sweden. Canned button mushrooms are imported by UK, Germany, France, USA,
Sweden etc. Asian countries like China, Taiwan, Korea export their produce to the American
and European countries in the form of canned mushrooms.

2.3 4.3 Analysis and Future Strategy

Marketing of mushrooms in India is not yet organized. It is the simple system of producers
selling directly to retailer or even to the consumer. Wholesale distributor is mostly missing.
However, trade in the processed (canned and dried) is sizeable and organized. In other
countries 10% of the total cost is earmarked for marketing.
 Production of mushrooms, especially of the white button mushrooms, in India has gone up
during recent years creating marketing problems. The market for processed foods has yet to
develop in the country and basically fresh fruits and vegetables are preferred. Per capita
consumption of mushrooms in India is hardly 5 g. as against over a kg. in developed
countries. There has not been any serious effort to promote the product and to strengthen
and expand the market in order to increase consumption. The marginal increase in demand
is for fresh mushrooms instead of dried/preserved mushrooms. Fresh mushrooms have very
short shelf-life and therefore cannot be transported to long distances without refrigerated
transport facility. They are sold in the markets in and around the production areas.

The cultivation of white button mushrooms throughout the year under controlled condition is
restricted to a few commercial units and much of the production is under natural conditions
during the winters. Majority of the growers in India do not have pasteurization facility and
other sophisticated machinery/infrastructure for round the year production of white button
mushroom. As such, button mushroom is cultivated seasonally when climatic conditions are
favourable and production expenses are minimum. Many growers in Haryana, especially in
Sonepat, Ambala and Hisar have revolutionized the cultivation of white button mushroom by
adopting very simple and cheap technology of construction of mushroom houses (mud
houses with thathched roofs). Seasonal growing of white button mushroom in Haryana and
Punjab has many advantages like nearness to market, easy and cheap availability of raw
material coupled with utilization of family labour. The growers in HP do not use compost
prepared by long method because pasteurized compost is readily available from mushroom
projects located at Solan and Palampur.

3. 5. PRODUCTION TECHNOLOGY

3.1 5.1 Agro-climatic Requirements

In India, button mushrooms are grown seasonally and in environment controlled cropping
houses. White button mushroom requires 20-280 C for vegetative growth (spawn run) and
12-180 C for reproductive growth. Besides that it requires relative humidity of 80-90% and
enough ventilation during cropping. Seasonally, it is grown during the winter months in the
north-west plains of India and for 8-10 months in a year on the hills. However, with the
advent of modern cultivation technology it is now possible to cultivate this mushroom
anywhere in India.

The growers can take on an average 3-4 crops of white button mushrooms in a year
depending upon the type and varieties cultivated. Factors affecting the yield of the crop both
 in terms of quality and quantity are incidence of pests/pathogens and non-availability of pure
quality of spawn.

3.2 5.2 Growing and Potential Belts

The major producing states are Himachal Pradesh, Uttar Pradesh, Punjab, Haryana,
Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka.

3.3 5.3 Varieties / Strains

Ooty 1 and Ooty (BM) 2 (released in 2002) are the two strains of button mushrooms
released for commercial cultivation by the scientists of Horticulture Research Station of the
Tamil Nadu Agricultural University at Vijayanagaram, Ooty. The strains which are mostly
cultivated in India are S-11, TM-79 and Horst H3..

3.4 5.4 Cultivation Technology

The whole process of mushroom production can be divided into the following steps:

(i) (i) Spawn production

(ii) (ii) Compost preparation
(iii) (iii) Spawning
(iv) (iv) Spawn running
(v) (v) Casing
(vi) (vi) Fruiting

5.4.1 5.4.1 Spawn Production

Spawn is produced from fruiting culture / stocks of selected strains of mushrooms under
sterile conditions. Stock culture may be produced in the lab or may be obtained from other
reputed sources. Fruiting culture is mainly imported from various places including foreign
sources which give higher yield than Indian strains and the spawn is produced in the lab.
The spawn should be of good quality in terms of flavour, texture and size apart from having
potential for high yield and longer shelf life.

