BUTTON MUSHROOM (2024)

BUTTON MUSHROOM

1.INTRODUCTION

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

2.OBJECTIVE

The main objective of the exerciseis to present a small scale viable bankable model production unit through adoptionof appropriate technology, utilization of resources and suitable marketstrategy.

3.BACKGROUND

3.1 Origin

Cultivation of button mushrooms (A.bisporus) started in the sixteenthcentury. However, on a commercial scale, the cultivation was initiated inEurope around 17^th Century. Many farms for production of buttonmushrooms were established and this variety still dominates the world productionand consumption. India, with its diverse agroclimate conditions and abundanceof agricultural wastes, has been producing mushrooms, mainly for the domesticmarket, for more than four decades. Commercialproduction picked up in the nineties and several hi-tech export oriented farmswere set up with foreign technology collaborations. But major share of mushroomproduction is still on small farms.

3.2 Botanical Description

The vegetative mycelium is composedof many inter-woven sepatate hyphae. The reproductive phase is initiated by theformation of small knob like swellings at different points of interwovenmycelial strands. These swellings increase in size and break through thesurface of the substratum as small balls constituting the button stage. A maturedbasidiocarp (fruit body) is whitish in colour and consists of thick short stipewith an annulus. The stipe supports the pileus which appears as a hat likeexpansion. On the underside of the pileus, a number of radiating gills or lamellaare present which are pink when young but purple-brown when mature.

3.3 Production Status

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

3.4 Economic Importance

Mushrooms are highly proteinaceousand are used as food. The white button mushroom is sold as fresh mushroom or iscanned 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 medicinalproperties also. A high amount of retene is present in the button mushroomwhich is supposed to have an antagonistic effect on some forms of tumours.

4.MARKET ANALYSIS AND STRATEGY

4.1 Demand and Supply Patterns

White buttonmushrooms are grown all over the world and account for 35-45 % of the totalmushroom production. In India, large units with production capacities between2000 – 3000 tonnes / annum, have been set up mainly as export oriented units inthe southern, western and northern regions. A large number of small units withoutclimatic control equipment exist throughout India and function during theautumn and winter months only.

A big gap exists between the demandand supply position of white button mushrooms in the United States and Europeanmarket. India exports the highest quantity of the mushroom produced in thecountry to USA. Netherlands and China account for 60% of the export ofmushrooms. Germany is the largest importer and France and UK are largeproducers as well as consumers.

The demand for fresh mushroom isincreasing in the international market while that of preserved or cannedmushrooms is decreasing. The trend inexport of mushrooms (fresh and dried/preserved form) from India during theperiod 1999-2000 to 2001-2002 is depicted in the graphs below.

The possibilities of exporting freshmushrooms to the markets in Middle East, Europe and USA need to be explored. Europeis a very large producer of fresh button mushrooms as such only some exoticvarieties of mushrooms which are high priced can be exported to these countries.However, some inhibiting factors are high cost of transportation and absence ofproper pre-cooling techniques and storage facilities.

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

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

4.2 Import / Export Trends

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

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

exported from India during 2001 –02.

(Qty: tonnes; Value: Rs lakhs)

Source:APEDA, New Delhi

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

mushrooms exported from India during2001 – 02

(Qty: tonnes; Value: Rs lakhs)

Source:APEDA, New Delhi

The most important importers ofwhite 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 theirproduce to the American and European countries in the form of canned mushrooms.

4.3 Analysis and Future Strategy

Marketing of mushrooms in India isnot yet organized. It is the simple system of producers selling directly toretailer or even to the consumer. Wholesaledistributor is mostly missing. However, trade in the processed (canned anddried) is sizeable and organized. In other countries 10% of the total cost isearmarked for marketing.

Production of mushrooms, especiallyof the white button mushrooms, in India has gone up during recent years creatingmarketing problems. The market for processed foods has yet to develop in thecountry and basically fresh fruits and vegetables are preferred. Per capitaconsumption of mushrooms in India is hardly 5 g. as against over a kg. in developedcountries. There has not been any serious effort to promote the product and tostrengthen and expand the market in order to increase consumption. The marginalincrease in demand is for fresh mushrooms instead of dried/preserved mushrooms.Fresh mushrooms have very short shelf-life and therefore cannot be transportedto long distances without refrigerated transport facility. They are sold in themarkets in and around the production areas.

