CHAPTER 1

INTRODUCTION

Mushrooms are the fruiting bodies of some members of a lower group of plants known
as fungi. The fungi are characterized by the absence of chlorophyll and
undifferentiated bodies except the spore bearing structures. The fruiting bodies,
mushrooms, are fleshy spore bearing structures of the fungi. They contain numerous
spores, functionally similar to seeds of the higher plants for propagation of fungi.
Mushrooms appearing after rains in various shapes, sizes and colour have fascinated
human being since time immemorial and were sure to draw the attention of humans
even when they were living as hunters and gatherers. Even though, man started
agriculture 10,000 years ago, the cultivation of mushrooms is a relatively new
phenomenon and has picked up across the globe only in the last century that has
witnessed newer innovations and applications. The Chinese were reportedly the first
to artificially cultivate tropical and sub-tropical mushrooms thousands of years back
but commercial production started in Europe with button mushrooms in caves during
16th and 17th centuries. The mushroom cultivation then made its way to the United
States.

The economic importance of mushroom lies primarily in their use as food for human
consumption. The exotic flavor, taste and fleshiness of mushroom have made it an
important delicacy in human diet. Mushroom is considered to be a complete, healthy
food and suitable for all age groups. Though, the nutritional value is determined by the
type, stage of development and other environmental conditions, mushrooms are rich
in proteins, dietary fiber, vitamins and minerals. They have insignificant lipid level
and high proportion of polyunsaturated fatty acids resulting in low calorific value. The
protein content, though varies greatly in different mushrooms, is usually high.
Mushrooms are an excellent source of vitamins especially C and B (Folic acid,
Riboflavin, Niacin and Thiamine) and minerals like potassium, sodium and
phosphorus. It also contains other essential minerals like Cu, Zn and Mg in traces.
Mushrooms are also known to have medicinal values as these have been shown to
promote immune function, boost health, lower risk of cancer inhibiting tumour growth
and support body’s detoxification mechanism. Mushroom, thus has great potential for
the production as quality food.

The productivity of mushroom is higher than any other crop. Food, nutritional and
medicinal values apart, mushroom growing can be an efficient means of waste disposal
mainly agricultural wastes, since it can use the wastes as medium of growth and thus
mushroom cultivation is considered as eco-friendly. Further, mushroom cultivation is
highly labour intensive which can help gainful employment to unemployed youths in
rural and semi-urban areas. The activity also requires comparatively less land area.

The potential of the mushroom crop is rated high on account of following reasons:-

 Availability of cheap and abundant raw material and labour.

 Appropriate technology for small and Hi-Tech growers.

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  Demand–supply gap in the world trade of mushroom.
 Fall in production in many European countries due to high labour cost.
 Proximity to Middle East, where market is growing.
 Domestic market is also growing which can absorb non-exportable surplus.

1.2Types of Mushrooms

Naturally, mushrooms are found in diverse agro-climatic conditions ranging from arid
to evergreen forest conditions. Worldwide more than 3000 mushrooms have been
identified as edible, of which 200types are reported to have been produced under
controlled conditions. However, not more than 60 varieties are being grown widely.
There are about a dozen varieties which are cultivated on commercial scale. India is
home to more than 300 varieties of mushrooms found in the wild.

The major mushroom varieties of commercial importance are Button (Agaricus

bisporus, A. bitorquis), Oyster–Dhingri (Pleurotus sp.), Paddy Straw (Volvariella
sp.), Shiitake (Lentinula edodes), Milky Mushroom (Calocybe indica), Winter
mushroom (Flammulina velutipes), Reishi (Ganoderma lucidum), Black Ear
(Auricularia sp.) etc. Morel (Morchella esculanta) is seasonally harvested from the
wild in north Himalayan states. In India, three types, namely button, oyster and straw
mushroom are extensively cultivated on commercial scale.

Button: It is most popular variety both in the domestic and export market and ranks
first in terms of production and consumption. It is grown both by seasonal growers in
low cost structures as well in environment controlled units. Both the production
systems viz., seasonal and controlled environment growing is in vogue throughout the
country. The button mushroom is grown throughout the country, with Punjab,
Haryana, UP, Uttrakhand, Himachal and Tamilnadu contributing significantly to the
national production.

Oyster: This mushroom, commonly called Dhingri, is suitable for the temperate, sub-
tropical and tropical regions of our country. The regions suitable for button mushroom
are equally suitable for this mushroom. This type of mushroom is generally dried and
exported. This has tremendous potential as it can be grown on a variety of substrates
under varied conditions. The production technology is relatively simple with low
production costs. India produces annually about 10000 tons of this mushroom. The
Oyster is widely cultivated in states of Orissa, Andhra, Karnataka, Maharashtra,
Madhya Pradesh, West Bengal and North-Eastern states. Punjab and Tamilnadu are
the leading producers of this type on commercial scale.

Paddy Straw: This variety is suitable for sub-tropical regions of the country. There
are more than 19 edible varieties of this species, of which cultivation methods of only
three species, have been developed. This mushroom is very popular for its taste and
flavor in the Eastern and Southern India, especially in the coastal region and
extensively cultivated in Orissa. It can be grown in temperate regions by maintaining

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temperature conditions. Its potential remains under exploited despite abundant
availability of paddy straw and highly suited environmental conditions.

Specialty Mushrooms: This group includes mushroom of various types which are
less common in a particular region or country. On this count, Oyster, Paddy Straw,
Shiitake, Black Ear, White Milky, Winter Mushrooms fall under this category. The
demand for these mushrooms, in recent years, has shown an upward tendon account
of its novelty and medicinal value, fetching high prices in the global market. The Indian
sub-continent is endowed with varied agro-climatic conditions for growing these
mushrooms.

Medicinal Mushrooms: Medicinal mushrooms have an established history of use

in the traditional oriental medicine. Many mushrooms especially belonging to the
genus Auricularia, Flammulina, Ganoderma, Grifola, Lentinula, Tremella etc. have
been found to possess medicinal properties. Ganoderma lucidum is the most popular
mushroom commercially used and traded in the world.

India, bestowed with varied agro-climatic conditions, has tremendous potential for
production of a variety of commercial edible and medicinal mushrooms. There is
increasing demand for quality products both in domestic and export markets.
Country’s domestic market will expand on account of changing food habits, rising
income and rapid urbanization. The world market has shown a significant growth in
recent years making it more attractive for Indian exports.

India with abundance of agricultural wastes, relatively cheap labour can thus be a
potential mushroom producer in the world.

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 CHAPTER 2

INTERNATIONAL PERSPECTIVE

2.1World Production of Mushrooms

The global mushroom production as per FAO Statistics was estimated to increase
from2.18 to 3.41 million tons over a period of 1997-2007. Mushrooms in FAO database
have been defined as those inter: boletus, button (Agaricusspp.), morels and tubers.
Since there was an increase of about56% in world mushroom production in the last
decade, the guesstimates can be put on current production to be around 4 million tons.
The country-wise production is as under:-

Table: World production of mushrooms (Metric Tons)

S.no. Country 1997 2007
1 China 562194 1568523
2 USA 366810 359630
3 Netherlands 240000 240000
4 Poland 100000 160000
5 Spain 81304 140000
6 France 173000 125000
7 Italy 57646 85900
8 Ireland 57800 75000
9 Canada 68020 73257
10 UK 107359 72000
11 Japan 74782 67000
12 Germany 60000 55000
13 Indonesia 19000 48247
14 Indonesia 19000 48247
15 India 9000 48000**
16 Belgium NA 43000
17 Australia 35485 42739
18 Korea 13181 28764
19 Iran 10000 28000
20 Hungary 13559 21200
21 Vietnam 10000 18000
22 Denmark 8766 11000
23 Thailand 9000 10000
24 Israel 1260 9500
25 South Africa 7406 9395
26 New Zealand 7500 8500
27 Switzerland 7239 7440
28 Other countries 85911 59297
Total Production 2186222 3414392
Source: Table 50, World mushroom & truffles: Production, 1961-2007; United
Nations, FAO, FAO Stat (8/28/2009)

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** Current mushroom production of India is estimated at about 1.25 lakh metric tons

Mushroom Production in the

world
1 China 2 USA 3 Netherlands 4 Poland
5 Spain 6 France 7 Italy 8 INDIA
9 Ireland 10 Canada 11 Japan 12 Others

2% 2% 12%
2%
3%
46%
4% 3%

4% 10%
5%
7%

China, USA, Netherlands, Poland and Spain are the leading producers and three major
mushroom producing countries as per FAO data viz., China, USA, and Netherlands
account for more than 60% of the world production. India’s production in 2010 was
1.13 lakh metric ton, which is about 3% of the world’s mushroom production.

