Starting a Business in Mushroom Production

Mushroom (rice straw/banana mushroom) is a delicacy and is accepted as a vegetable It is rich in protein, vitamins, and minerals It is mixed in various food preparations. This can be sold both in the local and export markets.

Production Cost/Capital Outlay [2009 market data]

  • Mushroom spawn, 15 bags @P30/bag – Php 450.00
  • Wood for bed/plot frame – 2,000.00
  • Urea or ammonium sulfate, 1 kg – 21.00
  • Sugar, 1 kg – 30.00
  • Water (1 cu. m) – 23.05
  • Plastic packaging, 50 pcs @P2/pc – 100.00
  • Big basin or gasoline tank – 150.00
  • Plastic sheets, 6pcs @P25/sheet  – 150.00
  • Dry rice straws/dry banana leaves
  • Kakawate/Ipil-ipil leaves – 0.00
  • Weighing scale – 350.00
  • Sub-total – Php 3,274.05


  • Hammer – 200.00
  • Carpenter saw – 300.00
  • Nails (size: 3″ or 4″), 1 kg – 100.00
  • Sub-total – Php 600.00


  • 8 manhours x 2 persons (for plot setting and planting) – 760.00
  • 2 manhours (for harvesting and packaging) – 95.00
  • Transportation – 100.00
  • Sub-total Php 955.00

Estimated total investment cost – Php 4,829.05


  1. Select sites that are shaded and free from direct sunlight. Construct a bed or plot with a dimension of 30 cm x 300 cm. The bed must be supported by pegs placed on its four corners.
  2. Gather the basal portion of rice straws or dry leaves from standing banana trees and bundle them.
  3. Cut the bedding materials 45-60 cm long for each bundle.
  4. Soak bedding materials 3-10 hours in a big basin or a clean empty gasoline tank.
  5. Set the bedding materials. Press and compact the layer evenly.
  6. Wet the bed layer with urea or ammonium sulfate at the rate of 1-2 tablespoons per gallon of water. Add sugar to the solution at the rate of 33 g. per gallon of water to improve yield.
  7. Stop watering when the solution drips off the bed.
  8. Tip: The materials needed are chiefly agricultural leftovers. Most of these materials are readily found in the fields or in the neighborhood.
  9. Insert thumb-size spawns 5 cm deep, 10 cm apart on both ends and along the sides of the bed. Cover with a thin layer of kakawate or ipll-ipil leaves.
  10. Variation: Other materials that can be used as bedding include dry water lilies, jute sacks, legume straws, cornstalks, sugar cane bagasse, and abaca leaves.
  11. Set second layer by following the same procedure prescribed in preparing the first layer. Repeat procedure until six layers have been laid.
  12. Cover the bed entirely with plastic sheet or clean empty cement bags for 5 to 7 days, then remove.
  13. Assumption: 15 bags of mushroom spawns may be planted in 5 beds. Maximum of 10 kilograms may be harvested per bed in one month.
  14. Regularly inspect the beds. Place pan filled with water at the base of each peg to prevent ants or other insects from climbing and attacking the mushrooms.
  15. Harvest at button or umbrella stage or on the 13th day after planting. Beds will give three-days-a-week yield for one and a half to two months. Mushrooms in the button stage of growth are more succulent, hence they are preferred than the fully opened ones.
  16. Package mushroom in plastic bags on per kilogram basis. Perforate the plastic bags allowing air inside to maintain the freshness of the mushroom ready for market.
  17. Air-dry mushrooms that are not sold immediately. Dried mushrooms can be sold and command higher price.
  18. Tips: Do not use mushroom bedding more than once. Used bedding can be used later as compost for making organic fertilizers. Do not plant in the middle of the bed because mushrooms do not grow there.

Estimated Costing and Pricing

  • A. Direct cost (spawns, urea, sugar, water, packaging, labor) – 1,479.05
  • B. Indirect cost (materials, equipment, transportation, others) – 370.84
  • C. Production cost (A+B) – 1,849.89
  • D. Product pricing (C+30% mark-up) – 2,404.86
  • Estimated selling price/kilo (D/50 kg – 48.10
  • Market price/kilo = P100.00 or more

Registration Requirements

  • Business name registration (
  • Mayor’s/Business Permit (check your local municipality/city)
  • BIR TIN (

Financing Facility

  • Agricultural Credit Council (

Technical Assistance (Training and Seminar)

  • DA-BPI ([02] 524-0779/7909/7678)

source: DTI-PTTC


  1. By Bernadette M. Hurtado


  2. By Wenang


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