Mushroom Processing Project Report



You need to download the mushroom processing project report to explore all the major details about startup up. If you have a plan to start farming related business that costs low investment and yields more profits, then here is an opportunity for you. A mushroom growing business can generate good income return in the initial phase of your setup itself and you need to invest low start-up capital expenditure.

The mushroom industry worldwide is expected to reach Rs 3.98 lakh crores in the upcoming years and it will increase mushroom consumption among people for varied reasons. The major mushroom producers are the United States, China, India, Netherlands, Italy, and many others. India and other developing countries are into mushroom cultivation and farming for sustainable small-scale start-ups.

Mushroom cultivation is a very interesting agriculture start-up that can yield very high profits. It requires very few resources too. To get the benefits of growing mushrooms you need to write an effective mushroom processing project report. This will work as a map to help you in difficult decisions. It provides you with the first step to start and then gives you instructions to establish your business.

Mushroom Processing Project Report

You can download the mushroom project report nabard by clicking on the product and adding it to the cart. You will have to make the payment and then we will provide you access to download the project report. You will also get a download link in your e-mail. This project report will help you from starting of the setup and assist you in taking wise decisions in creating your business plan.

Mushroom Yields in India

Mushroom species show diverse results. Some produce more yield and some give less. Mushroom produce has a total of 10 to 15 kg output per square foot. If you plan to grow mushrooms on 250 square feet of land you can estimate a total harvest of 2500 to 3750 kg of mushrooms. In India, popular species of mushroom is the oyster mushroom which yields 12 kg mushroom per square foot. The total yield per 250 square feet is 3000 kg. Button mushrooms on the other hand can be sold at Rs 120 to Rs 150 per kg. The oyster mushroom costs Rs 150 per kg.

How to Start a Mushroom Farming Business in India?

Mushroom is significantly used as a food source and for therapeutic properties. Exporting mushrooms is increasing these days as it has high demand in foreign countries. You can here learn how to establish a mushroom processing business in India.

Choose the right location

Mushroom production does not involve large land space. You can start this business with the land of 250 square feet itself. It will help you yield 3000 kg of mushroom being sold at Rs 150 per kg. You can generate 5000 kg of mushrooms in a week. It is a small-scale business, and you can make good money in a few weeks itself. You can take a tiny building for rent and see your company growing.

Gain Experience

Mushroom processing involves research and practice. You need to study technology and science for cultivating mushrooms and can undergo online courses related to mushroom cultivation.

Spawn Collection

You need to obtain mushroom spawns that are popularly known as eggs from the local market. You may use a sterile culture to create spawns. In the long run, you can make it less expensive.

Raw Materials Requirement

You need to use buckets with holes, or disposable plastic sacks on the edges to let the mushroom sprout for the growth of fungi. You can buy the substrate that can be straw or wood chips.

Food For Mushrooms

Mushroom Cultivation is a circular economy part in which waste items help you to generate income. Growing substrate for mushrooms is a by-product of legume or grain production. The mushroom grows on sawdust and wood pallets. You need organic softwood wood chips, fuel pellets, and soy hulls so that substrate can be built, and it is most preferred by mushrooms.

In a biodegradable bag, you need to combine these ingredients and add water to achieve the required moisture content.

Mushroom Processing

Mushrooms can grow both outdoors and indoors.

Indoor Cultivation of Mushroom

Indoor growing of mushrooms makes it necessary to have some technical expertise, financial investment, and prior thoughts. To kill the mould or germs the growth media is placed in a sterilizer and it can be a large drum size. You need to allow the substrate to sterilize for a day at least.

The heated substrate is further allowed to cool to a temperature of 95 degrees Celcius. It may take a couple of days. The flow hood kind of blower is used to circulate air through HEPA which is the highly efficient particulate Air filter. It is used to remove contamination from air in the bags.

To use flow hood, you need to turn it and leave for around 30 minutes. You also have to place scoops of mushroom mycelium into the sterilized bags that substrate. Mycelium will start eating substrate.

The sterilized substrate is covered in a grit layer and this speeds up mycelium colonization time. You need to combine grain with the substrate. These bags will produce mushrooms in the next two months. The incubation bags are moved to the incubation room. You need to maintain the temperature of 21 to 22 degrees Celcius in the room. This allows mycelium to pass through the substrate and it can start consuming it.