The cultivation of white buttonmushrooms throughout the year under controlled condition is restricted to a fewcommercial units and much of the production is under natural conditions duringthe winters. Majority of the growers in India do not have pasteurizationfacility and other sophisticated machinery/infrastructure for round the yearproduction of white button mushroom. As such, button mushroom is cultivated seasonally when climatic conditions arefavourable and production expenses are minimum. Many growers in Haryana,especially in Sonepat, Ambala and Hisar have revolutionized the cultivation ofwhite button mushroom by adopting very simple and cheap technology ofconstruction of mushroom houses (mud houses with thathched roofs). Seasonalgrowing of white button mushroom in Haryana and Punjab has many advantages likenearness to market, easy and cheap availability of raw material coupled withutilization of family labour. The growers in HP do not use compost prepared bylong method because pasteurized compost is readily available from mushroomprojects located at Solan and Palampur.

5.PRODUCTION TECHNOLOGY

5.1 Agro-climatic Requirements

In India, button mushrooms are grownseasonally and in environment controlled cropping houses. White button mushroomrequires 20-28⁰ C for vegetative growth (spawn run) and 12-18⁰C 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-westplains of India and for 8-10 months in a year on the hills. However, with theadvent of modern cultivation technology it is now possible to cultivate thismushroom anywhere in India.

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

5.2 Growing and Potential Belts

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

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..

5.4 Cultivation Technology

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

(i)Spawnproduction

(ii)Compostpreparation

(iii)Spawning

(iv)Spawnrunning

(v)Casing

(vi)Fruiting

5.4.1Spawn Production

Spawn is produced from fruitingculture / 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 foreignsources which give higher yield than Indian strains and the spawn is producedin the lab. The spawn should be of good quality in terms of flavour, textureand size apart from having potential for high yield and longer shelf life.

5.4.2Compost Preparation

The substrate on which buttonmushroom 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.ofmushroom, 220 g. of dry substrate materials are required. It is recommendedthat each ton of compost should contain 6.6 kg. nitrogen, 2.0 kg. phosphate and5.0 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 substrateshould be 25-30 : 1 at the time of staking and 16-17 : 1 in the case of finalcompost.

(A)Short Method of composting

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

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

(B)Long Method of composting

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

5.4.3Spawning

The process of mixing spawn withcompost is called spawning. The different methods followed for spawning aregiven below:

(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 latercovered with compost.

(ii)Surface Spawning: The spawn is evenly spread in thetop layer of the compost and then mixed to a depth of 3-5 cm. The top portionis covered with a thin layer of compost.

(iii)Layer Spawning: About 3-4 layers of spawn mixed withcompost are prepared which is again covered with a thin layer of compost likein surface spawning.

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

5.4.4Spawn Running

After the spawning process is over,the compost is filled in polythene bags(90x90 cm., 150 gauge thick having acapacity 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 fungalbodies grow out from the spawn and take about two weeks (12-14 days) tocolonise. The temperature maintained in cropping room is 23 ± 2⁰ C.Higher temperature is detrimental for growth of the spawn and any temperaturebelow than that specified for the purpose would result in slower spawn run. Therelative humidity should be around 90% and a higher than normal CO₂concentration would be beneficial.

5.4.5Casing

The compost beds aftercomplete spawn run should be covered with a layer of soil (casing) about 3-4cm. thick to induce fruiting. The casing material should be having highporosity, water holding capacity and the pH should range between 7-7.5. Peatmoss which is considered to be the best casing material is not available inIndia, as such the mixtures like garden loam soil and sand (4:1); decomposedcowdung and loam soil (1:1) and spent compost (2-3 years old); sand and limeare commonly used.

The casing soil before applicationshould be either pasteurized (at 66-70⁰ C for 7-8 hours), treatedwith formaldehyde (2%), formaldehyde (2%) and bavistin (75 ppm.) or steamsterilized. The treatment needs to be done at least 15 days before the materialis used for casing. After casing is done the temperature of the room is againmaintained at 23-28⁰ C and relative humidity of 85-90% for another8-10 days. Low CO₂ concentration is favourable for reproductivegrowth at this stage.

5.4.6Fruiting

Under favourable environmentalconditions viz. temperature (initially 23 ± 2⁰ C for about a weekand then 16 ± 2⁰ C ), moisture (2-3 light sprays per day for moisteningthe casing layer), humidity( above 85%), proper ventilation and CO₂concentration (0.08-0.15 %) the fruit body initials which appear in the form ofpin heads start growing and gradually develop into button stage.

