ISSN 2039-2117 (online) ISSN 2039-9340 (print) Mediterranean Journal of Social Sciences MCSER Publishing, Rome-Italy Vol 7 No 1 S1 January 2016 406 Prospects for Increasing Commercial Mushroom Production in Malaysia: Challenges and Opportunities Rosmiza MZ School of Social, Development and Environmental Studies, Universiti Kebangsaan Malaysia Email: miza@ukm.edu.my Davies, WP Royal Agricultural University, United Kingdom Rosniza Aznie CR School of Social, Development and Environmental Studies, Universiti Kebangsaan Malaysia Jabil MJ Ethnography and Development Research Unit, Universiti Malaysia Sabah Mazdi M Department of Geography and Environment, Universiti Pendidikan Sultan Idris Doi:10.5901/mjss.2016.v7n1s1p406 Abstract One of the benefits of mushroom cultivation is their potential contribution to a more sustainable and environmentally-friendly way of farming. Mushroom cultivation using an agricultural waste as a growing medium, and the subsequent use of spent substrate has high value for horticultural activity; organic fertilizer; and potential utilise for animal feeding. The value of mushroom to diets, coupled with reported medicinal properties, can also provide valuable additional new small and medium- scale business options. This study attempts to evaluate the mushroom industry prospects in Malaysia. It also explores issues and challenges facing the mushroom industry in Malaysia by using a critical analysis and SWOT analysis. The main challenges include poor supply and the increasing price of raw material, for example sawdust; the poor quality of mushroom spawn, and the threat of diseases and pest attack. Several strategies are discussed to potentially improve the productivity of mushroom cultivation in Malaysia. Keywords: agricultural residues, environmentally-friendly, Malaysia, small and medium enterprise, spent mushroom substrate Introduction 1. The desire for greater sustainability; improving food security by increasing diversity; and developing more reliable sources of income especially for small-scale farmers, suggests mushroom farming may be one of the viable options. It provides an efficient and economically-viable biotechnology (Bradley, 2013), which can give consistent growth with high biological efficiency (Jonathan et al., 2012). Mushrooms are suitable for fresh consumption, pharmaceutical-use and cosmetic production (Ministry of Agriculture Malaysia, 2011; Mohd Tarmizi, 2013). Edible mushrooms are highly tradable commodity, and their cultivation is becoming increasingly successful in many regions because of prevailing external climatic conditions; short growing times; very low inputs requirements for production, and easy production technologies. Other attractions include where land is also a limiting factor, low investment needed, and where agricultural residues are abundantly available (Marshall & Tan, 2009; Bradley, 2013). Asian countries produce more than 74.64% of world mushroom markets followed by Europe (19.63%) respectively in 2014 (FAO, 2015) (Figure 1). In recent years, about 40% of total world mushroom are exported from China as the world’s biggest producer of mushroom. However, 95% of the total China production is for domestic consumption (Zhang