By Kerry Klein
Months after announcing thousands of layoffs due to bankruptcy, buyers are emerging for the 15,000 acres of mature fruit trees owned by Prima Wawona.
The company was one of the largest stone fruit producers in the country. The layoffs of more than 5,400 employees, the majority of whom are seasonal, went into effect earlier this month after the company revealed it was hundreds of millions of dollars in debt.
Some experts also say the layoffs are part of a broader trend of disruption to farm work that has gradually been displacing workers for decades as agricultural land is repurposed, drought becomes an increasing challenge, and automated machines replace people.
Since the layoffs were announced in January, elected officials, city governments and community organizations throughout Fresno County have rallied to provide those laid off with training and networking opportunities through job fairs, resource fairs and information sessions.
History of Prima Wawona
Prima Wawona, which grew, packaged and distributed peaches, nectarines, plums and apricots, formed in 2019 by a merger between Gerawan Farming and Wawona Packing. A press release announcing the deal referred to both as “third-generation family businesses” and “industry-leading companies.”
The newly formed company was owned by private equity firm Paine Schwartz Partners, which had purchased Wawona Packing a few years prior. At the time of the merger, the Fresno Bee reported the company was valued at over a billion dollars.
Then, last October, the company filed for bankruptcy. Documents filed as part of that case showed the company was $678 million in debt and later would be liquidating its assets after failing to find a buyer willing to offer more than $275 million.
In a document filed in bankruptcy court in December, Negocios Libertad – a company listed as owning 25% of Prima Wawona – alleged “massive overspending, an utter lack of business judgment, self-interested transactions,” and decisionmaking that was beyond the scope of the company’s leadership.
Negocios Libertad is run by Dan Gerawan, the long-time CEO of Gerawan Farming, who served briefly as CEO of Prima Wawona before being replaced in 2020. He filed his own lawsuit against the company in 2021.
A spokesperson for Prima Wawona declined to respond to Negocios’ statements or answer other questions posed by KVPR.
‘You’re going to see family farmers fade away’
Mark Borba, a fifth generation farmer in Central California, said the company’s failure is one example of what can happen when an out-of-town investment company – in this case a Manhattan-based investment firm – buys up San Joaquin Valley farmland.
“If you're going to come in and buy a perishable commodity like tree fruit, you’re going to fail,” he said. “Farming is not only [a] daily, but hourly decision process…You can't run it once a week or once a month and you sure as hell can't run it from New York City.”
As more small farmers leave agriculture and their land gets snatched up by corporations looking to turn a profit, Borba fears more and more ag operations could go under, leaving farmers and farmworkers looking for work.
“You're going to see large consolidations that are going to be owned and managed probably by not people with boots on the ground,” he said. “I think you're going to see family farmers fade away.”
Unionization efforts failed
Prima Wawona announced in January it was issuing layoffs to 5,411 employees, 98% of whom are seasonal, by March 12.
The actual effect on jobs, however, could be much larger, due to the ebbs and flows of planting and harvest. Documents filed in federal bankruptcy court stated Prima Wawona employs “on average more than 8,000 employees throughout a calendar year,” including farmers, harvesters, warehousers, packers and shippers.
Seasonal farmworkers represent an essential part of agricultural labor, but they are not commonly afforded many of the labor rights employees of other industries see. In this case, workers had not been allowed to unionize.
Prior to the 2019 merger, farmworkers at Gerawan Farming had for decades been involved in a labor dispute with their employer after attempting to unionize. In a 2018 ruling, the state’s Agricultural Relations Labor Board determined the company had engaged in “bad faith ‘surface bargaining’” and had violated state labor laws by excluding contracted workers “from the terms of any collective bargaining agreement.”
The board ordered Gerawan Farming, which still exists as a subsidiary of Prima Wawona, to pay a “makewhole remedy” back to employees. A November court filing listed the payment – which has not yet been paid – as $1 million.
Antonio De Loera-Brust, a spokesperson for the labor organization United Farm Workers, said these last few months would have proceeded very differently if the workers had belonged to a collective bargaining agreement.
“If this was a union company…we would have real legal standing to fight for these workers to get better severance pay, to get buyouts, to get all the things that workers, who have contributed their bodies and years of their life to the agricultural industry, would deserve in a situation like this,” he said.
Helping workers withstand industry disruptions
Mass layoffs from major agricultural players like Prima Wawona don’t happen very often, said Marco Lizarraga, Executive Director of a non-profit that works with farmworkers called La Cooperativa Campesina.
“It's a very painful experience and it saddens me to see it,” he said.
Many of those laid off may eventually be able to continue working the same fields that have been auctioned off. At least 5,000 acres have been bought up so far, according to court documents. Labor will still be required to harvest that fruit and bring it to market.
Still, Lizarraga said these layoffs are a part of “a continuous silent dislocation” of farmworkers as demand for their labor shifts.
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