When the mycelium colonizes the bags, it begins to turn white and in two weeks, mushrooms get ready. The bags are moved from the incubation room to fruiting chamber and it requires 4 items there. They are:

  • High Humidity Level.
  • Temperature falling to a certain range.
  • Lights have specific wavelengths.
  • Low level of carbon dioxide.

Indoor cultivation also requires the bag’s face to be pierced with a small hole. It allows mycelium and substrate to expose to fresh air and humidity. The mushroom then starts expanding.

This will provide you with a fresh lovely bouquet of mushrooms in a few days.

Log Cultivation

It is a labor-intensive technique to cultivate mushrooms and is time-consuming too. To start you first need to locate logs and get spawns from a tree. When the season of growing mushrooms arrives, these logs are inoculated with the spores of mushrooms and sawdust mixture.

In the weather of cold rain followed by sunshine, the logs help to sprout mushrooms. In the next two months, the mushrooms will be ready and you can transport them to the store shelves and serve them at home

Types of Mushrooms

Different mushroom species have a different price so you need to figure out which category of mushroom you would like to grow seeing your budget and sales expectation as per market demand. You can grow mushrooms that yield good profits and are simple to grow. Mushrooms can also be selected for processing seeing their medical properties.

  • Button Mushrooms
  • Paddy Straw Mushrooms
  • Exotic Mushrooms

Handling and Care of Mushrooms

In a small-scale mushroom business, you need to handle mushrooms nicely and providing climate is critical. Mushrooms get injured quickly as they are sensitive. They should be handled properly throughout transportation and retailers displays.

Selling Mushrooms

The market for mushrooms is undersupplied. The price is high in the market and a large number of cultivators have dived into this startup. You can transport mushrooms in vehicles and sell them in the local market. You can also start your mushroom online store.

Mushrooms are grown in India

The mushrooms that are grown, cultivated, and eaten in India are the following.

  • Buttons are grown in India.
  • Oysters us grown in mother plains.
  • Straw is grown at a temperature that ranges between 35 to 45 degrees Celcius.

Licenses Required for Starting Mushroom Cultivation

Here are the licenses required for starting a mushroom business in India.

  • GST Registration
  • Trade License
  • FSSAI Registration

Analysis of Cost and Profit in Mushroom Processing

We are going to show you the profit margin of mushroom cultivation in India.

Button mushroom yield is 10 to 15 kilograms per square feet. The yield for 250 square feet of land is 2500 kilograms. In the market, the cost per kg is Rs 150. The total cost of mushrooms weight 2500 kilograms is Rs 3.5 lakh and the profit that you can generate from this cultivation is Rs 1,90,000 per year after deducting the total recurring cost.

Mushroom Processing Industry Growth

The mushroom industry in India is continuously growing at a fast pace and the majority of it is focused on growing white button mushrooms as it captures 75% of the entire market. After this the oyster mushrooms have scope, and they capture 16% of the market. Around 94,600 metric tons of mushrooms are cultivated in India annually.

It is estimated that there is a frequent rise in the demand for mushrooms in India. It is around 25% rising. The demand is tremendously increasing. The market demand for exotic mushrooms is also rising.

Market Research

Market research is the reason why every business succeeds or fails. You need to do market research before you invest in any business in India. To start a mushroom business whether it is again culture, farming, or any other, research is crucial. It is a large portion of this business. You must identify your target audience and understand the complete mushroom industry first. As a mushroom farmer, you should have a deep understanding of ins and outs of this business.

The demand, growth, products, top companies, etc must be researched by you. You must undergo a short course before starting mushroom cultivation in India.

Mushroom Processing Business Plan

To begin with mushroom business, you need a strong business plan for mushroom cultivation. A business plan is important because it will serve as a blueprint and help to start this business from scratch. You will be able to know the aim, cost, requirements etc.

A well-written business plan will approve your loan at the earliest. If you want to make good money from this business, you need to focus on the cultivation techniques of mushrooms and know the investment arrangement. You can decide on the investment only when you know the materials required to process mushrooms and complete the process related to it.

You can write a sound business plan that will help you avail government subsidies and yield high profits for you. The stronger your business plan more success it will show.

Also Read Article on NABARD Dairy and Farming Scheme 2022


You need to check out a few essential things before you start mushroom processing. Once you complete your market research, and take training, the next step would be to get your business registered. You can get to know about your target market and potential consumers.