5.4.2 5.4.2 Compost Preparation

The substrate on which button mushroom grows is mainly prepared from a mixture of plant
wastes (cereal straw/ sugarcane bagasse etc.), salts (urea , superphosphate / gypsum etc),
supplements (rice bran/ wheat bran) and water. In order to produce 1 kg.of mushroom, 220
g. of dry substrate materials are required. It is recommended that each ton of compost
should contain 6.6 kg. nitrogen, 2.0 kg. phosphate and 5.0 kg. of potassium (N:P:K- 33:
10:25) which would get converted into 1.98% N, 0.62% P and 1.5% K on a dry weight basis.
The ratio of C: N in a good substrate should be 25-30 : 1 at the time of staking and 16-17 : 1
in the case of final compost.

(A) (A) Short Method of composting

During the first phase of compost preparation, paddy straw is placed in layers and sufficient
water is added to the stack along with fertilizers, wheat bran, molasses etc. The whole thing
is mixed thoroughly with the straw and made into a stack (almost 5feet high,5 feet wide and
of any length can be made with the help of wooden boards). The stack is turned and again
watered on the second day. On the fourth day the stack is again turned for the second time
by adding gypsum and watered. The third and final turning is given on the twelveth day
when the colour of the compost changes into dark brown and it starts emitting a strong smell
of ammonia.

The second phase is the pasteurization phase .The compost prepared as a result of microbe
mediated fermentation process needs to be pasteurized in order to kill undesirable microbes
and competitors and to convert ammonia into microbial protein.The whole process is carried
out inside a steaming room where an air temperature of 600 C is maintained for 4 hours. The
compost finally obtained should be granular in structure with 70% moisture content and pH
7.5. It should have a dark brown colour, sweet unobnoxious smell and free from ammonia,
insects and nematodes. After the process is complete, the substrate is cooled down to 250
C.

(B) (B) Long Method of composting

The long method of composting is usually practiced in areas where facilities for steam
pasteurization is not available. In this method, the first turning is given about six days after
preparation of the substrate for composting. The second turning is given on the tenth day
followed by third one on the thirteenth day when gypsum is added. The fourth, fifth and sixth
turnings are given on the sixteenth, nineteenth and twenty-second day. On the twenty-fifth
day the seventh turning is given by adding 10% BHC (125 g.) and the eighth turning is given
on the twenty-eighth day after which it is checked whether there is any smell of ammonia
present in the compost. The compost is ready for spawning only if it doesn’t have any smell
of ammonia; otherwise a few more turnings are given at an interval of three days till there is
no smell of ammonia.

5.4.3 5.4.3 Spawning

The process of mixing spawn with compost is called spawning. The different methods
followed for spawning are given below:
 (i) (i) Spot Spawning: Lumps of spawn are planted in 5 cm. deep
holes made in the compost at a distance of 20-25 cm. The holes are later
covered with compost.
(ii) (ii) Surface Spawning: The spawn is evenly spread in the top
layer of the compost and then mixed to a depth of 3-5 cm. The top portion is
covered with a thin layer of compost.
(iii) (iii) Layer Spawning: About 3-4 layers of spawn mixed with
compost are prepared which is again covered with a thin layer of compost like
in surface spawning.

The spawn is mixed through the whole mass of compost at the rate of 7.5 ml./ kg. compost
or 500 to 750 g./ 100 kg. compost (0.5 to 0.75%).

