One of the largest commission merchants is Kirk Produce, which sells fresh strawberries under the brand names Sunshine, Sunrise, and Sundance, and processed berries, through a subsidiary, to Borden's, Kraft, Heinz, and Knott's Berry Farm. The company was founded by David Kirk, a prominent strawberry grower; a number of the other leading investors are strawberry growers as well. Kirk Produce contracts are such works of art that the lawyer who drafted them, Peter M. Gwosdof, has copyrighted them. In order to demonstrate that the sharecropper is not an employee of Kirk's, the contracts stress that "no partnership, joint venture, co-farming, tenant farming, or other business relationship" has been created. But elsewhere they make clear that when the "Independent Farmer/Grower" leases the land from Kirk and borrows the money to farm it from Kirk, he or she also must pay for utilities and irrigation through Kirk, grow berries that satisfy the quality demands of Kirk, and sell all those berries only through Kirk at a price determined solely by Kirk. Moreover, Kirk has the right to retake the land at any time and terminate the lease if the sharecropper's farming practices do not meet with Kirk's approval. Termination of the lease does not eliminate the debt.
Most of the sharecroppers who sign these contracts--which can be as long as thirteen pages, single-spaced--cannot read them. The contracts are entirely in English, whereas the vast majority of sharecroppers are Spanish-speaking farm workers who have little experience with legal documents. One study suggested that the average sharecropper outside Watsonville had the equivalent of a fifth-grade education. The Kirk contract recommends seeking "independent legal and/or accounting advice" before signing. But the opportunities for upward mobility are so limited among farm workers, and the desire to have one's own farm is so great, that farm workers are eager to sign such agreements. Only later do they realize the true cost.
Commission merchants have a very good deal. After lending their money to the sharecropper, they get money back in three ways: as payment for services rendered (Kirk supplies the plants, fertilizer, insecticides, and packing materials), as interest payments, and as repayment of the original loan. In addition, commission merchants charge a fee for every box of strawberries sold and often collect a cooling charge of a dollar a box. Sharecroppers must sell all their berries to their commission merchant, regardless of the price being offered. Sharecroppers often complain that they are not receiving the full value of their fruit. Often they are right. Every sharecropper I met in Santa Maria was receiving $5.00 a box for fresh berries, though the official market price ranged from $8.00 to $14.00 a box at the time.
The documents that Felipe later sent me revealed the kind of bookkeeping that often takes place. They stemmed from an investigation of his case by the Market Enforcement Branch of California's Department of Food and Agriculture. Over the course of eighteen months a commission merchant named Ag-Mart Produce was found to have overcharged or underpaid Felipe by $118,320.62. On days when the market price for strawberries was $8.75 a box, Felipe sometimes received $7.00, $5.00, or $1.74 for his boxes. On other days the commission merchant sold hundreds of boxes of Felipe's berries for which Felipe was paid nothing at all. By the time California's Department of Food and Agriculture made these findings, Ag-Mart Produce had stopped doing business in the state.
Some of the worst violations of state and federal labor laws are being committed by sharecroppers overwhelmed by the pressure to repay their debts. Even the most compassionate sharecroppers are in a bind: the workers often have to be paid at the end of each week, but the commission merchant usually pays for the sharecropper's berries every three weeks. The commission merchant also deducts service charges and interest payments directly from the sharecropper's check, so that little money may be left for the workers. As Kirk's attorney, Peter Gwosdof, explained in an interview, Kirk Produce is not a licensed "finance lender"; it obtains funds through a federal land bank, and is therefore exempt from state usury laws. Kirk can charge whatever interest it likes--though, Gwosdof assured me, Kirk does not profit from these loans. Bill Hoerger, a CRLA senior attorney, thinks the loans are designed to make the sharecropper appear to be a real businessperson. The commission merchants often don't need the loans to be repaid in order to make a profit. Under the old system, such loans were operating costs; under the new one, bad debts make good write-offs at the end of each year. One well-established strawberry grower, who finds the new sharecropping arrangements despicable, told me there's nothing new about the scheme. "Read Thomas Hardy's The Mayor of Casterbridge," he said, "for the best description of how this whole system works."
Two years ago California's labor commissioner cited Kirk Produce for failure to obtain workers'-compensation insurance for employees hired by one of its independent growers, Rudolfo Contreras. Kirk appealed the citation, claiming that Contreras was a self-employed businessman who used his own skills to complete a job after hiring his own workers and acquiring his own materials. The hearing officer ruled against Kirk, a decision later upheld by a superior-court judge and a state appeals court. "The [Kirk] agreements afforded Contreras no real opportunity to make a profit," the Second District Court of Appeals concluded. Regardless of what these contracts asserted, Contreras was essentially "a supervisorial employee"--not a self-employed entrepreneur. The large debts kept Contreras beholden to Kirk, the judges found, and "forced Contreras to do [its] bidding on a long-term basis."
Kirk Produce may now seek a review of this decision by the California Supreme Court. If the courts upholds the ruling that Kirk's sharecroppers are, in fact, employees, and not independent growers, then future litigation may erase their debts. Anne Hipshman, the attorney arguing on behalf of the state labor commissioner, believes that Kirk Produce has trapped these farm workers "in a form of servitude." Gwosdof, Kirk's attorney, denies the charge. He says that it is in everyone's best interest if the independent grower has a good year, and adds that the company is always on the lookout for "talented, successful growers."
Before signing with Kirk, Rudolfo Contreras had no previous experience as a grower or as a businessman of any kind. His agricultural background was gained picking apples, cherries, plums, and peaches for three years. During his vacations he had picked strawberries for a week or two each year. Although he was an "independent grower" for Kirk Produce, with a debt of about $70,000, his only personal assets were a pickup truck and an old tractor, both of unknown value.
While awaiting a definitive ruling on their status, sharecroppers struggle to repay what they can. Every sharecropper I met was in dire financial straits. A sharecropper often feeds his or her family by listing a phony worker on the payroll and keeping those wages. Visiting sharecropped fields at random, Iheard the same story again and again. I saw the same look of fatigue. Pedro was the only sharecropper I met who didn't seem distraught. He had a soft, round face and a moustache. He was thirty-six, but looked a decade older. He had picked strawberries for eight years, and then driven a truck. He said that one of his acres had flooded and was now lost for the year. The strawberries on his remaining thirty-four acres had been damaged by the rain. After six years of sharecropping Pedro was $125,000 in debt, most of it rolled over. I asked how he managed to run up so much debt. "I don't know," he said, shrugging. "All I know is I owe it." None of these disasters seemed to have affected his cheerful mood. What mattered most to him was providing work for his migrants and the pride of being his own boss. "I don't care anymore about material things," Pedro said as he surveyed the workers in his field, and plastic torn from beds flapped in the wind. "I'm a Jehovah's Witness."