People eagerly wait for their farm to work at full capacity and till then they market to customers. Preselling your product and attracting buyers can help you book your clients before the establishment of mushroom farm. When the potential buyers are ready, it will give you many advantages like strengthening your business plan and reducing risks.

Acquisition of Land

The most important step for every farming business is the land area cultivation. If you have your piece of land, to start your business, it will reduce your cost. Mushrooms grow well in a dark and wet environment and need less space. Thus, you can plan to grow mushrooms indoors and construct a shelter over an open field. You can also rent out a space for starting mushroom cultivation. It will cost you less.

The land space requirement depends on the yield you want to do annually. 500 square feet of land is enough for producing 5 tons of mushrooms annually. You should choose your location accordingly.


The workforce and equipment are the two important things required for calculations. Mushroom is bungi. Different varieties of mushrooms have different needs. You can select the variety first that you want to cultivate. You will then be able to make the list of equipment you will need. Fertilizers, casing, starter cultures, or compost are of utmost importance.

Mushroom farming is a low-maintenance business. It doesn’t require taking care of. The volume of producing mushrooms will be important so you need to have help hands to manage your farm.

Mushroom farming requires the following materials:

3 to 6 racks, Storage Drums, Sand, Thermo Hygrometer, 25 TO 30 Gunny bags, Vermi Compost, Polythene Bags, Hay or straw, and Mushroom culture.

How To Write Mushroom Processing Project Report

Once you shortlist your resources and their quantity, you can begin with mushroom cultivation. You need to first complete your training and research. It is time to write all important details in your mushroom production project report. You can also download our mushroom processing sample project report format and write your project report. You need not exactly copy the project report, but you will have to write your own seeing the important details we have mentioned. To make your task easier you can get personalized mushroom production project report for cultivating mushrooms as it will be customized as per your plans for this start up. It will offer you more chances of acceptance of bank loan applications as it is mandatory to submit a project report to the banker to avail bank loan facility.

Our project report includes all crucial details about this setup in the project report. You can know more about your potential clients, marketing strategies, target audience, and market research.

How much manpower is required FOR THE MUSHROOM processing business?

Since mushroom is a low maintenance business, you need not hire much labor. For one acre of land being utilized for mushroom cultivation, you will need 2 labor men who can check on irrigation, cultivation, and incubation of mushrooms.

Types of Mushroom Cultivation

There is a variety of mushrooms that can be cultivated in India. The majority of mushroom production is button or oyster mushroom, but paddy mushroom is also growing its demand. The consumption of exotic mushroom is also increasing market demand for mushroom of this category.

Button Mushroom

Button mushrooms are also called as agaricus bisporus. They are widely grown and consumed in a number of ways in India. It is a good source of selenium, potassium and phosphorous. Eating them is a good choice. It has a soaring demand and is grown organically for earning lucrative income.

Oyster Mushroom

Oyster mushroom is the second most consumed variety of mushroom. It is cultivated in many parts of India and is oyster like shape mushroom. It is exotic and is sold at premium. This mushroom as good flavor and is in high demand in restaurants and global chains of hotels. It is very easy to grow oyster mushroom and it can thrive on dry compost like wood shavings, paper sheds, coffee grounds etc.

Paddy Straw Mushroom

One of the most consumed variety of mushrooms is paddy straw. It is grown in South East Asia specifically. It requires very little investment and is highly profitable in nature. It is known as straw mushroom as it grows on a bed of soaked paddy straws. It takes around 15 days to cultivate paddy straw mushroom.

Shiitake Mushroom

Shiitake mushroom is a Japanese variety of mushroom. It is not just consumed in India but also in other parts of the world. It takes more effort to grow this variety of mushroom. You can grow it on sawdust or wood logs and you can produce them every month. This category of mushrooms has delicious flavor and is extremely healthy.

Milky Mushrooms

Milky mushrooms are known as Calocybe Indica. Being the oldest mushroom variety, they are in white colour and have a long shelf life than other mushrooms. You can store and consume them for long period of time. It is a power house of nutrition and you can spot them growing around the world. It can even grow in hot or humid condition and doesn’t need much investment.

Mushroom Processing Industry Profits

It is a highly profitable start up in farming sector. First mushroom farming doesn’t incur much expenses and this makes it cost effective business. Secondly, it has huge demand, and you can price them as per their variety. This makes it highly profitable. Mushroom cultivation is profitable in India. As an entrepreneur you can make more money in less time, and it is growing traditionally being a revenue generating business. It has high demand in the market of India as well as foreign market so you can export it and make more money.

