A workers’ co-op rises from the remains of a Colorado mushroom farm

Sunday, May. 19, 2024

Story first appeared in:

ALAMOSA — Over decades starting in 1985, the Colorado Mushroom Farm northeast of Alamosa sold millions of pounds of mushrooms grown and harvested within the building’s dimmed cavern to grocery stores in Colorado. Along the way it offered year-round employment to generations of migrant workers, many of whom came here from Guatemala fleeing civil war and searching for a better economic future. 

But when the farm filed for bankruptcy in December 2022, it owed thousands of dollars in unpaid wages to employees, some of whom had been subjected to unsafe working conditions and were injured on the job. 

Complicating the situation, a mix of documented and undocumented workers were employed by the farm. Without their jobs, many were left powerless, ineligible to receive basic survival benefits and in fear of being deported if they spoke out about what they describe as abuses by the farm’s owner, Baljit Nanda.

Now, some of those workers are taking charge of their futures with the help of a powerful coalition of nonprofit and government supporters as well as the Rocky Mountain Employee Ownership Center, which works to dismantle economic systems that benefit a small few at the expense of many, especially working-class communities and communities of color. 

It’s an American Dream in the making, says Alece Montez, co-executive director of the AJL Foundation, which came to the aid of the mushroom workers after they were forced out of work. But not without funding for an employee-owned mushroom co-op and the workers learning to navigate the hurdles of business ownership in a system that favors wealthy white entrepreneurs. 

Reeling after an employer’s abrupt shutdown 

Montez said Nanda compounded his former employees’ problems by being “very elusive about the farm actually being bankrupt” in September and October of 2022.  

By then it was closed and the workers weren’t getting their final paychecks, she said. Flora Archuleta, the executive director of the San Luis Valley Immigrant Resource Center, reported some were “sitting on three or four checks” they weren’t able to cash. Others were owed vacation time and one $10,000 in unpaid wages.

But Montez said some workers didn’t want to open unemployment cases, because they feared being deported or blocked from working for Nanda again should the mushroom farm, where portobello, crimini and button mushrooms were grown, ever reopen. As time passed and the situation became dire, they needed help.

So Montez joined forces with a community outreach coordinator named Matias Francisco, who had deep ties to the mushroom farm and its workers. And together they began mobilizing efforts to help the growers and pickers, who would soon find themselves with a chance to shape their future. 

An insider supporting his people 

Francisco didn’t ask to become the farm workers’ leader, but in some ways he was a natural fit. 

Though never an employee, he migrated with his parents from Guatemala when they came to work at the farm in the 1980s. He knew the perils of farm labor having grown up around the workers. And he had good relations with many of them through his job doing outreach for Valley-Wide Health Systems in Alamosa. But when he offered to speak with Nanda on their behalf, “the workers were like, ‘No, Matias. Peace talks are over,’” he said. So he took a different path.

Francisco is an energetic organizer with a warm demeanor and easy smile. He is prone to spontaneous bouts of laughter as well as tears — “I’m a crybaby!” he says. He is trilingual, speaking English as well as Spanish and Q’anjob’al, the Indigenous language of the Mayan mushroom workers. 

These qualities make him easy to open up to. In the decade or so that he’s been assisting migrant workers by encouraging them to take advantage of government-funded medical screenings, passing out health kits, or helping uninsured families get discount cards for health services, he has become invested in their stories of abuse and disempowerment. 

The Colorado Mushroom Farm was a big offender, Francisco said. Federal records show the facility left employees at risk of being burned, shocked, electrocuted or falling. Terrible injuries occurred during production. And in a tragedy that stands out for Francisco, a woman was run over by a forklift. She survived and her son later worked for Nanda. “That’s why it’s not just a warehouse,” he said of the farm. “It has a story to it because the parents that worked here, their kids struggled. My own mom was always working, but we couldn’t afford running water. It’s so deep,” he said of the trauma. “It’s so, so deep.”