China was the leading producer of mushrooms accounting for 46% share of the world
production, which is about half of the world mushroom production. The mushroom
production figures quoted by Chinese are at much higher scale, probably due to the
fact that the data by the Chinese Association of Edible Fungi includes all the
mushrooms. Resultantly, the gap between FAO Stat and Chinese Association of Edible
Fungi data is enormous. This underlines the contribution of other edible mushrooms/
medicinal mushrooms, even if the figures may seem exaggerated. China consumes
95% of domestic mushroom production locally with less than 5% of its total domestic
production available for export and about half of it is to Asian Countries.

Button mushroom accounts for the major share of production in United States and
Europe, whereas, in Asian countries, the scenario is different and other species are also
cultivated for commercial production.

2.2 Consumption Pattern

Global mushroom consumption for 1996-97 showed that G-6 countries continued to
lead in consumption with USA (30%), Germany (17%), UK and France (11%each), Italy
(10%) and Canada (6%). The per capita consumption is highest in Netherlands (11.62
Kg) followed by Ireland (6.10Kg), Belgium (4.46). Majority of European countries has
annual consumption above 3 kg/person.USA has average consumption of 1.49kg.

An analysis of the consumption pattern reveals that fresh mushroom is preferred over
the preserved (canned) mushrooms in all western countries except for Germany,
where share of fresh and canned mushrooms is almost same.

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In China, 95% of mushroom production is consumed in domestic market, thus the
consumption per capita is over 10 kg/person/year. The consumption level in China
thus is significantly higher than major consumers in US and EU countries.

During the 90s, mushroom consumption in India was estimated at 20-25

g/capita/annum. India has traditionally a low rate of mushroom consumption.
Considering that we produce about 1.25 lakh tons and export about 60-70% of it, our
current consumption is estimated at 40 g/person/year, very less compared to other
countries.

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 CHAPTER3

GROWTH OF MUSHROOM INDUSTRY IN INDIA

3.1 Rise and importance of Mushroom

Mushroom production in the country started as an experimental initiative in Solan in early

sixties. With the creation of research base and necessary infrastructure at Solan, a small
beginning was made with the support of progressive farmers around the centre. Subsequently,
in mid 60s and early 70s, commercial farms were established in Kasauli, Chail and Srinagar.
The success of pioneering commercial farms motivated other enterprising farmers to grow
button mushroom under natural climatic conditions.

Since the mid-seventies, mushroom is emerging as an important commercial crop in India for
both domestic and foreign markets. The industry is gaining prominence on account of three
main factors: ensuring higher/alternative incomes to rural people, creating more employment
and earning foreign exchange. Mushroom cultivation has added advantage of efficient use of
agricultural wastes as growing medium.

Initially, mushroom cultivation was restricted to button variety, however situation has
changed considerably in the last decade as wide range of mushrooms like Oyster, Milky,
Shiitake and other specialty mushrooms like Reishi are also finding favour with the growers.
The economic reforms introduced since 1991 and the vastly liberalized foreign trade policy
since then, have given a great fillip to this activity. Consequent upon liberalization, the
Government of India identified mushroom as a sunrise industry and accorded it 100 percent
export-oriented status. Growing domestic and global demand coupled with relatively much
higher returns per unit of land than other agricultural activities has prompted farmers and
entrepreneurs to take up this activity. The rapid urbanization, increasing purchasing power
and changing dietary habits have also helped in higher demand for mushroom.

3.2 State-wise Production

There has been significant increase in production of mushrooms in the last few years,
especially of the white button mushroom, in India. Based on the data available with the
Departments of Agriculture/Horticulture of the states or as reported in websites of
commercial units, production for the year 2010 is given below:-

State-wise mushroom production in India (2010) (Tons)

Sr. State Button Oyster Milky Other Total
No Mushroom Mushroom Mushroom Mushrooms Production

1. Andhra 2,992 15 15 0 3,022

Pradesh
2. Arunachal 20 5 0 1 26
Pradesh
3. Assam 20 100 5 0 125
4. Bihar 400 80 0 0 480
5. Chhattisgarh 0 50 0 0 50
6. Goa 500 20 0 0 520
7. Gujarat 0 5 0 0 5
8. Haryana 7175 0 3 0 7178
9. Himachal 5864 110 17 2 5993**
Pradesh

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 10. Jammu & 565 15 0 0 580
Kashmir
11 Jharkhand 200 20 0 0 220
12. Karnataka 0 15 10 0 25
13. Kerala 0 500 300 0 800
14. Maharashtra 2725 200 50 0 2975
15. Madhya 10 5 0 0 15
Pradesh
16 Manipur 0 10 0 50 60
17. Meghalaya 25 2 0 0 27
18. Mizoram 0 50 0 0 50
19. Nagaland 0 75 0 250 325
20. Orissa 36 810 0 5000 5846
21 Punjab 58000 2000 0 0 60000
22. Rajasthan 100 10 0 10 120
23. Sikkim 1 2 0 0 3
24. Tamil Nadu 4000 2000 500 6 6500
25. Tripura 0 100 0 0 100
26. Uttrakhand 8000 0 0 0 8000
27. Uttar 7000 0 0 0 7000
Pradesh
28. West Bengal 50 50 0 0 100
UTs
1. A&N Islands 0 100 0 0 100
2. Chandigarh 0 0 0 0 0
3. D&NHaveli 0 0 0 0 0
4. Daman & Diu 0 0 0 0 0
5. Delhi 3000 50 20 0 3070
6. Lakshadweep 0 0 0 0 0
7. Puducherry 0 0 0 0 0
TOTAL 100683 6399 920 5313 113315

Source: RMCU, DMR, Solan (2010)

** Production during 2014-15 estimated at 8035 Tons

The country’s production in 2010 was 1.13 lakh metric tons, of which button mushroom
accounted for 89% of the total production, followed by Oyster (6%), milky (1%) and others
(4%). Punjab, Uttrakhand, Haryana, Uttar Pradesh and Tamilnadu are the leading producers
of the mushroom in the country. The five major mushroom producing states account for more
than 78% of the total production, however, share of Punjab itself is 53% which is more than
half of the national mushroom production. Himachal Pradesh, ranked sixth, has also an
important place. As per the current estimate, the annual production is pegged at 1.25 lakh tons
with button mushroom accounting for 85% and balance contributed by Oyster, Milky and
other specialty mushrooms.

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 Major Mushroom Producing
States
1 Punjab 2 U'khand 3 Haryana
4 UP 5 TN 6 HP
7 Delhi 8 Andhra Pradesh 9 Maharashtra
10 Kerala 11 Others
3% 2% 1% 8%
5% 3%
6% 53%
6%
6%
7%

3.3 Production and Productivity Indicators

In India, with a small beginning in 70s, the mushroom production has picked up substantially
both under seasonal farming as well as high-tech cultivation. The growth rate has been
significant both in terms of production as well as productivity. In seventies and eighties button
mushroom was grown as a seasonal crop in hills, but with the development of the technologies
for environmental control and increased understanding of the cropping systems, mushroom
production was taken up as a commercial activity. The production shot up from 5000 ton in
1970 to over 20,000 ton in 1990 registering a four-fold increase. In next phase from 1990 till
2011 the production has risen to 1,20,000 ton.

In terms of productivityi.e. mushroom in kg per 100 kg of compost, with initial productivity of

5-6 kg in 70s, it rose to 16 kg by 1990, registering a 200% increase by 90s. The productivity
enhanced to 20 kg by 2005, but thereafter there has not been any significant improvement.

3.4Production Systems

In India, the mushroom production systems are of mixed type i.e. both seasonal farming as
well as high-tech industry. Button, oyster, milky and paddy straw mushroom is cultivated in
different parts of the country as per temperature profile in different seasons. Two – three
crops of button mushroom are grown seasonally in temperate regions with minor adjustments
of temperature in the growing rooms, while one crop of button mushroom is raised in North-
western plains of India seasonally. Oyster, paddy straw and milky mushrooms are grown
seasonally in the tropical/sub-tropical areas from April to October, in the states of Orissa,
Maharashtra, Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and North Eastern region of
India.

3.41Mushroom under Organised Sector

In the background of groundwork done and potential of mushrooms as a high value crop in
the domestic as well international market, the Indian Government launched a plan to
encourage entrepreneurs and business houses to set up high technology farms as industrial
ventures. The plan called 100% Export Oriented Units was proposed to provide the benefits
and incentives to investors viz. Industrial plots on concessional lease; Duty free import of
equipments; Easy Exports; Exemption from payment of corporate tax etc.

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The policy initiatives triggered a good response from entrepreneurs/investors and several
firms established integrated units at different locations by imported technologies. The
improved strains of mushrooms along with production technologies were imported. Majority
of these units were based on Dutch technology. EOUs thus established had a marked impact
on annual mushroom production and average productivity.

