["Australian Journal of Agricultural and Resource Economics, Volume 70, Issue 2, Page 363-379, April 2026. ", "\nABSTRACT\nMushroom cultivation is rapidly gaining prominence as a sustainable farming system. However, it generates substantial quantities of spent mushroom substrate (SMS), posing challenges for waste management and environmental sustainability. Therefore, developing circular bioeconomic approaches is crucial for the sustainable management of SMS. This study examines the SMS management approaches practiced by mushroom farmers in Odisha, India, and the factors influencing their management choices as well as their impact on mushroom productivity. It was observed that farmers primarily practice three SMS management approaches: farm‐site deposition, composting and distant dumping. The results of the multinomial endogenous switching regression (MESR) model indicate that factors such as education, farming experience, access to extension services and infrastructure significantly influence the choice of SMS management approach. These management approaches were found to have a significant impact on mushroom productivity. The study recommends policies that promote waste management infrastructure aligned with circular bioeconomy principles, fostering sustainable mushroom farming.\n"]