In the weeks following the farm’s closure, Montez said approximately 100 to 120 families faced an employment crisis, wage theft and a housing crisis after a local mobile home park housing mostly Guatemalans went on the market. The total number of families that lost their jobs over a year-long period was closer to 200, she added, or the equivalent of 14,000 jobs in the Denver Metro area.

The San Luis Valley Housing Coalition eventually raised the money to buy Century Mobile Home Park. But Montez said getting the workers money to cover food, rent/mortgage, utilities, internet, gas cards and basic needs would remain a problem because many lacked identification, were worried about their legal status, had language barriers or had no transportation.

The nonprofit Bondadosa delivered food to 125 families of four for one to two weeks. Some of the displaced workers found jobs elsewhere in the valley, but they were owed months of back pay and struggled to keep up financially. 

As winter began to settle over the San Luis Valley, the farmworkers became more desperate for long-term answers. Montez reached out to Mike Roque, then-executive director of the San Luis Valley Community Foundation. And he contacted Ji of the Rocky Mountain Employee Ownership Center to discuss a seemingly radical idea. 

A co-op started by displaced workers 

The RMEOC grew out of the belief that a just economy “works for everyone, is built upon inclusive and sustainable systems, and provides equitable opportunity to build wealth.” 

The current economy benefits too few at the expense of too many, RMEOC believes, but employee ownership can change that. 

Ji became the center’s executive director in 2022. A community-labor organizer and popular educator on labor and cooperative issues, she founded Denver’s first immigrant workers’ rights center, El Centro Humanitario para Los Trabajadores. And she is in the midst of launching the largest-platform worker co-op in Colorado, the Drivers Cooperative, to support rideshare drivers whose wages are about $5.50 per hour after costs. Through the co-op, drivers will take 80% of fares, while they are currently only getting 25% to 30% from Uber, she says. (She also helped The Colorado Sun navigate its conversion to an employee-directed nonprofit, though has no influence on its journalism.)

“After the laborers were kicked out of the mushroom farm, we were contacted by multiple people because we are experts in that regard,” Ji said.

Worker co-ops have become more popular since the global crisis in 2008 as more U.S. cooperative activists and community organizations have created economic development strategies, she added. “Before the crisis, the majority of community organizations didn’t see it as a new alternative economy strategy, but things have changed dramatically since then. While there were less than 100 worker co-ops in the U.S. before 2008, currently there are over 612, with hundreds on the way.”

These co-ops have also gained popularity because they’re more resilient to economic shocks, experience lower turnover among workers and have higher productivity levels than traditional businesses, says Merrit Stüven, who researches job quality and economic security for the Aspen Institute.  

When Roque asked Ji to help organize the farm workers, she began a feasibility study to assess the viability of converting the Colorado Mushroom Farm into an employee-owned cooperative. 

Ji did two studies, one assessing the potential for workers to purchase the farm and another in which a mushroom farm co-op would be created from scratch.

The first study determined success was possible with the sale of the Colorado Mushroom Farm to the workers, installation of Dutch growing equipment and the ability to access approximately $10 million to $12 million in startup financing, including money to buy the property and prepare it for cultivating mushrooms. 

But an advisory committee consisting of community members, state staff from the Department of Local Affairs and Office of Economic Development and International Trade, and Jason Medina, who took over for Mike Roque at the San Luis Valley Community Foundation, pushed for the pilot project “as it may have taken a long time for us to find a way to purchase the Colorado Mushroom Farm because it went bankrupt,” Ji said. 

They decided to go with the four-year pilot program in which workers will spend two years learning all aspects of the business and growing the mushrooms in a temporary space before purchasing land, building a warehouse and hiring 20 to 30 employees in years three and four. 

The Sand Dunes Cooperative was set up as a Limited Cooperative Association so that all of the workers are included in the ownership of the business, Montez said. This structure takes advantage of an element of U.S. immigration policy that allows undocumented people to own a business even if they can’t legally work for it.