Is Mushroom Cultivation Taxable in India?

Taxing mushroom cultivation is debatable. This issue is debated at the Income tax department of India. Since mushroom cultivation is based on fungus and is not a conventional crop so it does not come under agriculture income. In 2018, Hyderabad court gave an important statement in this context and said that mushroom cultivation is a natural process and so it can fall under agriculture income. Hence it is exempt from income tax. This judgement is significant, and this has given rise to mushroom processing industry in India.

Benefits Of Mushroom

People consume mushroom as a vegetable or food item because it has many benefits. Here are the benefits of mushroom in India.

  • It contains lot of protein and other important nutrients like Vitamin D.
  • Mushrooms help to build strong immunity system.
  • Mushrooms contain high nutritional value and so it prevents heart diseases.
  • Mushrooms also help to prevent breast cancer.
  • Mushrooms help to reduce weight.
  • Mushrooms are good in protein, vitamins and also fibers. Mushrooms benefit diabetic patients.
  • Mushroom contains Vitamin B2 and B3 and increase metabolism in humans.
  • Mushrooms are good in fiber and prevent stomach diseases.
  • Mushrooms are the best source of folic acid, and it helps in increasing haemoglobin level in humans.
Mushroom Processing States in India

Here is the list of the states which produce mushroom in the country.

  • Uttar Pradesh
  • Tamil Nadu
  • Punjab
  • Nagaland
  • Orissa
  • Himachal Pradesh
  • Tripura
  • Kerala
Different Mushroom Products That You Can Process

Raw mushroom can be used as a vegetable. Apart from this you can manufacture many more products and generate profits. There are manu end products that can be manufactured like:

  • Canned Mushroom
  • Dried Mushroom
  • Mushroom Slice
  • Sliced Mushroom
  • Pickled Mushroom
  • Mushroom Sauce
  • Mushroom Powder
Subsidy on Mushroom Processing

As per the National Horticulture Board mushroom farmers are given a subsidy if they cultivate mushroom on a land of more than 10 aces. State Government is supporting mushroom farming and thus they provide subsidy models for mushroom cultivation based on caste and plant type. For example, the government of Bihar gives upto 70% subsidy to mushroom cultivators who belong to general category.

Mushroom Cultivation Training and Program

Before you start writing mushroom processing project report you should thoroughly understand everything about this business. Different varieties involve different practices. Thus a few resources are available that you can choose to help you pick the most important knowledge about mushroom processing.

Environment Conditions for Processing Mushrooms

As mushroom grows in a specified temperature and requires special environmental conditions, so it can grow and become edible. Here is the list of conditions suitable for the growth of mushroom.

  • It requires least space and land thus it is of good importance for marginal land holders.
  • It grows independently of sunlight, fertility of soil and just feeds on organic matter.
  • Air space is also utilized to produce higher yield along with the land.
  • Mushrooms grow in winters and need low temperature when they grow.
  • It can be cultivated in a room, but you need to make sure that the moisture is available there. You can also buy carbonic chemical.
  • For a good, cultivated mushroom 20 to 30 degree celsius temperature is good.
  • The humidity level needs to be 70 degrees and you can keep a check on the room temperature.
Materials Required For Mushroom Processing

Mushroom is not just nutritional but also of medicinal importance. Mushroom cultivation has great potential for income generation. It can grow in low sunlight, fertile soil and feed on organic matter.

In addition to land air space is also useful. It requires material like:

  • Sprayers
  • Grass
  • Jute or coconut rope
  • Drum to boil straw
  • Hand Chopper
  • Plastic Sheets
Investment Required To Start Mushroom Processing

The investment depends on the scale of business. You need to initially invest Rs 1 to 2 Lakh in this business and enjoy profits. It doesn’t require any construction or major equipments. The invest varies as per scale and budget you carry for this venture.

You can grow it on a small scale or build a large-scale mushroom processing plant. You may buy land or get it on lease and care for mushrooms. You may also have to spend on pesticides. Buying seeds is another expense.

You can start a small-scale mushroom processing business in a budget of Rs 50,000. You will have to invest around Rs 2 to 10 lakh if you want to start this business on a large scale.

