From Rs 500 to Rs 3 lakh a month, how this farmer built a mushroom business from a small room

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By the time Mahesh Hanumant Kolur completed his diploma in agriculture from Bagalkot University in Karnataka, he had decided to become a mushroom entrepreneur. After a one-day mushroom cultivation training, he purchased a kg of oyster mushroom spawns (seeds) for Rs 65, cleaned up a 10 ft x 10 ft room in his house and put up 30 bags on a trial basis in 2021. “My total investment along with wheat straw, spawns and polybags was under Rs 500. However, ten bags were contaminated because I had no practical experience. The remaining bags yielded around 500-600 grams each, giving me 10 kg of mushrooms," Mahesh tells 30Stades . He sold the harvest in the local market at Rs 180-220 per kg, earning nearly Rs 2,000 from his first production cycle, which took about two months. “That gave me the confidence to continue,” he adds. Preparing bags for oyster mushrooms. Pic: Mahesh HK Mahesh kept experimenting, improving his cultivation techniques, and eventually began adding value. Today, his mushroom enterprise operates from a 600 sq ft unit, processes most of its harvest into premium products and generates a monthly turnover of around Rs 3 lakh, of which Rs 2 lakh is profit. Also Read: MBA quits Qatar job, builds Rs 1 crore mushroom business in 2 years in Bengaluru After the initial round Mahesh invested the Rs 2,000 he earned for preparing 200 bags. By then, he had learned more about hygiene practices and better understood moisture and temperature management. The results of the second round were good. “After three months, I harvested around 250 kg of mushrooms, which sold at an average price of Rs 300 per kg in the local market. I learnt mushroom farming mainly through trial and error,” he says. The hanging system makes efficient use of small space. Pic: Mahesh HK In 2022, he also began cultivating milky mushrooms, another variety suited to local climatic conditions. “Oyster and milky mushrooms are ideal for low-cost, year-round cultivation because they do not require expensive AC setups. Since I do not add any chemicals, the products are organic,” Mahesh explains. Moreover, both oyster and milky mushrooms sell at higher rates than button mushrooms, which get a wholesale rate of only Rs 80 to Rs 100 per kg in the winter months. Also Read: Bihar farmer earns Rs 25 lakh a month from 6,000 sq ft mushroom unit, trains others for free Value addition became the turning point While fresh mushrooms were selling well, Mahesh soon realised that processing them into value-added products could significantly improve profitability and reduce wastage. He spent nearly three months developing his first product, which were mushroom cookies. They were prepared using organically grown oyster mushrooms, ragi (finger millet) and jaggery instead of refined sugar. Milky mushrooms do not require AC. Pic: Mahesh HK "I first distributed the cookies among friends and family. They appreciated the taste. Later, I got them tested in a laboratory, and the reports suggested they had a low glycemic index, making them a good option for health-conscious consumers as well as diabetics," says Mahesh. Encouraged by the response, he began selling the cookies in local markets. “Every Saturday, I began travelling from Bagalkot to Bengaluru to participate in organic farmers' markets, where consumers buy directly from producers. That created a good market for me. I continue to sell there even now,” he says. Expanding from 100 sq ft to 600 sq ft As demand increased, Mahesh expanded his operations. In 2023, he established a 30 ft x 20 ft mushroom production unit with a capacity of 1,000 mushroom bags at different production stages. Also Read: Mango Mushrooms and Women Farm Revivers Instead of placing bags on shelves, Mahesh suspends them vertically in groups of five. The low-cost hanging system makes efficient use of vertical space, makes harvesting easier and increases production without expanding the growing area. Dried oyster mushrooms sell at Rs 2500 per kg. Pic: Mahesh HK Today, the unit produces around 50 kg of oyster and milky mushrooms daily. However, only a small portion is sold as fresh produce. "Fresh mushrooms have a limited shelf life and limited market price. That's why we process about 45 kg daily into value-added products. We aim to build a healthy organic food brand rather than simply sell mushrooms," he explains. Multiple products from one crop Around 45 kg of mushrooms harvested every day are converted into mushroom cookies, mushroom chakli, pickle, mushroom powder and dried mushrooms. “The dried mushrooms are particularly popular for use in biryani and soups, while mushroom powder is increasingly finding demand among health-conscious consumers,” he says. Fresh mushrooms are sold at Rs 400 per kg, mushroom pickle at Rs 150 for a 200-gram pack, and mushroom powder at Rs 500 for 200 grams (Rs 2500 per kg). According to Mahesh, value addition improves returns many times over. "One, there is no wastage if crop remains unsold. Two, many people don't eat mushrooms directly, but they readily consume cookies, soups or snacks made from mushrooms. Three, the rates increase many times with processing,” he says. Mahesh sells his products through multiple channels instead of depending on wholesalers. “Besides farmers' markets, I also supply to local outlets, tea stalls and hotels,” he says. He currently sources mushroom spawn from a laboratory in Hubballi and plans to further expand production capacity in the coming months. Mahesh also provides training to aspiring mushroom growers. (Rashmi Pratap is a Mumbai-based journalist specialising in financial, business and socio-economic reporting.) Also Read: From 100-sq ft to Rs 2 crore turnover, how a realtor built a mushroom business Look up our YouTube Channel