Immigrants Rising, which works to nudge the nation “closer to fulfilling its ideal as a land of opportunity and access for all,” says all immigrants, regardless of legal status, are able to earn a living as independent contractors, or start a business using a taxpayer identification number or Social Security number. They must pay self-employment tax and income tax. But as mandated by the Immigration Reform and Control Act of 1986, a client “is not required to obtain Form I-9, or otherwise inquire about immigration status from independent contractors or sporadic domestic workers.”

At $1.7 million, the budget for the pilot project was a fraction of what was estimated for the mushroom farm purchase. But Francisco recalls difficulty getting workers to buy-in. 

“We have a workforce, we have demand, now let’s bring the workers,” he recalled thinking. But some people were so busy trying to survive after the mushroom farm closed, they couldn’t join the co-op for training. “We tried doing webinars and other things,” Francisco said, but in the end, from a group of 80 who’d expressed initial interest, only five remained (although now there are eight).

“But that was OK,” Francisco said gleefully. “This is the team that’s going to make this project. This is the team that’s going to teach other people. This is the team that’s going to put the mushroom co-op on the map.” 

The problem with “unearned advantage” 

One of the many things that stand out about the Sand Dunes Mushroom Cooperative is the collective power of the organizations backing it.

Supporters include the Community Foundation of San Luis Valley, San Luis Valley Area Health Education Center, San Luis Valley Immigrant Resource Center, city of Alamosa, San Luis Valley Agricultural Coalition, First Southwest Community Fund, First Southwest Bank, and Office of Economic Development and International Trade and Department of Local Affairs.

There’s also the Colorado Health Foundation, Gates Family Foundation, Kenneth King Foundation, AJL Foundation, Philanthropy Colorado, SLV Funders Cohort, Caring for Colorado, Madhe M & Joseph T Mohar Charitable Foundation, anonymous donors and others. 

Initial funding came in fits and spurts — a thousand here, a thousand there. One anonymous donor chipped in $75,000. Caring for Colorado has provided $20,000, Colorado Department of Agriculture provided a partial payment from a $48,000 grant and Mohar provided $45,000, Montez said.

She added Medina, from the community foundation, “has been a critical piece in making this come to fruition and to actually be a reality. He gave confidence to funders to be willing to fund a group like this. They weren’t technically a 501(c)(3), and even now as a worker cooperative, they’re not a 501(c)(3) but they’re not quite a for-profit either. So it’s, like, defying the odds of what can get funded.”

Meanwhile, the co-op’s “Denver team,” consisting of Ji, Montez and independent journalist Bill Adler, has been helping them navigate everything from locating a suitable warehouse, to paying for supplies, to invoicing for work they’ve been doing, all of which is happening as they work the new jobs they were forced to find after the Colorado Mushroom Farm closure.  

Montez calls the stakeholders’ help “good old-fashioned community wraparound support” and says as far as she knows, the Sand Dunes Cooperative is unique in Colorado. 

But, she adds, a “slew of barriers, some very specific” to “a marginalized group that doesn’t have access to privilege and unearned advantage,” have popped up, causing significant delays in the co-op’s progress.

The co-op needed a warehouse to start growing mushrooms, and they found one to rent for $2,000 a month. But the warehouse needed power, and despite repeated attempts by Francisco to reach Xcel for service, the utility never responded, Montez said. “Why? Because this is a group with no clout, no money and no power.” And yet a few weeks ago when representatives from Sen. Bennet’s office called on their behalf, she said, “sure enough, 20 minutes later, we got a phone call from Xcel.”

Regulations have been an issue as well, Montez said, with local officials requiring the workers to get a land-use permit and threatening to fine them for using water from a well designated for domestic use. “The co-op is hoping the county will allow them to purchase water elsewhere and have it delivered,” she added. “It will be a very minimal amount of water and nothing even close to what the Colorado Mushroom Farm used. But again, the warehouse is temporary, part of the pilot project. I would hate for them to expend their money on this as if it were a permanent site.”