Many commercial units are located in different regions of our country and produce quality
mushrooms for domestic and export market round the year. The present production of white
button mushroom is about 85% of the total production of mushrooms in the country.

Major White Button Mushroom Units in India

S. Unit Location Production Status

No Capacity (TPA)
1 Agro-Dutch Lalru (Punjab) 40000 EOU
2 Himalaya PaontaSahib(HP) 2000 EOU/Domestic
International IDAR (Guj.) 10000 EOU
3 Inventa Foods Hyderabad 4000 EOU
4 Flex Foods Dehradun 2500 EOU/Domestic
5 INKAA Foods Nalagarh(HP) 1500 Domestic
6 Balaji Baramati 1500 Domestic
Mushrooms (Mah.)
7 Weikfield Pune (Mah.) 1500 Domestic
Mushrooms
TPA: Tons per annum

3.42Mushroom under unorganized sector (Seasonal Farming)

A large number of farmers, within the unorganized sector are growing different types of
mushrooms throughout the country, major types being button, Oyster and Paddy straw.
Mushroom species grown in particular region depends upon the climate mainly ambient
temperature. Majority of the growers operate under low input, low cost cultivation practices.
The productivity and product quality under such conditions are below the desired level. These
seasonal farms account for only a small fraction of button mushroom production but account
for virtually entire Oyster and Paddy Straw mushroom in India.

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 CHAPTER 4

DEVELOPMENT OF MUSHROOM CULTIVATION IN HP

4.1 A Peep into Mushroom History of HP

Mushroom production in India is of recent origin as it was in the 1961 when ICAR
funded a scheme on button mushroom cultivation technology at Solan under UNDP
project. The production of mushroom started during the early sixties on an
experimental basis by Dr.E.F.K.Mantel, an Agricultural Scientist under FAO
Programme. The pioneering research work at the Agriculture College campus of HP
Agricultural University laid a firm foundation of the mushroom research in India. The
Agriculture College, Solan took the lead and provided initial know-how to Shri
Amarinder Singh as a pioneer grower to venture in the field. The raw materials used
were wheat straw, spent brewer’s grain from Solan Brewery, wheat bran, super
phosphate, murate of potash and urea. The spawn was provided by the College and
spent mushroom compost, sand, saw dust and loamy soil formed the casings. Around
early seventies, some growers of Chail and Kasauli produced few hundred Kilograms
of mushroom per day, which was canned by TEGS Mushroom.

National Center for Mushroom Research & Training was established in 1983 at the
research centre at Solan, under the aegis of ICAR which was later named as National
Research Centre in 1997 and upgraded as Directorate of Mushroom Research in
December 2008. The Directorate, since then, has been undertaking coordinated
projects on various aspects of mushroom technology for Button and other mushrooms
in collaboration with number of other institutions and State Agricultural Universities.

4.2. Trends – Units and Production

Himachal Pradesh has emerged as a major player in mushroom cultivation where

small and marginal farmer/growers, co-operative growers’ societies, big farmers and
some corporate organisations are engaged in production. There has been a steady
increase in the area and growers under mushroom cultivation in the state. Since, it is
an ideal state for development of mushroom industry, majority of farmers/growers
have taken up seasonal farming. In addition, several commercial units of medium and
large scale have also come up in Himachal Pradesh.

4.3.District-wise trends in Production

The major mushroom growing districts are Solan, Shimla, Kangra, Mandi, Kullu and
Sirmaur. Due to improved quality of compost, better market facilities, other
infrastructure, small and medium sized units have been established around Shimla
and Solan. Solan district has emerged as the largest producer of the mushroom in the
state with more than 190 units engaged in mushroom cultivation and contributing
more than 50% of the state’s production. Shimla, Bilaspur and Sirmaur districts have
also good number of registered growers. These districts, together, contribute 90% of
the state’s production. The productivity has also improved from about 5kg in early 70s
to 16 kg per 100 kg of compost. Solan on account of its significant contribution to the
mushroom industry was declared “Mushroom City of India” in 1997.

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The Dept. of Horticulture, GoHP has three zonal units for promotion/development of
mushroom cultivation in the state viz. Solan (covering Solan, Shimla, Sirmaur,
Bilaspur and Kinnaur districts), Palampur (covering Kangra, Hamirpur, Una and
Chamba districts) and Bajaura (covering Kullu, Mandi and Lahaul &Spiti districts).
The zone-wise mushroom production for the last three financial years is given below:-

Mushroom Production during last 3 years

(Tons)
Zone 2012-13 2013-14 2014-15

Solan 5815.38 4639.73 6168.25

Palampur 1077.62 1422.98 1607.97
Bajaura 368.50 250.00 259.00
State Total 7261.50 6312.71 8035.22

4.4Trends in Hi-Tech Mushroom Cultivation

Himachal Pradesh has two major commercial units namely Himalaya International,
Paonta Sahib and INKAA Foods, Nalagarh, both meeting domestic demand and
former partially catering to the world market. In recent years, new units like Vikas
Mushrooms has been established in Solan and surrounding areas.

4.5Mushroom Growers’ Association

The Mushroom Grower’s Association of India, a society registered under the Central
Societies Registration Act, 1980 is based in Solan with units in 17 major mushroom
producing states with ex Directors of NCMR rendering their services as National
Advisors.

The Association is creating awareness in mushroom production technology among

growers as well as its usefulness among consumers. Besides this, it assists the small
growers to avail the best extension services and market for their produce. It also
maintains liaison with the Research Institutions like NCMR, Dr. YSP University of
Horticulture and Forestry to undertake research and developmental projects of topical
nature. It also publishes relevant literature for the use of growers. The Association
Units in different states are organizing On-site training programmes in the states with
the support of progressive mushroom growers and also arranges exposure visits.

4.6 Potential

It is evident from the preceding chapters that there exists a tremendous potential for
production of mushroom in the state. The increasing demand of mushroom within the
state as well as outside the state including export, offers vast opportunities for
enterprising growers to take up cultivation on a large scale. Though the production
data for previous years does not indicate a specific trend, there has been significant
growth in production. This has been despite the fact that the activity has been
consistently taken up in only select few districts. Based on the agro- climate mapping
of the state, the different districts offer the potential for growing 2-3 crops per year,
under natural seasonal conditions as given below:-

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 S.No. District Climate zone Potential Crops / per
year (no)
1 Bilaspur Low Hill One crop
2 Chamba Mid / High hill Two- three crops
3 Hamirpur Low hill One crop
4 Kangra Low/Mid/High Two- three crops
5 Kinnaur Cold & dry hill One crop
6 Kullu Low/Mid/High Two- three crops
7 Lahaul & Spiti Cold & dry hill Two- three crops
8 Mandi Low/Mid/High Two- three crops
9 Shimla Low/Mid/High Two- three crops
10 Sirmaur Low/Mid/High Two- three crops
11 Solan Low/Mid Two- three crops
12 Una Low Hill One crop

4.7Credit Potential

The Potential Credit Plans prepared for the year 2016-17 has assessed the credit
requirements of Rs. 10.51 crore for mushroom cultivation in the State. The district-
wise credit potential is as under :-

(Rs. Lakh)
S.No. District Credit Projections 2016-17

1 Bilaspur 490.89
2 Chamba 8.55
3 Hamirpur 71.42
4 Kangra 242.28
5 Kinnaur 48.60
6 Kullu -
7 Lahaul&Spiti -
8 Mandi 4.05
9 Shimla 9.72
10 Sirmaur -
11 Solan 134.40
12 Una 41.25
Total 1051.16

The banks can exploit this opportunity for increasing agriculture portfolio in the
State.

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 CHAPTER 5

ECONOMICS OF BUTTON MUSHROOM & POTENTIAL

There are number of varieties of mushrooms for which cultivation practices have been
developed by the Research Centers, the pioneer efforts made by the Directorate of
Mushroom Research. However, the State of Himachal Pradesh is ideally suitable for
cultivation of temperate mushrooms and considering the market preference and
predominant share, the economics of button mushroom has been considered.

Ideally, for round the year cultivation of mushrooms employing environmental

controlled conditions, a medium sized plant would require the different components:
Spawn unit, Compost unit, Cropping unit, Post-Harvest unit etc. Depending upon the
scale of production, the project need to be formulated, however, as the majority of
growers in the state are either growing crop only seasonally or on a small scale, two
models are being discussed in detail. Cultivators are sourcing the compost and spawn
from the existing infrastructure created under the public or private sector.

Proposed Models

In view of the fact that the majority of entrepreneurs are involved in production of
mushroom in the state, two models viz., seasonal cultivation of mushroom and round
the year production under environmental controlled conditions on a small scale (with
production of 20 TPA) are proposed.

