Oyster mushroom is the practical starting point for a farm family: it grows on wheat or paddy straw in a simple shed at 25 to 30 degrees C, needs very little capital, and gives a first harvest about 3 to 4 weeks after spawning. A tried costing from TNAU for a 10 kg per day oyster unit needs about ₹37,000 for the shed and equipment and about ₹2.2 lakh a year of running cost, and it breaks even at roughly ₹79 per kg if you pay for labour (about ₹43 per kg if the family supplies the labour).
Button mushroom gives a higher volume but needs a compost yard, pasteurisation and cool rooms (16 to 18 degrees C for fruiting), so it is a larger project. This guide compares the main types, then shows the growing steps, costs, break-even price, markets and MIDH subsidy. To see the subsidy and training pages, also visit our mushroom farming page.
Which mushroom should you grow?
| Type | Temperature and humidity | Cycle and yield | Who it suits |
|---|---|---|---|
| Oyster (Pleurotus) | 25 - 30 C, RH 80 - 85% | 40 - 45 days per crop; biological efficiency 100 - 150% (TNAU) | Beginners, small farms; all-year in warm areas |
| Milky (Calocybe indica) | 30 - 35 C, RH 85 - 90% | 45 - 50 days; BE 150 - 160%; needs a soil casing layer | Hot regions (TN, Karnataka, AP), summer crop |
| Button (Agaricus bisporus) | Spawn run about 23 - 25 C for 14 - 16 days; fruiting 16 - 18 C, RH 80 - 85% (ICAR-DMR advisory) | Needs composted substrate and casing soil | Seasonal in the north plains, year-round only with cooling; capital-heavy |
| Paddy straw (Volvariella) | Hot and humid | Short cycle, outdoor or shed beds | Humid regions with cheap straw |
Button mushroom is still the largest type (about 70% of Indian output in one recent breakdown), but oyster growers have moved states like Bihar and Odisha to the top of the production tables, according to ICAR-DMR data quoted in a 2025 review. "Biological efficiency" of 100% means 1 kg of fresh mushroom from every 1 kg of dry straw.
How oyster mushroom is grown (TNAU method)
- Spawn. Buy fresh grain spawn from ICAR-DMR Solan, a state agricultural university, KVK or a licensed producer. It is made on sorghum grain. Check the date of spawn: old spawn gives slow growth and mould. IIHR Bengaluru listed oyster spawn at ₹90 per kg in 2021 and needs 30 days' advance booking, collected in person.
- Substrate. Soak chopped paddy or wheat straw in water for 4 hours, then boil or steam for 45 minutes, drain and shade-dry until 65 to 70% moisture (squeeze: a few drops, not a stream).
- Bagging. Fill 60 x 30 cm polythene bags (80 gauge) in alternate layers of straw and spawn and make 10 to 12 small holes.
- Spawn run. Hang bags on ropes or racks in a cropping house. White mycelium covers the straw in about 15 to 16 days.
- Fruiting. Pinheads appear; spray water lightly so they do not dry. First pick is 3 to 4 days later, and three harvests follow at 5 to 7 day intervals. The whole cycle is 40 to 45 days.
The ICAR-DMR ready-to-fruit (RTF) bag is a simpler start for households: bags costing about ₹30 to ₹40 to produce and giving 600 to 800 g of mushroom each. IIHR has listed RTF bags of elm oyster at ₹40 (1 kg substrate) and ₹50 (2 kg substrate) in 2021. A 500-bag batch fits in a 200 sq ft room.
The growing room
- TNAU's costing uses a thatched house of 15 x 25 feet (375 sq ft) for 10 kg per day. A shed with thick thatch or a north-facing brick room stays cooler.
- Cross-ventilation and high humidity, no direct sunlight, and insect-proof net on windows. Floors should be washable or sprayed.
- Hygiene decides success: green mould (Trichoderma), flies and bacterial rot spread from contaminated straw and old bags. Remove contaminated bags at once, keep a separate area for spent substrate and clean between crops. Workers should wear a mask when handling mature mushrooms, as heavy spore loads can irritate the lungs.