5.4.4 5.4.4 Spawn Running

After the spawning process is over, the compost is filled in polythene bags(90x90 cm., 150
gauge thick having a capacity of 20-25 kg. per bag)/ trays(mostly wooden trays 1x1/2 m.
accommodating 20-30 kg. compost) / shelves which are either covered with a newspaper
sheet or polythene. The fungal bodies grow out from the spawn and take about two weeks
(12-14 days) to colonise. The temperature maintained in cropping room is 23 ± 20 C. Higher
temperature is detrimental for growth of the spawn and any temperature below than that
specified for the purpose would result in slower spawn run. The relative humidity should be
around 90% and a higher than normal CO2 concentration would be beneficial.

5.4.5 5.4.5 Casing

The compost beds after complete spawn run should be covered with a layer of soil (casing)
about 3-4 cm. thick to induce fruiting. The casing material should be having high porosity,
water holding capacity and the pH should range between 7-7.5. Peat moss which is
considered to be the best casing material is not available in India, as such the mixtures like
garden loam soil and sand (4:1); decomposed cowdung and loam soil (1:1) and spent
compost (2-3 years old); sand and lime are commonly used.

The casing soil before application should be either pasteurized (at 66-700 C for 7-8 hours),
treated with formaldehyde (2%), formaldehyde (2%) and bavistin (75 ppm.) or steam
sterilized. The treatment needs to be done at least 15 days before the material is used for
casing. After casing is done the temperature of the room is again maintained at 23-280 C and
relative humidity of 85-90% for another 8-10 days. Low CO2 concentration is favourable for
reproductive growth at this stage.

5.4.6 5.4.6 Fruiting

 Under favourable environmental conditions viz. temperature (initially 23 ± 20 C for about a
week and then 16 ± 20 C ), moisture (2-3 light sprays per day for moistening the casing
layer), humidity( above 85%), proper ventilation and CO2 concentration (0.08-0.15 %) the
fruit body initials which appear in the form of pin heads start growing and gradually develop
into button stage.

3.5 5.5 Pest & Diseases

The insect pests mostly observed are nematodes, mites and springtails.

The crop is suspect to several diseases like Dry Bubble (brown spot), Wet Bubble (White
Mould), Cobweb, Green Mould, False truffle (Truffle disease), Olive green mould, Brown
plaster mould and Bacterial blotch.

Professional help and extension advice will have to sought by the entrepreneur to adopt
appropriate and timely control measures against pests & diseases.

3.6 5.6 Harvesting and Yield

Harvesting is done at button stage and caps measuring 2.5 to 4 cm. across and closed are
ideal for the purpose. The first crop appears about three weeks after casing. Mushrooms
need to be harvested by light twisting without disturbing the casing soil. Once the
harvesting is complete, the gaps in the beds should be filled with fresh sterilized casing
material and then watered.

About 10-14 kg. fresh mushrooms per 100 kg. fresh compost can be obtained in two months
crop. Short method used for preparation of compost under natural conditions gives more
yield (15-20 kg. per 100 kg. compost).

4. 6. POST HARVEST MANAGEMENT

4.1 6.1 Packing and Storage

(A) (A) Short Term Storage

Button mushrooms are highly perishable. Harvested mushrooms are cut at the soil line and
washed in a solution of 5g. KMS in 10L. of water for removing the soil particles as well as to
induce whiteness. After removing excess water these are packed in perforated poly bags
each containing around 250-500 g. of mushrooms. They can be stored in polythene bags at
4-50 C for a short period of 3-4 days.

The mushrooms are usually packed in unlabelled simple polythene or polypropylene for
retail sale. Bulk packaging does not exist. In developed countries, modified atmosphere
packaging (MAP) and controlled atmosphere packaging (CAP) are in vogue.
 (B) (B) Long Term Storage

White button mushrooms are not usually dried by common procedures used in case of
oyster, paddy and shitake mushrooms. Canning is the most popular method of preserving
the white button mushrooms and sizeable quantity of canned produce are exported to
international markets. Besides that, freeze drying, IQF and pickling are also practiced by
some units.

