Guatemalan workers left in a lurch without pay after the Colorado Mushroom Farm collapsed into bankruptcy are exploring a remedy to regain their jobs and boost the San Luis Valley’s ailing economy: run the company themselves as a worker-owned cooperative.
A recent survey by Rocky Mountain Employee Ownership Center found 80% of the farm workers — who have been struggling since the shutdown of the farm, one of the largest employers in Colorado’s lowest-income area — are interested.
But paychecks would have to be guaranteed, said Pedro Itzep, 40, who worked at the farm with his spouse, relying on their wages to support their family. Only with a new ownership structure would they return, Itzep said. “Nobody wants to work for free. How do workers live for six months with no pay?”
It’s unclear whether the current owners — though they’ve filed for bankruptcy and are mired in debts, a federal lawsuit, and alleged environmental violations — would assent to a takeover by workers.
Workers around Colorado over the past three years have created scores of employee-owned enterprises, which can receive state support. Proponents tout these arrangements as a way to increase social justice by reducing the exploitation and mistreatment of workers. Gov. Jared Polis has supported the concept. In metro Denver, more than 1,000 ridesharing workers are in the process of organizing a worker-owned driver cooperative.
“Coops are a proven way to build wealth in low-income people and support local economic development with a locally rooted business,” said Minsun Ji, director of the Rocky Mountain Employee Ownership Center, a Denver-based nonprofit, who recently met with the uprooted Guatemalan farm workers.
The idea is that workers, as owners, collect payment for their labor as well as profits, then invest a portion of their individual earnings to sustain their enterprise.
In the San Luis Valley, initial conversations with 80 of the workers revealed most would return to work under a new ownership structure if possible, Ji said.
“These are workers who have experience at the farm, who worked there for many years. They’re skilled workers. They know what to do. These are excellent conditions for the workers to be able to take over this farm,” Ji said, acknowledging that some workers’ immigration legal status remains uncertain.
“Creating a worker coop is one of the best strategies to protect undocumented workers so that they are not exploited,” she said.
The Colorado Mushroom Farm, located on a 51-acre site northeast of Alamosa, has supplied fresh Portabella and other mushrooms to restaurants and grocers around the Rocky Mountain West for nearly 40 years. It has employed up to 260 workers, mostly Guatemalans who speak an indigenous language, producing up to 13 million pounds a year.
It collapsed in June, despite receiving $1.7 million in COVID aid — owing on loans, delinquent on taxes, under pressure from the U.S. Department of Justice to pay more than $137,000 for mushroom marketing to the U.S. Department of Agriculture Mushroom Council. More than 100 workers lost their livelihoods when the operation shut down. The workers and their families have been scrambling to find other work, relying on San Luis Valley communities that stepped up to help them pay rent and utility bills and supplied emergency boxes of food.
Some workers weren’t paid wages owed for months as mushroom farm owners explored re-organizing under a Chapter 11 bankruptcy filing in late December. The RMEOC survey estimated total unpaid wages in November between $81,100 and $169,460. That information was being compiled into a report this week by the RMEOC, which receives support from foundations and from Colorado’s Office of Economic Development and International Trade.
Colorado mushroom magnate Baljit Nanda, who began running the farm (previously called the Rakhra Mushroom Farm) in 1985, told the Denver Post his top priority is paying workers. He anticipated all would be paid by the end of January, contingent on a loan coming through. While Nanda acknowledged an employee buyout for conversion to a worker-owned cooperative could be an option, he said he plans to pay off debts, resolve a wastewater discharge issue with state environmental inspectors, and install the latest Dutch technology to revive the company.
One former longtime worker, who spoke on condition of anonymity, was ambivalent about the economic viability of a worker-owned enterprise.
“You become the owner. But, then, where is the money going to come from in the beginning? Maybe you’re not going to get paid,” he said. “Everybody would have to get paid. It takes 65 days to grow the mushrooms.”
Some former farm workers “are very loyal” to Nanda, Ji concluded. “But he has struggled so much financially over the years that he could not pay the workers.”
Former worker Felipa Zacarias emphasized that “we want to work, but not if there’s no pay.” Zacarias liked the idea of a worker cooperative, she said. “I liked working at the farm. The work was easy.”
Gov. Polis in 2019 established a commission charged with making Colorado a leader in worker-owned enterprises. A Colorado Employee Ownership Office provides technical support and services for companies considering worker ownership. “Employee ownership can make sure everybody thinks like an owner. You care more about the success of a company when you have a stake in it,” Polis said in a state-produced promotional video.
Since 2020, 18 companies that received state support have converted to employee ownership, and three more will be announced over the next month, a state spokeswoman said. Previously, one or two companies a year were converting to employee ownership.
Among companies in Colorado that have converted to become worker-owned: Truce Media, Fancy Tiger, Stoneage Inc. and Flyin’ Miata. If the 100 or so mushroom farm workers create a new worker cooperative, it would be one of the biggest. The rideshare Drivers Coop, taking shape as a way to boost pay for ridesharing workers, involves thousands of workers and would be the largest cooperative if it launched as planned.
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