Economy, Business And Markets

Mushrooms in Hot Water, Despite Potential for Profits

Mushrooms in Hot Water, Despite Potential for ProfitsMushrooms in Hot Water, Despite Potential for Profits

Mushroom production is more often than not advertised as an easy investment opportunity that can, just like fungi, produce fruit in no time and allow the producer to benefit from its lucrative results.

Yet, the reality is very different and to run a successful business, an investor needs knowledge and expertise in the field, aside from the required capital, the Persian daily Forsat-e Emrooz reported.

Mohammad Hassan Afshar, chairman of the board of the Union for Mushroom Growers, said, “Consumption of the product is increasing across the world, which has created a reliable market for producers. Yet, due to adverse regulations and economic problems, Iran’s share of the global market is meager and our performance has so far been unsatisfactory.”

A majority of Iranians are not yet accustomed to eating either raw or processed mushrooms, which has also affected supply and demand.

“In the last Iranian year (March 2015-16), 118,000 tons of mushrooms were cultivated in Iran. This year, the figure is estimated to reach 140,000 tons. We need to plan accordingly for this surplus production, otherwise large amounts of it together with investments will go to waste,” he said.

According to the official, the solution to the abovementioned problems is to tap into the full potential that the media has to offer and promote mushroom consumption.

“This way we can increase the per capita consumption from the current 1.2 kilograms to the global average of 2.5-3 kilograms,” he said.

Afshar added that edible mushroom cultivation can create abundant job opportunities.

“A one-hectare apple orchard can create 4 jobs over a year, whereas in a same-sized area dedicated to mushroom cultivation, some 220 people can find employment. At present, nearly 450,000 people earn their living through the 690 licensed and industrial production units and over 5,000 unlicensed ones,” he said.

The capital needed to start a unit with a production capacity of 220 tons per annum, according to Afshar, amounts to 1.5 billion rials ($436,000 at market exchange rate). This excludes the money needed to buy the required land.

  Call for Gov’t Support

“Government support is what we need and by that I don’t just mean financial support. Providing the required infrastructures and doing away with obstructive regulations are what we need to pave the way for better production and entry into the international market,” he said.

Afshar asked for subsidies to be granted for mushroom exports, without which Iranian producers will not be able to compete in the global market.

“Last year, our exports stood at only 9,000 tons, whereas I believe, even under the current circumstances, we can export some 70,000 tons annually,” he said.

“Mushrooms bring with them a high added value since we can provide for 90% of the material needed to cultivate them inside the country and we have a relatively cheap workforce.”

Another mushroom farmer, Amin Rastegar, also stressed the importance of doing research beforehand and entering the business with adequate knowledge.

“That mushroom cultivation is pure profit is nothing but wishful thinking. To be successful in the business, technical knowledge of production must always be up-to-date,” he said.

“Due to wrong policies in recent years, the number of traditional production units that use non-industrial methods of cultivation is increasing by the day. This has the detrimental effect of disturbing the market balance and creating unreal prices,” he said.

Rastegar said high interests on banking facilities impede progress in the agriculture sector, mushroom cultivation in particular.

“Iran’s mushrooms are exported to Iraq. If we are seeking new export markets, we need refrigerated trucks and regular flights for the transport of this perishable product,” said Rastegar.