1.                  INTRODUCTION


Oyster mushroom (Pleurotus sp.) belonging to Class Basidiomycetes and Family Agaricaceae is popularly known as ‘dhingri’ in India and grows naturally in the temperate and tropical forests on dead and decaying wooden logs or sometimes on dying trunks of deciduous or coniferous woods. It may also grow on decaying organic matter. The fruit bodies of this mushroom are distinctly shell or spatula shaped with different shades of white, cream, grey, yellow, pink or light brown depending upon the species.


It is one of the most suitable fungal organisms for producing protein rich food from various agro-wastes or forest wastes without composting.   


2.                  OBJECTIVE


The main objective of the exercise is to present a small scale viable bankable model production unit using modern technology.


3.                  BACKGROUND


3.1              Origin


Cultivation of a sp. of oyster mushroom (Pleurotus ostreatus) was initiated on experimental basis in Germany by Flack during the year 1917 on tree stumps and wood logs.  Growing technology was perfected in USA by Block, Tsao and Hau.  


Cultivation of different varieties of oyster mushroom was initiated in India in the early sixties.  Commercial cultivation began in mid-seventies.


3.2              Botanical Description


The oyster mushrooms have three distinct parts- a fleshy shell or spatula shaped cap (pileus) , a short or long lateral or central stalk called stipe and long ridges and furrows underneath the pileus called gills or lamellae. The gills stretch from the edge of the cap down to the stalk and bear the spores. The spores are smooth, cylindrical and germinate very easily on any kind of mycological media within 48-96 hrs. The mycelium of Pleurotus is pure white in colour.



3.3              Production


Oyster mushrooms are the third largest cultivated mushroom. China, the world leader in Oyster production, contributes nearly 85% of the total world production of about a million tonnes. The other countries producing oyster mushrooms include Korea, Japan, Italy, Taiwan, Thailand and Phillipines. The present production of this crop in India is only around 1500 tonnes due to low domestic demand. Another inhibiting factor is that export demand orders are large and can be met only if a linkage is developed between producer, cooperatives and exporters.


3.4              Economic Importance


The economic importance of the mushroom lies primarily in its use as food for human consumption.  It is rich in Vitamin C and B complex and the protein content varies between 1.6 to 2.5 percent. It has most of the mineral salts required by the human body.  The niacin content is about ten times higher than any other vegetables.  


The folic acid present in oyster mushrooms helps to cure anemia. It is suitable for people with hyper-tension, obesity and diabetes due to its low sodium : potassium ratio, starch, fat and calorific value. Alkaline ash and high fibre content makes them suitable for consumption for those having hyperacidity and constipation. A polycyclic aromatic compound pleurotin has been isolated from P. griseus which possess antibiotic properties.


The spent straw can be re-cycled for growing oyster mushroom after supplementing with wheat or rice bran @ 10-15 % and also for preparing compost of white button mushroom after suitable supplementation with nitrogen rich horse or chicken manure (sun-dried before use). The spent straw can be used as cattle feed and also for bio-gas production, The slurry can be used as manure.




4.1              Demand and Supply Patterns


This mushroom is not as popular as white button mushroom in the domestic market. A few units are cultivating it commercially for export market. Cultivation of this mushroom on commercial basis would be more profitable as compared to white button mushroom as capital costs are low.


The cultivation of this variety of mushroom is very simple and economical in rural areas where raw materials and facilities required are easily available.


Marketing of fresh oyster mushroom does not pose any problem at present due to very low production. However, as production increases linkage of producers with domestic markets and export oriented processing units will need to be developed to ensure remunerative prices to the producers.


Generally, export orders are too big to be met by a single grower and as such co-operatives have to be encouraged to pool their produce for trading the crop in a dried powder form in international markets.


4.2              Import / Export Trends


About 11,797 tonnes of fresh mushrooms and 4,099 tonnes of preserved mushrooms were exported to foreign countries viz. U.S.A., France, Ireland, U.A.E., Russia etc. during the period 2001-2002. The quantity of oyster mushroom exported is much lower than that of button mushrooms which constitute the major share of exports.


4.3              Analysis and Future Strategy


Species of Pleurotus are cheapest and easiest to grow among all the cultivated edible mushrooms. Cultivation does not require complicated substrate preparation technique as in case of button mushroom. The former can be grown on non-fermented, almost fresh plant residues (agri-wastes containing lignin and cellulose). Substrate preparation does not require controlled environmental conditions as in case of button mushroom.


The crop has got a number of varieties varying in shape, colour, texture and aroma which can be cultivated throughout the year under varied agro-climatic conditions.  Faster growth rate and early cropping is observed.  About 5 to 6 crops can be taken in a year as the total cropping period is 60 days.