5. 7. SOURCES OF TECHNOLOGY

(i) (i) National Centre for Mushroom, Chambaghat, Solan,

Himachal Pradesh-173213, [Tel: (01792) 30451, 30767]
 6. 8. ECONOMICS OF A SMALL SCALE MODEL

6.1 8.1 The demand for Button mushroom is fast increasing in international markets
and a big gap exists between supply and demand. There is need to take advantage of this
situation by encouraging its production which is a highly viable venture as brought out below:

Costs & Returns

6.2 8.2 The minimum viable production unit will require a land site of 1.5 acres. The
cost components of this model along with the basis for costing are exhibited in Annexure I.
A summary is given in the figure below. Inclusive of contingencies, the project cost works
out to Rs.107 lakhs as below.

(Rs. In Lakhs)
Project cost Amount
Land & Site Development 5.15
Building 44.96
Plant & Machinery 47.00
Misc. Fixed Assets 0.75
Contingency 4.88
Pre-Operative Cost 4.25
Total 106.99

6.3 8.3 The major components of the model are:

• • Cost of acquiring land and its development (Rs.5.15 lakhs): The land
would have to be acquired in areas well connected to urban markets. On an
average the cost of land might be put at Rs.3 lakhs per acre.

• • Cost of levelling the site (including fencing etc.) would be Rs.0.15

lakhs and cost of putting up guard rooms would be Rs.50 thousand.

• • Building (Rs.44.96 lakhs): The estimated cost of this component

works out to around Rs.45 lakhs, major item being growing room at the cost
of Rs.25.92 lakhs.

• • Plant & Machinery (Rs.47.00 lakhs): The cost of equipping the

production unit works out to Rs.30 lakhs, that of compost and casing unit to
Rs.7 lakhs and that of installing canning facilities, spawn Lab and other
equipments to Rs.10 lakhs.
 • • Miscellaneous Fixed Assets (Rs.0.75 lakhs): This is the estimated
cost of building up a communication system and furnishing.

• • Pre-operative Expenses (Rs.4.25 lakhs): These include professional

charges, administrative expenses and other start up expenses.

There would be three sources of financing the project as below:

Source Rs. Lakhs

Farmer’s share 53.50

Capital subsidy 21.40
Term loan 32.10
Total 107.00

6.4 8.4 Returns from the Project: Annexure II gives data on production cost and
profitability. The yield from the Unit is estimated at 200 tonnes per annum. Valued at
Rs.24,000 per tonne, the annual gross return would come to Rs.48 lakhs.

Financial Analysis:

6.5 8.5 The projected balance sheet of the model may be seen at Annexure III while
Annexure IV presents a cash flow statement.

6.6 8.6 Annexure V brings out the project profit and loss account over a 10 year
period. It would be seen that after accounting for all costs including depreciation, interest,
taxes and retained profit etc., there are net cash accruals every year from year 1 to year 10.
These, however, decline slightly over the 10 year period from Rs.20.70 lakhs in the first year
to Rs.16.10 lakhs in the final year.

Term Loan and Repayment:

6.7 8.7 The entrepreneur would have to seek a term loan of Rs.32.10 lakhs. The
repayment terms have been worked out at Annexure VI with a moratorium of 8 months and
11 half yearly installments of Rs.2.92 lakhs each. The interest rate has been put at 12%. The
entrepreneur, however, would have to negotiate the interest rate with his Bank. The
repayment schedule is presented in Annexure VI-A.

6.8 8.8 Depreciation calculations are given in Annexure VII.

6.9 8.9 Viability calculations are presented in Annexure VIII. The BCR works out to
1.3 and IRR (Pre-tax) to 26.4.

6.10 8.10 The average DSCR is estimated at 3.45 (Annexure IX). The pay-back
period of this model is 5.82 (Annexure X).

6.11 8.11 The break-even analysis (Annexure XI) indicates that the project would
break-even in year 4. At this point fixed cost would work out to 32.1% of gross sales.