Button mushroom in brief
Button mushroom uses compost made from straw, manure and supplements over about 3 to 4 weeks outdoors, then pasteurised in a chamber. After spawning, mycelium takes about 14 to 16 days at 24 to 25 degrees C, then a soil casing layer is added and the room is cooled to 16 to 18 degrees C for fruiting with RH of 80 to 85% (ICAR-DMR). In Punjab, Haryana and Himachal the crop is seasonal (winter), and year-round production needs chillers. Get training at ICAR-DMR Solan or a state university before investing.
Cost, break-even and profit (oyster, 10 kg per day)
TNAU's costing is the most complete public one; its input prices (labour ₹360 per day, spawn ₹40 per bag, straw ₹7,000 per tonne including transport) are older, so expect your actual costs to be higher. Figures below are TNAU's, arithmetic checked.
| Item | Amount (₹) |
|---|---|
| Capital: thatched house 15 x 25 ft, chaff cutter, boiler, drum, sprayer, stove | 37,000 |
| Yearly running cost: straw and transport ₹24,500; spawn 2,000 bags ₹80,000; bags ₹3,375; labour 1 person 300 days ₹1,08,000; others ₹5,000 | 2,20,875 |
| Fixed cost (interest 15% and depreciation) | 15,250 |
| Total yearly cost | 2,36,125 |
| Output 10 kg/day x 300 days | 3,000 kg |
Break-even price = 2,36,125 / 3,000 = about ₹79 per kg. If you supply the labour yourself, the cash cost is about ₹1.28 lakh and the break-even is about ₹43 per kg.
| Selling price (₹/kg) | Yearly income (₹) | Net after all costs incl. paid labour (₹) |
|---|---|---|
| 70 | 2,10,000 | loss of about 26,000 |
| 100 | 3,00,000 | about 64,000 |
| 120 | 3,60,000 | about 1,24,000 |
| 135 (TNAU assumption) | 4,05,000 | about 1,68,875 |
Trade guides report farm-gate oyster prices of about ₹80 to ₹120 per kg, while ICAR-IIHR itself listed fresh mushroom at ₹150 per kg in 2021. A 10 kg per day unit is also a full-time job, which is the reason most small growers start with a few hundred bags.
Where to sell
Sell to hotels, restaurants, vegetable shops, supermarkets and weekly markets in the nearest town; fresh mushrooms last only a day or two at room temperature, longer in a fridge. Sun-dried or solar-dried oyster keeps for months and can be sold as dried mushroom or powder. Avoid building capacity until you have at least two regular buyers. Mushroom is not covered by MSP and there is no fixed mandi price, so watch local wholesale rates.
Government support (MIDH)
| Component | Cost norm | Assistance (MIDH 2025 guidelines) |
|---|---|---|
| Low-cost / small-scale mushroom unit (about 200 sq ft) | ₹2 lakh per unit | 50% for infrastructure and inputs, maximum 5 units per beneficiary |
| Mushroom production unit | ₹30 lakh per unit | 40% credit-linked, back-ended subsidy for the private sector; 50% in NE and Himalayan states, Scheduled areas and some UTs |
| Spawn making unit | ₹20 lakh per unit | 40% credit-linked, back-ended (50% in special areas) |
| Compost making unit | ₹30 lakh per unit | 40% credit-linked, back-ended (50% in special areas) |
On a ₹2 lakh small unit, 50% assistance means up to ₹1 lakh per unit. The 2025 operational guidelines are dated 31.12.2024. Implementation is by state horticulture missions, so availability, application dates and the paperwork (bank loan sanction, project report) differ by state: ask your district horticulture office. Bank finance is available through your branch; see KCC and farm credit. Also check subsidy finder.
Sources
- TNAU - Mushroom Cultivation (Crop Production Guide, Tamil Nadu)
- MIDH Operational Guidelines 2025 (NHB)
- ICAR-DMR Ready-to-Fruit mushroom bag (PSA India)
- ICAR-IIHR - Revised rates of mushroom spawn, RTF bags and fresh mushroom (2021)
- ICAR-DMR Solan - Crop advisory
- Current status and future prospects of mushroom cultivation and research in India (CABI, 2025)