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Mushroom cultivation project report for 5000 bags, investment, and profit in 2022

Mushroom is a strong alternative for vegan people in comparison to non-veg. Mushroom is best source of protein, and fulfill the need of fibre,  vitamin c, manganese, iron, zinc and more other nutrients.

In Indian markets there are few mushroom like Oyster and white button mushroom are most popular among people. In present time, mushrooms are very high in demand and in future they are going to be more popular. So there is a huge scope of mushroom cultivation in India.  

There are total 14000+ species of mushroom but most of them are poisonous. Only few of them are for eating, like oyster mushroom,  white button mushroom, enoki mushroom,  shimeji mushroom,  porcini and paddy straw mushroom. 

Mushroom cultivation project report

Mushrooms grows in a dark place inside  compost bags. These compost bags provide them all necessary elements to grow but standard quality of compost is required. 
You can buy it from outside or you can make of your own.
Let's understand the requirements for mushroom cultivation-

Requirement for mushroom farming/cultivation

Mushroom compost for 5000 bags 

You can either buy direct compost bags filled with layers of spawns or you can make compost at your home and mix spawns as you want by your hands. 
To make compost for mushrooms, follow the method-

To make compost for mushrooms,  you need almost 95 percent of bulky organic material like wheat straw. Remain  of 5% we use gypsum. Gypsum provides elements like calcium,  sulphur and nitrogen elements and make the compost more productive.

mushroom cultivation project report

To make this you need 50000 kg of organic material which is a not a big deal.  You can ask dairy farmers or general seasonal crop farmers for this. This 50000 kg will provide you 5000 bags of compost.

So you have to fill this organic material in bags and soaked in lime water for plenty of time. Next you have to dry the mixture till  the last few drops of moisture. The atmosphere to dry this should not be very cold and should maintain with presence of oxygen and nitrogen. 

Next,  crush this dry stuff by crusher.  Now mix it with the gypsum and horse/goat/chicken manure. Mix it will and your compost is ready to fill in bags.  But remember that don't use water again in the compost till not suggested. 


For 5000 bags (each 10 kg)  you need a 30m x 40m (120 square meter)  area for the huts. 

But you have to remember that the house should have exhaust for the air filtration. 

If you don't know the method then follow this-

  • First you need to make a frame by the wooden poles in a house shape. Four for the corners,  four for the mid and eight in making of roof. For this you have to dig some pits as much need to stay stand for poles. 
  • Next you have to use bricks and everything same as cement construction but instead of cement you have to use clay soil.  Remember to mix clay with water properly. Now Make the walls of the hut. 
  • Now mix clay soil with the chaff and wheat straws properly.  Use this mixture to daub the walls. Stay it in sunlight for few days and your hut is ready. 
  • Don't use plastic sheet to make hut but you can use bushes over a non heating material sheet on the roof. 
  • Otherwise, if you want to make housing from bricks and cement, it will increase your cost but work as same as hut. But one advantage is that it will last for at least 70 years. 

Bags for mushrooms

In process of growing oyster and white button mushroom farming you have to use a 10kg plastic bag in multiple numbers as much as you need but unit we choose is 10kg bag. 

In this bag you have to fill organic compost which is main source of necessary element to grow mushroom. 

There are two ways to get this compost.  You can buy it direct from the market or you can make of your own. 

Temperature and humidity 

You have to maintain the temperature cold inside the hut because mushrooms can't survive in warm weather. It should be 12 to 15 degree Celsius. 

You can use water showering in the hut time to time and note the temperature regularly in every 5 hours in winter and in every 1 hour in summer. 

In winters you have to maintain temperature too because too cold weather is awful to grow mushrooms. 

Exhaust and sunlight 

Don't let come sunlight inside the hut or onto the mushrooms because they can't survive in sunlight.  They only can survive in dark. 

Don't let direct air onto the mushrooms too because they don't need it. They can survive in the equilibrium State of air with respect to outside.  You can make exhaust in the hut which filter the air and maintain the need. 

Process of growing mushrooms 

  • Spawn sowing

There are two methods of sowing the spawn in the compost bags.

First is scattering or direct mix with the whole compost of bag. Make the holes in the bags if you are hanging them in the ropes. It is best for oyster mushrooms. 

Second is filling them in multiple layers. You just have to layer first of compost and then scatter the spawns, again same and so on.  It is best for white button mushrooms. 

