Colorado shoppers would see heaps more fresh mushrooms in grocery stores under a $5 million deal floated in federal bankruptcy court to revive a collapsed mega-farm in the San Luis Valley.
Colorado Mushroom Farm owner Baljit Nanda declared in U.S. Bankruptcy Court that he secured sufficient financing and will make a comeback.
But the workers who for three decades propelled his farm — women and men who fled war in Guatemala and speak the indigenous language Q’anjob’al — haven’t been paid for nine months. They’ve been scrambling to sustain themselves and their families since Nanda declared bankruptcy in December. Some now are creating an alternative, worker-run Sand Dunes Mushroom Cooperative.
Colorado Department of Labor and Employment investigators looked into what happened following news reports earlier this year. State enforcers have ordered back pay and are imposing penalties of $463,076 against the Colorado Mushroom Farm for illegally exploiting “vulnerable immigrant workers,” said Scott Moss, director of the agency’s Division of Labor Standards and Statistics.
The pay and penalties owed to 52 former workers will increase to $675,301 (about $13,000 per employee) if not paid by Oct. 21, Moss said.
Now, as Colorado Mushroom Farm seeks to come out of bankruptcy, its former workers face a dilemma: resume work under Nanda, or devote themselves to the cooperative.
“These workers have dreams, hopes. A lot of them are saying: ‘We don’t want to be abused, be taken advantage of – not being paid or being overworked,’ ” said Melissa Mata, whose husband worked at the mushroom farm. Mata now works with him as one of seven employees in the cooperative, which has received a state grant.
“Success is going to depend on sales and on revenues. The workers know this, and they know it’s going to be a struggle for a while,” Mata said. “This is about dignity and respect.”
One of the cooperative supervisors, Matias Francisco, said the choice feels like “a battle for our people,” over social inequities dating back decades, “and I’m not sure if we’re going to win or lose.”
At the latest bankruptcy court hearing on Sept. 29, Nanda unveiled a plan based on a loan of $5 million secured from Southern Cross Investment Management financiers in Britain. Judge Michael Romero laid out a path over the next few weeks to move out of Chapter 11 bankruptcy status.
“We are going to bring it back, make it a success, and get people working again,” Nanda told The Denver Post.
And his first priority, once loan money arrives, will be “to pay the employees,” he said. “We have to return to them what they’re owed.”
Nanda blamed the failure to pay workers on financial hardships caused by breakdowns of outdated equipment and $7 million in losses following the COVID-19 pandemic.
“It has been very challenging with the mushroom farm shut down and in Chapter 11. And, then, it has been challenging in the financial market to come up with the funding. But finally we have got it. I told the workers, as soon as the funding comes to us, they will get paid,” he said.
Colorado Mushroom Farm crews will install new equipment ordered from the Netherlands, Nanda said, planning to begin production with 120 employees in March 2024 and eventually expand to 220 workers. In the past, the farm produced up to 13 million pounds a year of portabello, crimini, and white button mushrooms delivered to groceries and restaurants along the Front Range, as well as Albuquerque and other cities in the Rocky Mountain West — ensuring a freshness that competitors in California, Texas, and Pennsylvania could not match.
U.S. Department of Agriculture researchers project that the $50 billion global market for mushrooms will exceed $55 billion by 2030. The value of mushrooms grown domestically tops $1 billion a year.
“When we start up, we want experienced employees who have been working here a long time so that we not spending our money on training employees,” Nanda said. “The reason why I have stayed focused on this is that I have a feeling for these employees. I want to start the farm back up and get them back to employment. This farm is vital to the local economy and vital for the employees.”
Located on a 51-acre site northeast of Alamosa, the Colorado Mushroom Farm, run by Nanda and members of his family since 1985, became the largest in the Rocky Mountain West and an economic mainstay in the San Luis Valley, Colorado’s lowest-income area, employing up to 260 workers.
In August, the workers began training to create a mushroom-growing cooperative under a pilot project. The Colorado Department of Agriculture has supported the effort with a $70,000 grant. The Denver-based AJL Foundation also has provided funds.
This month, workers moved from one leased parcel in Alamosa to a larger property with a warehouse. They’re planning to grow oyster and other specialty mushrooms — not competing directly with the Colorado Mushroom Farm.
So far, workers from six families are participating, said Minsun Ji, director of the Rocky Mountain Employee Ownership Center, a non-profit working to quadruple the share of wealth held by the lowest-income 50% of Americans.
Crowd-sourced donations to meet a $1.5 million target will be crucial for launching this enterprise, Ji said.
“We intend to scale up to hire more workers once we obtain a larger warehouse,” she said, estimating the cooperative eventually could employ as many as 200 workers. “It all depends on how much funding we raise. We are optimistic that we can pull it off.”
If Nanda reopens the Colorado Mushroom Farm, “this project will move forward anyway,” said Ji, who formerly taught politics at the University of Colorado in Denver.
It will make workers less vulnerable, she said. “There are many ways workers can protect their rights. Some form a labor union. Some form a worker cooperative. A worker-owned cooperative can protect their rights, create a sense of solidarity with other cooperative members, and also boost their income.”