5.5 Pest & Diseases 

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

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

Professional help and extensionadvice will have to sought by the entrepreneur to adopt appropriate and timely controlmeasures against pests & diseases.

5.6 Harvesting and Yield

Harvesting is done at button stageand 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 beharvested by light twisting without disturbing the casing soil. Once the harvesting is complete, the gaps in thebeds should be filled with fresh sterilized casing material and then watered.

About 10-14 kg. fresh mushrooms per100 kg. fresh compost can be obtained in two months crop. Short method used forpreparation of compost under natural conditions gives more yield (15-20 kg. per100 kg. compost).

6.POST HARVEST MANAGEMENT

6.1 Packing and Storage

(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 inducewhiteness. After removing excess water these are packed in perforated poly bagseach containing around 250-500 g. of mushrooms. They can be stored in polythenebags at 4-5⁰ C for a short period of 3-4 days.

The mushrooms are usually packed inunlabelled simple polythene or polypropylene for retail sale. Bulk packagingdoes not exist. In developed countries, modified atmosphere packaging (MAP) andcontrolled atmosphere packaging (CAP) are in vogue.

(B)Long Term Storage

White button mushrooms are notusually dried by common procedures used in case of oyster, paddy and sh*takemushrooms. Canning is the most popular method of preserving the white buttonmushrooms and sizeable quantity of canned produce are exported to internationalmarkets. Besides that, freeze drying, IQF and pickling are also practiced bysome units.

7.SOURCES OF TECHNOLOGY

(i)NationalCentre for Mushroom, Chambaghat, Solan, Himachal Pradesh-173213, [Tel: (01792) 30451,30767]

8.ECONOMICS OF A SMALL SCALE MODEL

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

Costs & Returns

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

(Rs. In Lakhs)

8.3Themajor components of the model are:

·Costof acquiring land and its development (Rs.5.15 lakhs): The land would have to be acquired in areaswell connected to urban markets. On anaverage the cost of land might be put at Rs.3 lakhs per acre.

·Costof levelling the site (including fencing etc.) would be Rs.0.15 lakhs and costof putting up guard rooms would be Rs.50 thousand.

·Building(Rs.44.96 lakhs): The estimated cost ofthis component works out to around Rs.45 lakhs, major item being growing roomat the cost of Rs.25.92 lakhs.

·Plant& Machinery (Rs.47.00 lakhs): Thecost of equipping the production unit works out to Rs.30 lakhs, that of compostand casing unit to Rs.7 lakhs and that of installing canning facilities, spawnLab and other equipments to Rs.10 lakhs.

·MiscellaneousFixed Assets (Rs.0.75 lakhs): This isthe estimated cost of building up a communication system and furnishing.

·Pre-operativeExpenses (Rs.4.25 lakhs): These includeprofessional charges, administrative expenses and other start up expenses.

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

Source Rs. Lakhs

Farmer’sshare 53.50

Capitalsubsidy 21.40

Termloan 32.10

Total 107.00

8.4Returns from the Project: AnnexureII gives dataon production cost and profitability. Theyield from the Unit is estimated at 200 tonnes per annum. Valued at Rs.24,000 per tonne, the annualgross return would come to Rs.48 lakhs.

Financial Analysis:

8.5Theprojected balance sheet of the model may be seen at Annexure III while AnnexureIV presents a cash flow statement.

8.6Annexure Vbrings out the project profit and loss account over a 10 year period. It would be seen that after accounting forall 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 10year period from Rs.20.70 lakhs in the first year to Rs.16.10 lakhs in thefinal year.

Term Loan and Repayment:

8.7The entrepreneur would have to seek a term loan of Rs.32.10lakhs. The repayment terms have beenworked out at Annexure VI with a moratorium of 8 months and 11 half yearlyinstallments of Rs.2.92 lakhs each. Theinterest rate has been put at 12%. Theentrepreneur, however, would have to negotiate the interest rate with hisBank. The repayment schedule ispresented in Annexure VI-A.

8.8Depreciation calculations are given in AnnexureVII.

8.9Viabilitycalculations are presented in Annexure VIII. The BCRworks out to 1.3 and IRR (Pre-tax)to 26.4.

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

8.11Thebreak-even analysis (AnnexureXI) indicates that the project would break-even in year 4. At this point fixed cost would work out to32.1% of gross sales.