Meanwhile, the money they have raised is dwindling. And one of the Denver team’s objectives was to pay the workers for training. “It was like none of you are going to do this work on the side,” Montez said. “We want to make sure you’re getting paid while you’re learning so you can dedicate the time. But that’s another unearned advantage. By being wealthier and white in America, you get this safety net of having ‘think time,’ without having to work three jobs just to put food on the table.”

Empowering workers incrementally 

Despite setbacks, the co-op has been moving forward with training, brainstorming sessions and more efforts at fundraising.

Along the way, they’ve settled on the kind of mushrooms they’ll grow — very different than the button, crimini and portobellos at the Rocky Mountain Mushroom Farm. Francisco says they will specialize in lion’s mane, blue oysters, chestnuts, pink elms, yellow oysters and king trumpets. 

They’ve been looking into different substrates they can use to cultivate their crops, such as straw, sawdust or manure, depending on the type of mushrooms they grow. 

And they’ve established their own business bank account, so they can start managing their own money.

Until Friday, Ji was optimistic that the The Latino Community Foundation of Colorado would award the co-op a $250,000 loan at 2% interest, which would have allowed them to buy land, build a warehouse and pay themselves “about $17 to $18 an hour,” a sizable jump above the $12.50 they earned while working for Nanda.

But the foundation opted not to, with the vice president telling Ji, “it appears that the advisory committee is not well aware of cooperative businesses yet, and it may take a while for these advisory committee members to understand how a co-op works,” Ji said in an email. “I told her that we would be happy to come out to educate them and hope they reconsider in the near future.”

On Saturday, Francisco texted his thoughts about the loss to The Sun. He said he was “pretty sure our team would have qualified as an agriculture/COOP,” and that he believes “not only the displaced workers but would benefit from the project but also the SLV community would benefit immensely.”

“Maybe we just have to work harder to show the need is there,” he added. “Maybe the lenders feel we are not ready for something like mushrooms. Maybe the lenders ran out of funds.

“But I know we will keep trying to keep looking into different ways to get funding” and “we’ll keep our (donation) website up, and look at different grants, loans and donations,” he said. “We have come so far and overcome so much as a team, we can’t look back and doubt ourselves.”

Only look forward

Back in February, The Sun stopped in to see the co-op’s progress. And true to their word, the eight owners, shivering against the cold in wool hats, fleece mittens and insulated jackets, were working toward their dream of prosperity. They were sanitizing the warehouse walls, covering them in plastic, preparing for the moment they could start growing and joking with each other in Q’anjob’al.

Meanwhile, Francisco revealed plans he had drawn for the interior of the warehouse. The lack of heat didn’t seem to bother him as he looked around the room and called out the names of the people he once knew as laborers but now as his partners. 

He smiled thinking of where they had come from and where they were going, despite the fact that they would likely not meet their original goal of growing mushrooms by April. They had hoped to be selling their lion’s manes and blue oysters at the local farmers market in May. But the electricity issues Montez detailed were holding them up. 

On a brighter note, he would say, “everyone here is documented now and they have work permits. In the beginning some did not, and the co-op was the best way to help them get the process started.” 

And he said the shelves he built should soon be filled with mushrooms. 

As he explained the vision he and his team were creating together, his voice rose with excitement. 

“If we do it right, we can fit about 150 substrates and grow about 450 pounds of mushrooms. Then if that goes well, I don’t see why we can’t produce 1,500 to 2,000 pounds a month. And I don’t think we should sell them for less than $13 a pound. You can fruit off the substrate four times. There’s someone who will buy our used substrate. We just gotta get this down to a science.”

“Once our team gets a feel for it, we can’t fail,” he added. “It’s gonna be so good, people will feel bad about not buying mushrooms.” 

Link to original article