Unit Cost and Financials

The technical parameters / assumptions for the proposed models are based on the
guidelines prepared by the Directorate of Mushroom Research and the Agricultural
Universities. Some of the important assumptions are as given below:-

i. The average production of 2 kg mushroom per 10 kg of compost has been

considered.
ii. It has been assumed that 10% of the project cost would be brought in by the
entrepreneur as his margin money and remaining 90% will be the bank loan.
iii. The rate of interest charged on the bank loan has been assumed @ 10% and
12.5% for small and medium sized units respectively.
iv. The discounting factor of 15% has been considered to work out the
economics.
v. It has been assumed that only 50% of the surplus left after servicing of the
payment of interest would be available for servicing the principal
repayment.
vi. The Government of India as well as the State Government is providing
financial assistance under MIDH/ NHB schemes, however the same has not
been considered for working out the economics.

The model-wise detailed cost, cash flows, economics and repayment schedule are
furnished in Annexure I and II.

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Annexure-I : Model -I - Seasonal
Cultivation

A : Expenditure (Amt. in
Statement Rs.)
S.No. Particulars Qty Rate Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

A Capital Cost

i C/O Cropping 250 sft Rs.60 150000

Rooms incl. 0/- sft
Packing space

ii Cost of Racks LS LS 8000

etc.

iii Electric& Other LS LS 8000

fittings etc.

iv Sprayer, LS LS 2000
weighing
balance etc.

Sub-total 0 0 0 0
168000
B Recurring
Cost
i Compost inc. 400 bags 35/ba 14000 14000 14000 14000 14000
Spawn g
ii Cost of power, LS LS 4000 4000 4000 4000 4000
chemical etc.
iii Labour LS LS 6000 6000 6000 6000 6000

Sub-Total 24000 24000 24000 24000 24000

Total Cost 192000 24000 24000 24000 24000

Unit 192000
Cost =
B : Income Statement

S.No. Yield & Price Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

- Assumption
i Yield per bag 800 800 800 800 800
(2Kg)
ii Sale Price 100 100 100 100 100
(Rs/Kg)
iii Income 80000 80000 80000 80000 80000

C : Economics

S.No. Particulars 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr

i Costs 192000 24000 24000 24000 24000

ii Income 80000 80000 80000 80000 80000

iii Net Income -12000 5600 56000 56000 56000

0
iv Discount Rate 0.87 0.76 0.66 0.57 0.50
(15%)
v Discounted 166957 18147 15780 13722 11932 226539
Costs
vi Discounted 69565 60491 52601 45740 39774 268172
Income
Internal Rate 35%
of Return
(IRR)
Benefit Cost 1.18
Ratio (BCR)

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 Net Present 41634
Value (NPV)

D. Loan Details

S.No. Particulars Amt (Rs)

a Unit Cost 192000

b Margin Money 19200

(10%)
c Bank Loan 172800
(90%)
d Rate of 10.0%
Interest

E. Repayment Schedule

Year Bank Loan Loan Inter Interes Surplus Total Net

Oustand. est t Repaym Outgo Surplu
Outsta ent s
nd.
Interest Princip
al
I 172800 172800 17280 17280 0 0 0 0
0
II 172800 162080 17280 0 56000 34560 10720 45280
10720
III 162080 142184 16208 0 56000 16208 19896 36104
19896
IV 142184 121293 14218 0 56000 14218 20891 35109
20891
V 121293 99358 12129 0 56000 12129 21935 34065
21935
VI 99358 72877 9936 0 56000 9936 26481 36417
19583
VII 72877 46396 7288 0 56000 7288 26481 33769
22231
VIII 46396 19915 4640 0 56000 4640 26481 31121
24879
IX 19915 0 1991 0 56000 1991 19915 21906
34094
Total 448000 100970 172800 273770 174230

DSCR = 1.6

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Annexure-II : Model -2
: 20 TPA Unit

A : Expenditure (Amount in Rs.)

Statement

S.No Particulars Qty Rate Yr-1 Yr-2 Yr-3 Yr-4 Yr-5

A Capital Cost
i C/O Cropping 1125 sft 900/Sft 1012000
Rooms -
(25'x15'x12') - 3
Nos.
ii C/O Corridors in 360 sft 600/sft 216000
Growing Rooms -
54'x8'x6.67'

iii C/O Packing 230 sft 500/sft 115000

Rooms/ Office -
25'x9.2'x12'

B Machinery
i AHU 5 Ton 3No. 2 600000
capacity lakh/unit

ii Steel Racks in LS LS 200000

growing area

iii Water & other LS LS 25000

fittings etc.

iv Equip. like LS LS 15000

sprayers ,
harvesting trays
etc.

Sub-total 0 0 0 0
2183000
C Recurring Cost
i Compost 105 ton 6000/ton 630000 630000 630000 630000 630000
ii Energy LS LS 100000 100000 100000 100000 100000
iii Labour 2 No 4500/PM 108000 108000 108000 108000 108000
Sub-Total 838000 838000 838000 838000 838000
D Miscellaneous LS LS 50000 50000 50000 50000 50000
Expenses

E Total Cost 3071000 888000 888000 888000 888000

Unit Cost 3071000

B : Income Statement
S.No. Yield & Price - Yr-1 Yr-2 Yr-3 Yr-4 Yr-5
Assumption
i Yield (Kg) 10000 20000 20000 20000 20000
ii Sale Price 100 100 100 100 100
(Rs/Kg)

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 iii Income 1000000 2000000 2000000 2000000 2000000
C : Economics
S.No. Particulars Yr-1 Yr-2 Yr-3 Yr-4 Yr-5
i Costs 3071000 888000 888000 888000 888000
ii Income 1000000 2000000 2000000 2000000 2000000
iii Net Income -2071000 1112000 1112000 1112000 1112000
iv Discount Rate 0.87 0.76 0.66 0.57 0.50
(15%)
v Discounted Costs 2670435 671456 583874 507717 441493 4874975
vi Discounted 869565 1512287 1315032 1143506 994353 5834745
Income
Internal Rate 40%
of Return
(IRR)
Benefit Cost 1.20
Ratio (BCR)
Net Present 959770
Value (NPV)

D. Loan Details
S.No. Particulars Amt (Rs)
a Unit Cost 3071000
b Margin Money 307100
(10%)
c Bank Loan 2763900
(90%)
d Rate of 12.5%
Interest

E. Repayment Schedule
Year Bank Loan Loan Interest Interest Surplus Total Net
Outstand outstand Repayme Outgo Surplu
ing ing nt s
Interest Principal
I 2763900 2763900 345488 345488 0 0 0 0
0
II 2763900 2553388 345488 1112000 690975 210513 901488
210513
III 2553388 2156974 319173 1112000 319173 396413 715587
396413
IV 2156974 1735785 269622 1112000 269622 421189 690811
421189
V 1735785 1288272 216973 1112000 216973 447513 664487
447513
VI 1288272 812789 161034 1112000 161034 475483 636517
475483
VII 812789 307588 101599 1112000 101599 505201 606799
505201
VIII 307588 38448 1112000 38448 307588 346036
765964
Total 7784000 1797824 2763900 4561724 322227
6
DSCR = 1.7

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 Different Mushrooms - types

Dhingri mushroom Button Mushroom

Milky Mushroom Shiitake mushroom

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 Different Mushrooms - types

Reishi Mushroom Paddy straw mushroom

P. sajorcaju Winter Mushroom

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 CHAPTER 6

MARKETING OF MUSHROOM

Marketing of mushrooms in India is not yet organised. It is the simple system of

producers selling directly to retailer or even to consumer, which has its own
limitations. The major quantity of Himachal mushroom is consumed in plains of
Punjab, Haryana and Delhi during Oct-Nov and Feb-May or in the local markets
catering mainly to the hospitality industry. During Dec-January, the produce from the
plain areas also arrives in markets. The middlemen and commission agents collect
produce from growers and dispatch to markets/satellite markets or markets outside
the state. From consumption trend, it is seen that people of high income group and
restaurants catering them are the main buyers of mushrooms.

The production of mushrooms, mainly seasonal, has also exacerbated its marketing
problems. There have been frequent reports of gluts in north Indian States during the
winter months forcing the distress sale of the mushrooms. This reinforces that effort
to increase the production without solving its marketing problems, would be counter-
productive. The marketing of fresh mushrooms would determine the future of
mushroom industry in India.

There have been rapid changes and fluctuations in prices and demand due to seasonal
nature of mushroom production and market forces. It is thus imperative that steps are
taken to promote diversification in terms of different types of mushrooms as also
mushroom products. This will provide income sustainability to the small growers
besides optimum utilization of created infrastructure and counter the ill effects of
fluctuations in prices and demand.