Mushroom Seeds Price and Place

The cost of mushroom seeds is Rs 95 for 1 kg seeds. It can reach up to Rs 120 per kg. The cost depends on the brand and quality of seeds. You need to first decide which type of mushroom you want to grow. Some other high-quality seeds for mushroom processing can cost even Rs 200. If you buy the seeds in bulk, you can get them at a bit low rate.

The best place to get the mushroom seeds is from government farmers and they may also be available in district office or in your blocks. Online also you can compare the price of mushroom seeds and then decide from where to buy them.

Mushroom Processing Bank Loan

These days government is supporting mushroom cultivation start up. You can get bank loan under government subsidy schemes. Young entrepreneurs are getting benefits from schemes like this. You can avail loan for investments and grow your business.

You will have to write mushroom processing project report and submit it to the banker so that they can give you bank loan. You will have to submit documents like Adhaar Card, Pan Card and bank details along with residence proof in the bank.

You will be able to avail a subsidy of 20 to 40% on every bag of mushroom.

Selling Mushrooms in India

Mushrooms have good demand everywhere in the country. You can sell them at various available places like Hotels, restaurants, groceries, super markets, malls, medicine companies etc. You can also export it to foreign countries.

Mushroom Processing Training

Mushroom is helping young entrepreneurs to get training and start this business. Along with the subsidy, the government provides free training for cultivating mushroom and you can plan this business better after you get trained. You can also do course for starting mushroom processing in India.

Sample Project Report Format for Mushroom Framing business

In our project report format, we cover technology details, its diagrams, flow chart etc. as and when required or deem fit to include. Also, prepare in-depth financial calculations which are necessary for the Investor/bank. 

Contents of Mushroom Project Report PDF
Sr. No. Particulars
1Project at a Glance
2Highlights of The Project
3General Information and Location
4Promoters Background
5Project Introduction
6Project Description
7Market Prospect
8Technological Process
9Quality Control and Standards
10Consumables, Power and Utility
11Installed Capacity
12Basis and Presumptions
13Project Cost Estimates and Means of Finance
14Economic Viability and Financial Analysis
15Estimated Cost of The Project
16Proposed Means of Finance
17Working Capital Estimates
18Cost and Profitability Estimates
19Projected Balance Sheet
20Projected Cash Flow Statement
21Debt-Service Coverage Ratio
22Break-Even Analysis
23Internal Rate of Return
24Term Loan Repayment Schedule
25Cost of Land and Building
26Cost of Plant and Machinery
27Miscellaneous Fixed Assets
28Preliminary and Pre-Operative Expenses
29Manpower Requirement & Cost
30Power and Utility
31Repair and Maintenance Cost
32Estimates of Income
33Interest on Working Capital
34Depreciation Schedule
35Permits and Business Licenses
36Important Steps to Start the Project
37Tips to Identify Suitable Project Location
Conclusion of mushroom processing project report

Now if you want to make things easy for you then you should definitely buy the mushroom processing project report from our website. You can also get it customized as we have experts who can design your project report as per your desire. You will get each and every information in detail like financial requirements, investment, budget, land, space, raw material etc. It will solve every purpose of your business plan and you will be able to get all related help about this business in the project report. It is mandatory to submit the project report in the bank for bank loan then why not buy a professional one.

Frequently Asked Questions On Mushroom Processing Project Report
Where can i get mushroom processing sample project report for bank loan pdf?

Well, you can explore the best mushroom cultivation project report PPT on our website and take help by checking out all the important details for your new business from it. It will serve you as a guide using which you can write your own mushroom cultivation industry project report and submit it to the bank to avail loan for your new venture.

What is the right mushroom farming project report format for bank loan?

We have clearly stated the right format for mushroom farming start up in our project report. You can check out the mushroom project report for bank loan details by downloading it after making a nominal payment to us. We have covered every important aspect of this venture in our report.

Can I download mushroom farming project report pdf in the format of excel or word file?

You can easily download mushroom cultivation project report ppt from our website in PDF Format and use it for writing your project report. If you want to get it in word or excel file. It is very simple to later convert the pdf to word or excel using free file converting tools.

Can I download mushroom farming project report and use it for bank loan under pmegp mudra and other government scheme?

The main objective of mushroom farming project report pdf is to highlight all important aspects of this business for your new set up and to provide sample format for preparing project reports for other purposes. However, according to your need, we will prepare customized mushroom project report pdf for your set up so that you can get loan from the bank under any scheme.

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