5.                  PRODUCTION TECHNOLOGY


5.1              Agro-climatic Requirements


Oyster mushroom can grow at moderate temperature ranging from 20 to 300 C and humidity 55-70% for a period of 6 to 8 months in a year. It can also be cultivated in summer months by providing the extra humidity required for its growth. In hilly areas above 900m. (m.s.l.), the best growing season is during March/April to  September/October and in the lower regions from September/October to March/April.


5.2              Growing and Potential Belts


The major states in India producing this mushroom are Orissa, Karnataka, Maharashtra, Andhra Pradesh, Madhya Pradesh, West Bengal and most of the North Eastern hill states.

5.3              Varieties Cultivated


Among all the cultivated mushrooms Pleurotus has maximum number of commercially cultivated species suitable for round the year cultivation. All the varieties or species of oyster mushroom are edible except P. olearius and P. nidiformis which are poisonous. Species commercially cultivated all over the world during summer months includes P. flabelltus, P. sajor cajo, P. sapidus, P.membranaceous, P.citrinopileatus, P.eous etc. and those produced during winter are P.ostreatus, P.florida, P.cornucopiae, P.fossulatus, P.eryngii etc.


5.4              Cultivation Technology


The procedure for oyster mushroom cultivation can be divided into following four steps:


(i)                  Preparation or procurement of spawn

(ii)                Substrate preparation

(iii)               Spawning of substrate

(iv)              Crop management


5.4.1        Spawn Preparation


A pure culture of Pleurotus sp. is needed for inoculation on sterilized substrate. It takes 10-15 days for mycelial growth on cereal grains. It has been reported that jowar and bajra grains are superior over wheat grains.


5.4.2        Substrate Preparation


Oyster mushroom can be cultivated on a large number of agro-wastes having cellulose and lignin which helps in more enzyme production of cellulose that is correlated with more yield. These include straw of paddy, wheat and ragi, stalk and leaves of maize, millets and cotton, used citronella leaf, sugarcane bagasse, saw dust, jute and cotton waste, dehulled corncobs, pea nut shells, dried grasses, sunflower stalks, used tea leaf waste, discarded waste paper and synthetic compost of button mushrooms etc. It can also be cultivated by using industrial wastes like paper mill sludges, coffee byproducts, tobacco waste, apple pomace etc.


The popular methods of substrate preparation are:  


·                     Steam Pasteurization;           

·                     Hot Water Treatment;

·                     Sterile Technique (Till method);         

·                     Fermentation or Composting; and     

·                     Chemical Sterilization.           

5.4.3        Spawning of Substrate


Freshly prepared (20-30 days old) grain spawn is best for spawning. Old spawn (3-6 months) stored at room temperature (at  20-300 C) forms a very thick mat like structure due to mycelium aggregation and sometimes young pinheads and fruit bodies start developing in the spawn bottle itself. The spawning should be done in a pre-fumigated room (48hrs.with 2% formaldehyde).  


5.4.4        Crop Management


(A)               Incubation


Spawned bags, trays or boxes are arranged in a dark cropping room on raised platforms or shelves for mycelium colonization of the substrate. Although mycelium can grow from 10 to 330 C, but the optimum temperature for spawn running lies between 22 to 260 C.


(B)              Fruiting


When the mycelium has fully colonized the substrate, the fungus is ready for fruiting. Contaminated bags with moulds may be discarded while bags with patchy mycelial growth may be left for few more days to complete mycelial growth.


While various species require different temperature regimes all require high humidity (70-85%) during fruiting.  Frequent spraying of water is required in the cropping room depending upon the atmospheric humidity.  Fruit body produced under humid conditions (85-90%) is bigger with less dry matter while those developed at 65-70% relative humidity are small with high dry matter.


CO2 concentration during cropping should be less than 600 ppm. or 0.6%.  Sufficient ventilation has to be provided during fruiting.


5.5              Plant Protection Measures

5.5.1        The crop is suspect to attacks from flies (sciarid, cecid) spring tails and mites.  Timely spraying with insect specific insecticides is needed. 

5.5.2        The crop is prone to fungal diseases.  Several competitor moulds e.g. Aspergillus sp., Cladosporium sp. and Fusarium sp., Rhizopus sp. have been reported to occur in the substrate used for cultivation.   Spraying with Bavistin or Benomyl is a recommended control measure.


5.5.3        The crop is also subject to diseases like yellow blotch, brown spot and bacterial rot, control measures which are needed include:


·                     Proper management of temperature and humidity during growing period.

·                     Regular application of chlorinated water containing 100 – 150 ppm of freely available chlorine at an interval of 3 – 5 days

·                     Application of oxytetracycline and streptocycline.


5.6              Harvesting and Yield


The right shape for picking can be judged by the shape and size of the fruit body.  The fruit bodies should be harvested before spore release, by twisting so that the stubs are not left on the beds (straw). It is advisable to pick all the mushrooms at one time from a cube and the next flush will appear at one time.