Despite the changing scenario, the market for the processed foods is not there as fresh
vegetables and fruits are preferred in this country. Fresh mushrooms have very short
shelf-life, cannot be transported to long distances without refrigerated transport
facility and are largely sold in local/ nearby markets in and around production areas.
The cultivation of white button mushrooms throughout the year under controlled
condition is restricted to few commercial units and 25-30% of the production is being
done under natural conditions during the winter. All the problems of marketing is
experienced in 2-3 winter months (Dec-Feb) 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
highly un-remunerative prices. Private processors, a few, rather than coming for
rescue, get tempted to avail of the situation for their benefit.

According to the findings of a survey by Mac-plan India, about 55% of the households
out of 354 samples from 29 major cities of 15 states of the country were the regular
consumers. Highest level of consumption was about 60% in the Northern Region,
while the lowest was 20% in the Eastern Region. Consumers with income ranging
between Rs.10,000 and Rs. 35,000/- were the major consumers i.e., between 19-22%.
Supply and Price trend of mushrooms were inconsistent affecting consumer demand.

Mushroom is a novel food item for majority of the populace of this country and what
to ask of its flavour, nutritive value, many are not aware of mushroom and considered
by good number as non-vegetarian item. This is evidenced by the fact that per capita

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annual consumption of mushrooms in India is about 40 grams as against over a kg in
various countries. There has not been any serious effort to promote the product, to
strengthen and expand the market in order to increase its consumption and
consequently production.

Post-Harvest Management practices for effective marketing

Increased productivity demands proper post-harvest infrastructure to increase shelf

life and marketability. Since mushrooms are perishable and delicate in nature, these
cannot be kept afresh for more than 24 hrs. After the maturation of the fruiting body,
the deterioration starts with the formation of brown colouration. The quality of
produce declines rapidly making it unmarketable. To overcome this problem,
especially during peak season, suitable post-harvest management/practices are to be
followed to increase the shelf life and marketability of mushrooms.

In the coming years, there is going to be good demand for processed and fast foods.
Mushrooms may be canned to meet the demand in the off-season and in the
nonproducing areas. Product diversification should also be tried. Regarding the
problems of sale/export of canned mushrooms, serious thought has to be given to
bring down the cost of production of mushrooms and processing in order to compete
in the international market. The practices to increase the shelf life of mushrooms are
briefly given hereunder:-

Grading& Packing: Grading of mushrooms is important for marketing, generally

done by segregation of mushrooms into various grade standards as per market
demand. The button mushrooms are graded into Grade A, B and C as per DMI
standards. Packing is essential to protect the mushroom during marketing and
generally packed in polythene bags for local markets. CFB cartons containing
polythene pouches wrapped with PVC films are preferred for long transport.
Mushrooms are marketed as fresh, dried and preserved. In Himachal Pradesh, it is
mainly marketed in fresh form.

Storage:Pre-cooling of mushroom kept in a plastic bag is done before storage in

cooling unit. Vacuum cooling, another technology being adopted, is a costly process
and involves inevitable loss of fresh weight.

Processing: Due to highly perishable nature, preservation of mushrooms is

necessary to minimize the post-harvest losses. The processing techniques such as
Canning, Individual Quick Freezing, Vacuum Freeze Drying, Drying, Pickling,
Steeping Preservation etc. ought to be employed, based on their merits, market
demand and end use.

Canning: Canning is an established process of preserving mushroom pieces in brine,

butter, oil, vinegar etc. The mushrooms are graded, cleaned, blanched (pre-cooked),
filled in brine solution of cans and ultimately sterilized with heat and cooled before
storage.

Individual quick freezing, Vacuum freeze drying are other mushroom processing
techniques retaining original shape, quality, texture, freshness properties of the
produce.

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ii) Drying: Drying is an age old practice of preserving mushrooms. Sun drying,
mechanical drying, air drying, micro-wave oven drying, etc. have been developed with
the advancement of technology.

iii) Pickling: Pickling of mushroom is also a popular method of preserving, an

economically viable way during the surplus periods.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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 CHAPTER 7

MUSHROOM TRADE AND EXPORTS

7.1 WORLD TRADE IN MUSHROOM

World mushroom production has gradually increased from 0.30 million tons to 3.41
million tons over a period of last 50 years from 1961 to 2010.Resultantly the world
trade trend shows that the mushroom export/import has also continuously increased
during the period. The spurt in mushroom trade, however, was marginal till 1985 and
thereafter there has been phenomenal increase in mushroom export/import up to
2010.

Poland, Netherland, Ireland, China, Belgium, Lithuania, Canada and USA are the
major mushroom exporting countries, while countries like UK, Germany, France,
Netherlands, Belgium, Russian Federation and Japan import the mushroom from the
exporting countries.

World processed (canned and dried) mushroom export has continuously increased
from 0.049 to 0.683 million tons over the period of last four decades (1970-2010) as
compared to the fresh mushroom export (0.014 to 0.482 million tons), but
fluctuations in export is higher in case of the processed mushroom. In the United
States, five decades ago, 75% of the mushroom consumption was in the form of canned
mushroom, however, canned mushroom contributes only 15% of total mushroom
consumption today. The consumption of canned mushroom in recent times has been
static, whereas, consumption of fresh mushroom has shown upward trend, indicating
a shift in consumer’s preference.

Germany is the largest importer of preserved mushrooms (canned) followed by

Russian Federation, USA and Japan, which is provided mainly by China, Netherland,
Spain, France and Indonesia.

China is the largest producer and consumer of mushrooms in the world followed by
USA and Netherland respectively.

Trade of mushrooms in European Union is significant. Mushroom production in

European Union is about 27% of the world production. Netherlands, France and Spain
are the large producers and consumers. Poland is the largest exporter and UK largest
importer among EU countries.

7.2Mushroom Export of India

India’s share in the world trade in mushrooms was insignificant till 1993, however, in
1994, India emerged as the second largest exporter of canned mushrooms to the
United States. Presently, mushroom is being exported to the United States, European
and other countries.

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The mushroom export in last three years is given hereunder

(Quantity in Metric Ton /Amount in Rs. Lakh)

Category 2012-13 2013-14 2014-15 Major importers
Qty Amt. Qty Amt. Qty Amt.
Fresh/ 60.03 85.02 641.58 1092.94 119.42 69.32 USA, Russia
Chilled
Dried 80.48 2691.51 175.79 2821.88 67.73 3964.60 Germany, USA, Canada,
France,Israel,Russia
Prepared/ 5468.40 4321.32 362.16 3875.37 83.35 9730.83 France,USA,Israel,Russia,Switzerla
Preserved nd
Provisionally 1157.02 1232.16 933.28 897.28 360.78 439.93 USA, Israel
preserved
Source: NHB –DGCIS Annual Report

The major importing countries are United States, Canada, Germany, Netherland,
France, Switzerland, Japan and Malaysia. Earlier, major quantity of mushroom was
exported in preserved/processed form but of late the scenario is changing. Fresh
mushrooms are preferred over preserved ones in EU and United States. Incidentally,
the entry of India in International market coincided with the crash of prices for
mushroom in international markets because of competition from China, being the
leading exporter. However, the strong presence of China in market of United States
was reduced due to imposition of anti-dumping duties by United States.

European Union and the United States are the biggest markets and Poland and China
are the biggest competitors for Indian mushrooms. The countries in Middle East are
emerging as potential markets for Indian mushrooms.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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 CHAPTER8

GOVT. POLICIES AND PROGRAMMES FOR

PROMOTION OF MUSHROOM IN HP

8.1Central Government Initiatives for Mushroom Development

8.1.1 Mission for Integrated Development of Horticulture –Horticulture

Mission for North East and Hilly States (HMNH)

Government of India is implementing the Horticulture Mission for North East and
Himalayan States (HMNH), as a sub scheme of Mission for Integrated Development
of Horticulture (MIDH). As per the approval of GOI, mushroom activity is extended
assistance as per the revised cost norms for mushroom production unit, spawn making
unit and compost making unit. Both public and private sector are eligible for financial
assistance. The cost norms & pattern of assistance under HMNH are briefly given
below:-

(i) Production Unit: Rs.20 lakh/unit: The financial assistance to the extent of 100% of
the project cost for public sector and 40% for private sector for meeting the
expenditure on infrastructure as credit linked back ended subsidy is provided.

(ii) Spawn making unit: Rs. 15 lakh/unit: The financial assistance to the extent of 100%
of the project cost for public sector and 40% for private sector for meeting the
expenditure on infrastructure as credit linked back ended subsidy is provided.