  • Irrigation water 

Now remember, Don't shower water on them till 15 to 18 days because it is the time when mushrooms sprout appears from the compost. After 2, 3 days of appearance of sprout use water to harvest them by water showering but not in extra quantity. 

In first 15 to 18 days mushrooms takes Time to sprout but after that they need water time to time. If everything would be maintained then After 5 to 7 weeks mushrooms grow fully and ready for harvest. 

Harvesting of mushrooms

During collection process the best way is to just hold and twist them clean and properly.

First crop of mushrooms will be ready after 30 days and last up-to 3 months. 

Note: Dirty mushrooms (compost left on mushroom) not get their best price in the market. 

Marketing of mushrooms

There are two best ways to promote your mushroom yield. First is online promotion, and second is banners in your local areas. You can also develop a website for mushroom selling.

Money required for online marketing, is depend on the reach of the perticular platform. But generally, 25,000 INR are enough for one to two times. 

For posters and banners, you have to invest 15,000 INR to print them and paste them on holdings. 

Just by a proper reach, you can easily find an individual for your whole harvested crop. If you maintain your quality then that individual can be your permanent buyer. 

But you have to aware of marketing. You have to do it just before 15 days of harvesting mushrooms. 

Better market will be helpful for you to get better price and benefit. 

Investment required in mushroom farming(5000 compost bags)

One time investment 

  • Housing- 2,00,000 INR
  • Platforms for mushroom bags- 50,000 INR
  • Freezer- 50,000 INR 

Total cost- 3,00,000 INR

Per cycle investment

  • Compost cost- 5,00,000 INR
  • Polythene bags- 10,000 INR
  • Water cost- 5,000 INR
  • Spawn cost- 1,20,000 INR
  • Labor cost- 15,000 INR

Total cost- 6,50,000 INR. 

Profit in mushroom farming  Business(5000 compost bags)

  • Total yield of mushrooms in one cycle-8000 to 10000 kg
  • Market price of 1 kg white button mushrooms- 160 INR
  • Market price of 1 kg oyster mushrooms- 140 INR
  • Total price of white button mushroom yield in one cycle- 12,80,000 to 15,00,000 INR
  • Total price of oyster mushroom yield in one cycle- 11,20,000 to 14,00,000 INR
Profit margin of white button mushrooms in one cycle- 5,00,000 INR to 6,50,000 INR

Profit margin of oyster mushrooms in one cycle- 4,20,000 INR to 5,50,000 INR

What are dry mushrooms?

Dry mushrooms are dried fresh mushrooms. 

Dried mushrooms remain safe for a very long because absence of moisture. Moisture produce fungus on the mushrooms that's why you can use fresh mushrooms for few days only. 

Fresh mushrooms become one tenth after dried. It's market cost is 10 times higher than the fresh mushrooms. 

Mushroom farming in India

Since 2014-15, India's annual production of mushrooms increased by 30 times till 2019. According to a national survey, possibly this growth will be 50 times greater till 2023. 
Currently, Punjab holds the crown of maximum production of mushrooms which is almost 48% of total mushroom production in India. 
Almost 85 to 90% of mushrooms in India, produce by Himachal Pradesh, Haryana, and Punjab. Himachal produces more than 15% of total mushrooms in India. The second-largest producer of mushrooms is Haryana which produces 25% mushrooms of total production in India.
Oyster mushrooms are in huge demand in western Indian states, especially in Maharashtra. Here, the market cost of mushrooms is between 120 INR/kg to 1200 INR/kg.
Indian central government provides a 40% subsidy on mushroom cultivation which is a good initiative for the near future.
Mushroom farming in India, attracting the farmers because of its business structure. It is easy and people can start it as a side business which not require larger lands and manpower with large investment. Its a profitable business in India, which provide 1.5 times the return of investment if everything goes well.
The marketing of mushrooms is not a big concern in 2021, because it is in heavy demand. 
 There is a huge scope of mushroom in India because it just started to increase exponentially. People have a chance to get in this business with full awareness and information of the mushroom farming process.


  • Make sure that even a single ray of sunlight can't penetrate your house.
  • Neither use less gypsum in compost nor much. 
  • Don't use water till the sprout.
  • Maintain dark inside the house properly  
  • Maintain temperature inside the house. 
  • don't use the same compost with modifications for next cycle.
  • Don't use water in much quantity. 
  • Spawn should be good quality. 
  • If you are not using spawn then put them in cold place.
  • Don't touch mushrooms many times.
  • Don't expect immediate profit from the model. 

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