More than 500 kg. of fresh mushrooms per ton of dry wheat or straw can be obtained in case of crop produced in 45-60 days.


6.                  POST HARVEST MANAGEMENT


6.1              Storage


(A)               Short-term Storage


Fresh mushrooms are packed in perforated polythene bags which are directly sent to the local market situated nearby. Freshly harvested mushrooms can be stored at low temperature (0-50 C) for 1-2 weeks without loss in quality in case it is to be sent to the distant markets.


(B)              Long-term Storage


Dried mushroom with 2-4% moisture, can be stored for 3-4 months in sealed pouches without any change in taste. The dried produce can be rehydrated in luke warm water (40-500 C) within 20-30 mins. giving 80-90% of original weight.


6.2              Packing and Transportation


Fresh mushrooms are packed in perforated polythene bags.  Poly pouches containing crushed ice and overwrapped in paper are put in trays/baskets which are then covered with thin polythene sheet with sufficient perforation for proper aeration. The pre-packed pouches (250 or 500 g.) can be transported by roadways in trucks, buses depending upon the quantity to be transported.


6.3              Marketing


Domestic marketing does not pose a problem at present because only small quantities are being traded.  As production develops, marketing promotion measures will need to be undertaken to bolster the demand.


Export potential exists and needs to be taken advantage of by organizing cooperatives of producers linked to commercial units for processing fresh mushroom into dehydrated powder for export.


7.                  SOURCES OF TECHNOLOGY


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


(ii)                Plant Pathology Division, Dr. Yashwant Singh Parmar, University of Horticulture & Forestry, Solan, Nauni – 173230, Himachal Pradesh,

[Tel: (01792) 225 2315, 225 2344]






8.1              High quality commercial cultivation of the crop even on a small scale is a viable proposition as it is in good demand both in domestic and foreign markets.  The economics of a small unit with annual production of 400 kg is brought out below:  


Costs & Returns:


8.2              The cost components of such a model along with the basis for costing are exhibited in Annexures I.   A summary is given in the figure below.  Inclusive of 5% contingencies, the project cost works out to around Rs.50 thousand.


           (Rs. In thousands)

Project Cost


Land & Site Development




Plant & Machinery











8.3              The major components of the model are:


·                     Land Acquisition & Development: (Rs. 21.47 thousand):  On an average the cost of land can be put at Rs. 20 thousand in rural areas/forest areas in States like Uttaranchal, NE Hilly States etc.


·                     Building (Rs. 15.00 thousand):  This is the cost of high density polythene sheet growing room of 300 sq.ft.


·                     Plant & Machinery (Rs. 11.90 thousand per annum): This is the cost of setting up a sprayer room acquiring galvanised tubs, iron racks and thermometers.


8.4              Recurring Production Cost (Rs. 6.83 thousand):  Recurring production costs are brought out in Annexure II.  The main components are raw material like wheat straw or rice bran, chemicals, cost of power & water and packaging material etc.  Labour costs have been computed at Rs. 80 per man-day.  These can, however, vary from location to location depending upon prevailing wage level or minimum statutory wages fixed.  Recurring costs work out to Rs. 6.83 thousand per annum.  




Returns from the Project:


8.5              The yield from this unit would be 400 kgs. per annum.  Valued at Rs. 40 per kg. the gross return would be Rs. 16 thousand per annum.   Annexure III gives profitability calculations.


Project Financing:


8.6              Balance Sheet:  The projected balance sheet of the model is given at Annexure IV.  There would be three sources of financing the project as below:


                        Source                                                  Rs.Thousand


                        Farmer’s share                                               24.9

                        Capital subsidy                                               10.0

                        Term loan                                                        14.9                                                     Total                                                                49.8                            


8.7              Profit & Loss Account:  Annexure V presents the cash flow statement and Annexure VI projects the profit and loss account.   Gross profit works out to Rs. 9.2 thousand per annum. 


8.8              Repayment of Term Loan: The term loan will be repaid in 11 equated 6 monthly installments of Rs.1.36 thousand with a moratorium of 12 months. (vide Annexure VII).  The rate of interest would have to be negotiated with the financing bank. It has been put at 12% in the model.  The repayment schedule is given in Annexure VII-A.


8.9              Depreciation calculations are given in Annexure VIII. 


8.10          IRR/BCR:  The viability of the project is assessed in Annexure IX over a period    of 10 years.  The IRR works out to 17.14 and the BCR to 1.1. 


8.11          The Debt Service coverage ratio calculations are presented in Annexure X.  The average DSCR works out to 2.42.   


8.12          Payback Period:  On the basis of costs and returns of the model as assessed above, the pay back period is estimated at 6.36 years (vide Annexure XI). 


8.13          Break-even Point:  The break even point will be reached in the 3rd year.  At this point fixed cost would work out to 58.1% of gross sales - vide Annexure XII.