(iii) Compost making unit Rs.20 lakh/unit : The financial assistance to the extent of
100% of the project cost for public sector and 40% for private sector for meeting the
expenditure on infrastructure as credit linked back ended subsidy is provided.

The other schemes also provides assistance for Post-Harvest Management covering
collection, Pre-cooling unit, Cold storage/ CA storage units, Refer vans, Marketing
Infrastructure etc., which can be availed for mushroom sector.

8.1.2 National Horticulture Board (NHB)

The scheme relating to establishment of commercial production as well as projects on

Post harvest Management and primary processing of products are eligible for
assistance as per approved cost norms. The projects for establishment of integrated
production unit on Mushroom are extended financial assistance as credit linked back-
ended subsidy @ 50% of project cost limited to Rs.37.50 lakh in Hilly areas. The Board
also supports Post Harvest Management projects relating to Pack House, Refer-Van,
Retail Outlets, Primary processing etc.,for horticulture produce in project mode as
credit linked back-ended subsidy @ 50 % of project cost limited to Rs.72.50 lakh per
project in hilly areas.

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8.1.3 Agricultural& Processed Food Products Export Development
Authority (APEDA)

APEDA was established by the Government of India as a premier organisation

assisting in development of export in agricultural and food products in country. A
number of schemes have been taken up by APEDA for providing assistance for various
beneficiaries/ organizations including R&D, Infrastructure Development, specialised
transport units, assistance to exporters / producers, Quality Development etc.

8.1.4 Ministry of Food Processing Industries (MOFPI)

The schemes relating to agriculture, horticulture and food processing are being
implemented covering Technology Up-gradation, Establishment/Modernization of
Food Processing Industries. In hilly states including NE region, grant–in–aid up to
33.33% of the cost of plant & machinery and technical civil work is provided.

The Ministry implements another scheme for construction of Cold Chain, Value
Addition and Preservation Infrastructure. The scheme for Mega Food Parks (MFPS)
has been launched to provide adequate/excellent infrastructure facilities for food
processing along the value chain from the farm to market.

8.1.5 Directorate of Marketing & Intelligence (DMI)

The DMI aims at bringing integrated development of marketing of agricultural and

allied produce in the country. Besides other schemes, it implements scheme for
development/strengthening of Agricultural Marketing Infrastructure, Grading and
Standardization to develop marketing infrastructure in the country to cater to the post-
harvest requirements of production and marketable surplus of various farm products.
The scheme may cover functional infrastructure for collection, drying, cleaning,
grading, standardization, SPS (Sanitary &Photo-sanitary) measures and quality
certification, labeling, packaging, value addition facilities etc. Mobile infrastructure for
post-harvest operations like refrigerated vans used for transporting agricultural
produce to maintain cold supply chains are also eligible for assistance under the
Scheme.

8.1.6 Small Farmer’s Agriculture Consortium (SFAC)

Small Farmer’s Agribusiness Consortium (SFAC), a registered society, functioning

under Department of Agriculture and Cooperation, Government of India is operating
scheme for Agribusiness Development through venture capital assistance and project
development facility. The Venture Capital Scheme aims to promote investments in
Agri-business projects with the participation of nationalised banks. The venture
capital for agribusiness up to 10 % of the total project cost or 26% of the total project
equity or Rs. 75 lakh, whichever is lower is made available for the projects in NE &
Hilly states. In special cases, higher venture capital can also be considered by
SFAC.The Project should provide assured markets to farmers / producer groups.

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8.2State Government Initiatives for Mushroom Development

Mushroom development initiatives under the state sector have the following
objectives: -

1.To provide training facilities in mushroom cultivation for prospective mushroom

growers.
2. To provide extension services to the mushroom growers.
3. To demonstrate the production techniques of mushroom cultivation.
4.To provide consultancy services to cooperative and private sector for setting up of
mushroom production and processing units.
5. To develop suitable marketing and processing channels for the industry.

The following schemes are being implemented by the Department of Horticulture,

GoHP:-

a. Training on Mushroom Cultivation:

1. Organization of training camps of 7-10 days duration to impart technical Know-how.
2. Provision of training allowance to bona-fide Himachali farmers.
3. Preference to women, SC/ST, IRDP, SF/MF groups and unemployed graduates in
training

b. Registration of Mushroom Growers: Registration of trained mushroom growers

under different group viz. SC/ST, IRDP, SF/MF and Unemployed Graduate.

c. Supply of Compost: Quality compost (pasteurized) along with pasteurized casing

soil is supplied to the registered mushroom growers on the prevailing rates of subsidy.

d. Availability of Spawn: Department of Horticulture make available good quality

spawn from the laboratories of UHF Nauni, Directorate of Mushroom Research, Solan,
HPKVV Palampur and other reputed laboratories.

e. Loan facilities for Mushroom Cultivation: The department assists the registered
trained Mushroom Growers in preparation of Project Reports under approved
schemes of NABARD/NHB and recommend cases to the nationalized banks.

f. Extension Services:
1. Distribution of free literature on mushroom cultivation to the mushroom growers
2. Examination of diseased samples of compost-free of cost
3. Provision of on spot technical guidance-free of cost

g. Subsidy for Mushroom Development:

The schemes provides incentives to farmers and unemployed graduate in the form of
subsidy on the following items required for mushroom production, so as to encourage
large number of farmers and unemployed gradates to take this activity:-
i) Subsidy on compost for maximum 400 trays (40 kg) @ Rs.20/tray to SF/MF
and unemployed graduates and Rs.40 per tray to SC/ ST and SGSY farmers
ii) 100% transport subsidy on compost for all the above categories.

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h. Rastriya Krishi Vikas Yojna

An assistance of Rs. 80,000/-for the construction of mushroom house of size

20x12x10 ft, installation of racks in mushroom house, procurement of mushroom kit,
tools etc. and pasteurized compost to the registered mushroom growers.

8.3 National Bank for Agriculture and Rural Development

NABARD is playing a vital role since its inception in providing credit support to
agriculture including production and marketing of horticultural crops. Since 1990s, it
has been focusing on horticulture in general and activities like mushroom cultivation
in particular with specific objective of providing Off-farm employment opportunities
in the rural areas. A number of interventions aimed at augmenting the production of
mushrooms have been initiated. These initiatives in brief are as under:-

I. Development of “Area Development Scheme on Mushroom “for various

districts
II. Model Bankable schemes for different components of Mushroom cultivation
viz., Compost making, Spawn production and Mushroom production have been
prepared.
III. Unit costs for mushroom cultivation are prepared and updated on yearly basis
for financing by the banks.
IV. NABCONS (NABARD Consultancy Services).a subsidiary of NABARD is
providing consultancy services in preparation of Technical Feasibility Reports,
monitoring & evaluation etc.
V. NABARD is promoting mushroom cultivation among the farmers under
watershed development projects. Ambuja Cement Foundation, implementing
watershed development projects in Solan District, have already developed a
cluster of mushroom growers in Dhundan Watershed.

8.4Research and Development Initiatives

8.41Directorate of Mushroom Research, Solan:

DMR, based at Chambaghat, Solan, an institution of Indian Council of Agricultural

Research, has been spearheading research and development work on a variety of
mushrooms. The scientists of the organization have been successful in evolving high
yielding strains including High Yielding Varieties of button mushroom. The Center has
been providing following comprehensive services to the entrepreneurs/ growers:-

i) Training of entrepreneurs/growers
ii) Consultancy services for preparation of Techno-Economic Feasibility
Reports
iii) Testing of Compost, other ingredients for quality
iv) Advisory services like farm designing, crop management etc.
v) Sale of culture, spawn of improved strains
vi) Extension services like organization of Mushroom Mela, exhibitions,
publication of leaflets/ brochures

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8.42Dr. Y S Parmar University of Horticulture & Forestry, Solan:

The University, besides undertaking research work under coordinated project with
Directorate of Mushroom Research (DMR), is organizing extension programmes at
various Research Stations in the state and providing quality spawn to the growers.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

CHAPTER 9

SWOT ANALYSIS
9.1 A Retrospection

Beginning with a small experimental initiative in early seventies at Solan, the

mushroom cultivation in the state has registered considerable growth during the last
40 odd years. The mushroom cultivation has found favour with the farmers especially
the younger lot in rural areas as also entrepreneurs in semi-urban areas, with
apparently vast potential to grow further. It has potential to contribute to the state’s
economy in several ways including generating employment opportunities and
additional income in rural areas. It provides seemingly viable diversification option
for the otherwise shrinking agricultural sector. A number of programmes and policy
initiatives introduced by the central and state governments have contributed
significantly to the growth of the industry.

It is imperative that the general problems and prospects of the sub-sector are analyzed.
The situation prevailing in Himachal Pradesh is not much different from that
prevailing in adjoining states, thus the observations made hereunder should apply to
the sub-sector as such. An attempt has been made to undertake SWOT analysis,
followed by steps to strengthen the mushroom industry in the state.

9.2 SWOT Analysis

SWOT analysis for mushroom industry in Himachal Pradesh is attempted below. This
analysis is not designed to determine whether an enterprise or activity is “good” or
“bad”, but just as a tool to identify the different forces acting on the industry at the
given juncture.

Strengths:

 Varied Agro-climatic Conditions: The State offers varied agro-climatic

conditions congenial for mushroom production throughout the year. Seasonal
growers, except in lower shiwalik belt, can easily produce a minimum of 2 crops
per annum, whereas, in upper reaches of Shimla, Sirmaur, Chamba, Kullu,
Kangra and Solan, 3 or 4 crops every year can be cultivated. This potential needs
to be optimally exploited. Further, the growers can diversify mushroom
portfolio by growing multiple mushrooms in different seasons of the year. This
would not only ensure effective/optimum utilization of created infrastructure
but would also enhance their income level/profitability.

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  Well established infrastructure facilities: Mushrooms are a perishable
commodity and therefore, production centers should have good connectivity to
the markets. The state has very good rural connectivity linking to markets
within the state as well major markets in northern India. The state has added
advantage of uninterrupted power supply, a critical requirement for round the
year production in the commercial units.

 Booming Domestic demand: The state has a throbbing hospitality sector

with enormous domestic demand for utilizing the sizable production within the
state. The consumption of mushrooms by the general public has also increased
significantly due to high income level.

 Good R&D and extension network: The State has very good R&D and
extension infrastructure with NCMR, Solan, Agricultural and Horticultural
Universities with KVKs and the State Horticulture Dept. providing technical
know-how and other advisory services to the growers. The State Government
has created a very good infrastructure base for supply of pasteurized compost,
spawn etc. Besides, a large number of Compost Units and Spawn laboratories
have been set up in the private sector.

Weaknesses:

 Unorganised Market: Marketing of mushrooms is not yet organized. The

seasonal producers directly sell to retailers or consumers. During the peak
season in winter, there is often glut in the market, forcing the growers to resort
to distress sale. The State Government has fixed a minimum price, however, no
market intervention mechanism exists for the protection of growers. Growers
lack sufficient information about market trends, demands, prices etc. or
available information is ineffective.

 Scanty Post Harvest Management: Mushrooms are highly perishable and

these need to be transported in similar conditions to maintain their quality and
freshness. This requires appropriate handling and proper post-harvest
management practices, for which growers are not fully equipped. The
processing infrastructure is almost non-existent to absorb surplus production
during peak seasons to maintain stability in prices of fresh mushrooms.

 Costly Raw material: The growers in the state depend largely on adjoining
states for raw material used in production, entailing high cost of transportation.
The skilled manpower is scarce and costly. All these factors contribute to high
cost of production and reduced margin to the growers vis a vis growers of the
neighboring states.

 High Capital Cost: Mushroom cultivation specifically, high tech cultivation

is capital intensive industry. The cost of capital is much higher than the other
sectors and finance is not easily available.

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Opportunities:

 Growing Market: The demand for mushrooms in the domestic and

international markets has been growing substantially and thus the state must
grab this opportunity.

 Synergy with govt. priorities: The activity has synergy with the
Government’s focus on creating more employment opportunities in Non-farm
sector to wean away surplus farm labor.

 Cost effective appropriate technologies: Well adapted modern

technologies for production and post-harvest management are available within
the state.

 Increasing awareness, purchasing power and liking for mushrooms in domestic

markets.

Threats:

 Slow adoption of technology: There is vast scope for the mushroom

industry to adopt modern technology to meet the quality standards specifically
for international trade and productivity level.

 Rising Costs of production: The days of seemingly cheap labour may not
continue in future. The units operating in urban areas have started experiencing
labour shortage. This may require more mechanization/ automation of
operations in commercial units.

 Changing Consumer preferences: The share of button mushroom has

started declining in the world trade with availability and preference for
specialty mushrooms. The necessary adjustments or corrective measures have
to be anticipated and adopted.

9.3Steps to strengthen mushroom sector

The mushroom industry in Himachal Pradesh has already been grounded and ready
to make further strides. However, its growth calls for concerted efforts to seize the
opportunities and realize its full potential. The critical aspects which need attention
are discussed below:-

Policy intervention

Himachal Pradesh is ideally suited for production of a variety of mushrooms round the
year, due to favourable climate, however, the problems of marketing coupled with
short shelf life negate the advantage. Development of requisite infrastructure in major
production areas requires special attention.

The State Government may consider constitution of an independent agency like

Mushroom Development Board on the lines of Coffee Board and Coir Board for
holistic development of mushroom processing and marketing industry in the state.

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Inefficient marketing system with a centralized procuring and processing unit may be
set up surrounding the potential/growing areas to order to protect small farmers from
the seasonal gluts in mushroom production besides exploitation by middlemen.

The State Govt. has four integrated compost units in different regions of the state and
one more unit is being established shortly. The state should establish more compost
mother units at least one in each potential district for supply of quality compost to the
small/marginal growers, not catered to by the private sector.

The State Government should facilitate/encourage formation of co-operatives of the

growers, specifically in the interior districts.

The State Government should launch a Market Intervention Scheme to procure

mushroom from the market during gluts to ensure price stability. Declaration of a
dynamic minimum support-price for mushrooms and provisions for insurance
coverage be considered.

Cultivation of varieties other than white button mushroom needs to be incentivized as

part of the mushroom diversification strategy. Growers in lower region of the state
need to be encouraged to cultivate paddy straw, oyster mushroom and other specialty
mushrooms as these require less monetary inputs with simpler production technology.

Lack of authentic data on various aspects of mushroom industry is a big handicap for
developing future strategies and interventions. A centralized data base of
entrepreneurs/growers, markets, price, demand/ supply and institutional facilities
should be prepared by a nodal agency.

Availability of compost and spawn within the state is quite comfortable, however, the
quality of compost and spawn supplied by private entrepreneurs lack standards. A
regulatory/ monitoring mechanism should be in place to enforce compost and spawn
standards and fair price.

Interaction among R&D institutions, Developmental Agencies, mushroom industry

and growers needs to be strengthened for realizing the full potential of the industry.

Organisational /Growers

The State has large number of scattered seasonal growers, who either face problems
or bear high costs in sourcing the raw material/other inputs, technical know-how and
other services. These growers may form Cooperatives or SHGs for cost effective input
supply, services and efficient marketing. These cooperatives may also create common
facilities for processing, cold storage and organised distribution network.

The Growers’ Associations should encourage its members to produce the crop
throughout the year by controlling temperature and humidity so that the supply is
maintained throughout the year and also exploit the potential of other fast growing
mushroom varieties instead of concentrating only on white button mushroom to avail
the advantage of agro-climatic conditions in the state.

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 Marketing

Marketing of mushroom is totally in the unorganized sector and lack of efficient

marketing system is a major bottleneck for further development of the industry. Public
Sector Undertakings, organized retailers like super markets, Mother Dairy etc., should
be approached for efficient marketing of mushrooms.

Growers’ Associations or Cooperatives should make efforts to establish their product

under a brand name. The existing packing of mushroom should be changed to wrap
trays and other attractive packages using environment friendly bio-degradable
packaging material.

Growers’ Associations/Cooperatives should attempt to create an organized

distribution network/ retail chain systems connected with supermarkets and may
explore possibility of establishing processing units.

Publicity

Mushrooms are highly nutritive food and have certain medicinal values, however, per
capita consumption in India is meager 40 gm. As almost entire mushroom production
from seasonal growers is directed towards domestic market, the State
Govt./Mushroom Units/ Cooperatives/Growers’ Associations should launch a mass
media marketing campaign to increase popularity of mushroom in the country. These
may include:-

i) A National advertising campaign by State Horticulture Department and/or Growers

Co-operatives/Associations etc. to encourage consumption of nutritive mushrooms on
the lines of NECC.
ii) Developing print, audio, video material for mass publicity of mushroom.
Organising mushroom festivals/pavilions in all the important exhibitions, fairs/melas
organized in the State.

Research & Development

The productivity of mushroom has not shown any significant improvement in recent
years. In order to ensure sustainable growth of mushroom production, regular genetic
improvement is required for developing high yielding varieties.

The state, on account of varied ago-climatic conditions, offers potential for growing
different types of mushrooms, throughout the year. Thetechnologies developed for
diversified farming are required to be refined and popularized.

The locally available and cheap raw materials including agricultural residues within
the state should be tested for use as substrates to bring down the cost of cultivation.

There is need for designing low cost growing houses utilizing locally available raw
material to bring down the initial capital cost.

Mushroom growing is an eco-friendly activity utilizing agricultural waste as medium,

however, inefficient disposal of spent mushroom substrate (SMS) is reported to create

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environmental problems. The technology for productive use of SMS including its safe
disposal needs to be developed and refined.

Extension

The State Horticulture Dept. should initiate more extension programmes for growth
of mushroom cultivation in this state, particularly in the districts with low level of
mushroom production.

More on-site training programmes of longer duration should be arranged. The training
programmes should be comprehensive to impart the prospective growers with
complete insight into the mushroom technology.

There is need to promote round the year cultivation of different mushrooms in rotation
under the seasonal conditions. This will help the growers in increasing as well as
diversifying the mushroom production, besides providing gainful employment
throughout the year and optimum utilization of the infrastructure.

Growers should be trained for efficient production and post-harvest management

practices like harvesting, storage, marketing, processing, preservation etc., to
minimize the losses as lack of proper harvesting/handling techniques is reported to
incur losses up to 20% of the production.

Post-Harvest Management

Value addition in mushroom has not received due attention till now. Significant
quantity of mushrooms in future is likely to be utilized for production and
consumption as value added products compared to present trend of fresh mushroom
utilization. Value addition and product diversification need to be given due attention.
Financial Institutions

Financial assistance and soft loans are available from National Horticulture Board,
APEDA, State Govt. agencies for mushroom development. The incentives include
reduced rate of interest on term loans, subsidies etc. Mushroom industry is a capital-
intensive enterprise. Growers cannot avail these opportunities due to high rate of
interest. Due attention needs to be given to provide more loan facilities to the growers
at cheaper rates of interest.

9.4The Way Forward

Mushroom industry has the potential to contribute significantly in economic growth

of the country and Himachal Pradesh in particular. In the present circumstances,
when the conventional agriculture is beset with many challenges on account of
uneconomical land holdings, deterioration of land and water resources etc. leading to
farmers’ distress, diversification is the only way to impart sustainability to the Indian
agriculture. Mushroom cultivation can be one of those diversification tools to enhance
the disposable income of farmers, specifically small and marginal farmers,
unemployed rural youths. Further, the demand for quality food/products is increasing
with the life style changes and increasing income. Mushroom cultivation fits very well
into this category and likely to emerge as an important vocation.

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Mushroom cultivation in the state has recorded significant growth in recent years,
however the state’s production accounts for only around 6-7% of the country’s
production. The state has immense potential to be major player, but for further
growth, concerted efforts are required. The further growth of mushroom industry will
depend upon increasing and widening of domestic market, creation of an effective
marketing system, enhancing the productivity level to remain competitive, promotion
in non-traditional areas, diversification of mushroom cultivation by promoting
varieties of mushrooms in tune with market trends, creation of post-harvest
management infrastructure etc.

Major Action Points for Policy / Budget interventions

i. The State is ideally suited for production of a variety of mushrooms round

the year, but the problems of marketing coupled with short shelf life negate
the advantage. An efficient marketing system with a centralized procuring
and processing unit may be set up surrounding the potential/growing areas
to order to protect small farmers from the seasonal gluts in mushroom
production besides exploitation by middlemen.
ii. Cultivation of varieties other than white button mushroom needs to be
incentivized as part of the mushroom diversification strategy. Growers in
lower region of the state need to be encouraged to cultivate paddy straw,
oyster mushroom and other specialty mushrooms as these require less
monetary inputs with simpler production technology.
iii. Availability of compost and spawn within the state is quite comfortable,
however, the quality of compost and spawn supplied by private
entrepreneurs lack standards. A regulatory/ monitoring mechanism should
be in place to enforce compost and spawn standards and fair price.
iv. Lack of authentic data on various aspects of mushroom industry is a big
handicap for developing future strategies and interventions. A centralized
data base of entrepreneurs/growers, markets, price, demand/ supply and
institutional facilities should be prepared by a nodal agency.
v. Mushrooms are highly nutritive food and have certain medicinal values,
however, per capita consumption in India is meager 40 gm. As almost entire
mushroom production from seasonal growers is directed towards domestic
market, the State Govt./Mushroom Units/ Cooperatives/Growers’
Associations should launch a mass media marketing campaign to increase
popularity of mushroom in the country. These may include:-
vi. The State Horticulture Dept. may initiate more extension programmes for
growth of mushroom cultivation in this state, particularly in the districts
with low level of mushroom production. More On-site training programmes
of longer duration should be arranged. The training programmes should be
comprehensive to impart the prospective growers with complete insight into
the mushroom technology.
vii. The State Government may facilitate/encourage formation of co-operatives
of the growers, specifically in the interior districts.
viii. The State Government may consider constitution of an independent agency
like Mushroom Development Board on the lines of Coffee Board and Coir
Board for holistic development of mushroom processing and marketing
industry in the state.

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 >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

CHAPTER 10

Mushroom Value Chain in Himachal Pradesh -

Issues and suggested interventions
Sr. Issues Interventions Stakeholder
No.
1. Production  Several incentives SLBC and Lead
 Mushroom cultivation / subsidies are Banks of respective
specifically, high tech being extended districts
cultivation is capital under GoI and
intensive. GoHP
programmes
including supply
of compost.

 High production cost due  Being capital

to intensive, a
o Dependence on dedicated credit
adjoining states for raw programme with
material at high cost of effective
transportation. convergence of
o Skilled manpower is Govt.
scarce and costly. programme
including venture
capital assistance
provided by
SFAC, is
necessary to
address the credit
and
developmental
needs for
mushroom
cultivation.
 SLBC and Lead
Banks of
respective
districts should
formulate
appropriate credit
products for
supporting the
activity,
considering the
potential and
agro- climatic
advantages the

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 State has for
mushroom
production
 NABARD has
prepared Area
Development
Plans, which may
be adopted across
all the potential
regions in the
State
 The progress
under credit and
related
operational issues
may be discussed
as part of
structured agenda
in respective
meeting at district
and State level.
Post-harvest  Adopting the  NABARD to
Management & concept of explore the scope
Processing Producer for promotion of
 Proper cleaning grading Organizations Mushroom
and packing is an will help in Producers’
important prerequisite to facilitating market Organizations
minimize quality losses aggregation and and support the
during transport and value addition, same
handling. besides better  State Government
 Separate packing & bargaining power. to commission a
grading facility for smaller Promotion of study (if not
mushroom units is not a mushroom already done) for
viable proposition. producer market potential
Decentralized production organizations may for fresh and
facility with centralized be explored. processed
cleaning, grading facility  Convergence for mushrooms
strategically located in setting up of across potential
covering major common grading consumer
production pockets is / packing markets (focus on
necessary. infrastructure metropolitan
 A major part of present may be explored. cities).
production is marketed in This can be linked  Based on the
fresh form. Value addition to the producer study findings a
organizations set system for
has not received due up for the sharing market
attention till now. purpose. information
 The demand for among
value added mushroom
mushroom

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 products is likely producers may be
to increase with established.
growing  Directorate of
awareness and Mushroom
health
Research and Dr.
consciousness.
Simultaneous Y S Parmar Univ.
promotional of Horticulture &
efforts are Forestry, Solan
necessary to
simultaneously
promote value
addition and focus on R&D for
product evolving simple
diversification low cost
technologies for
processing and
value addition in
mushrooms.
Marketing  Urban /  Government of
 Depending upon species, metropolitan Himachal
Mushrooms are marketed markets continue Pradesh may
as fresh, dried and to be major examine the
canned/preserved forms. demand centres policy issue of
 In Himachal Pradesh, for quality foods extending freight
however, it is mainly like mushrooms. subsidy to
marketed in fresh form. mushroom
 Being highly growers for
 Winter months (Dec-Feb) perishable transporting to
accounting for more than product with a distant market by
75% of annual production. shelf life of 24 air.
Over-saturated market hours, quick  Suggestion made
contributing to un- transport by air to regarding
remunerative prices. demand centre promotion of POs
during peak would address
production season market related
is a necessary issues as well
intervention.  Market
 The fast diversification
expanding air through
connectivity in the commissioning of
country should be studies / surveys
leveraged upon as indicated
for accessing the above.
better markets
across the
regions/country.
 High freight cost
by air is a major
limitation that

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 should be
addressed with
appropriate
freight subsidy
policyat least
covering peak
production
seasons.

Disclaimer
The inputs and the suggested models contained in the document are based on
the information gathered orally or otherwise from various sources and no
responsibility is accepted by NABARD for accuracy of facts and figures. The
Banks and Entrepreneurs are advised to use this only as a reference document
and use their own judgement and prudence for sanctioning and execution of
the projects.

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