Austyn Gaffney Story Archives - West Virginia Public Broadcasting

AppHarvest Was Touted As Appalachia’s Future. What Happened?

The start-up was built on the idea of using cutting-edge technology and local workers to produce vegetables on an industrial scale. And this was all set to happen in eastern Kentucky, where the company’s founder said this new version of agriculture could help replace the fading coal industry. AppHarvest got a lot of attention — from national media, politicians and investors. But then, last year, the company filed for bankruptcy.

This conversation originally aired in the Feb. 11, 2024 episode of Inside Appalachia.

When AppHarvest built its first greenhouse in 2020, it was touted as no less than the future of farming — and maybe Appalachia itself.

AppHarvest got a lot of attention — from national media, politicians and investors. But then, last year, the company filed for bankruptcy. Austyn Gaffney recently reported on AppHarvest’s downfall in a story for Grist and Louisville Public Media.

Inside Appalachia Host Mason Adams spoke with Gaffney to learn more.

The transcript below has been lightly edited for clarity.

Adams: AppHarvest has received a lot of media attention from the time it was founded. But for folks who haven’t heard of AppHarvest, can you tell us about the company?

Gaffney: AppHarvest was founded by a Kentuckian named Jonathan Webb in January of 2018, basically saying that, in order to revitalize the economy of central Appalachia, we needed to bring in more blue collar jobs. His vision for these blue collar jobs was a spattering of 12 giant greenhouses, which grew produce like tomatoes and berries and lettuce indoors. He built the first of those greenhouses in Morehead, Kentucky, in 2020, during the height of the COVID-19 pandemic, and then he added four more greenhouses over the next couple of years.

Jonathan Webb, founder and former CEO of AppHarvest.

*Credit: Jon Cherry/Grist*

Adams: AppHarvest checked off so many boxes that people talk about it when they talk about economic development and Appalachia. They touted decent paying blue collar jobs with benefits for locals, building out the local food system, diversifying the economy in a coal producing region — even leaning in on private investment, as opposed to just grants and public funding. Where did AppHarvest go wrong?

Gaffney: Based on my reporting, the biggest problem at AppHarvest seems to have was that it grew too big too fast. It went through 12 rounds of funding, raised over $800 million in seed and venture capital funding, along with loans from banks and national organizations like the USDA. That was before they built their first greenhouse. They also started planning on going public.

You mentioned private investment. They partnered with basically what is a blank-check company for the purpose of joining the stock market. So on top of lenders, they also now have stockholders to contend with, to pay back all this money on sort of a low value product, which was tomatoes, lettuce and berries. By the summer of 2021, before they’re open even a year, AppHarvest leadership admitted on an investor call that the company was staring down a $32 million net loss. That same day, stocks dropped 29 percent and in the following months, the company was facing five different lawsuits alleging securities fraud.

Basically, stockholders were saying that leadership had lied about the productivity in the greenhouses and the success of the company. So through these suits at AppHarvest, leadership was repeatedly cited as blaming employee training, turnover and “a poor work ethic” as the root causes of the company’s failures to achieve profitability. Basically, rather than working out the kinks in its first year of operation, AppHarvest built five greenhouses while selling a low value product and blamed its failures in some ways on the laborers that kept the company going.

Adams: AppHarvest isn’t the only indoor agriculture project in the U.S., or even here in Appalachia. Multiple companies have closed or filed for bankruptcy in the last few years. Why is this particular industry so challenging?

Gaffney: Traditional farming relies on labor but also sun, rain and soil. In controlled environment agriculture (CEA), this type of industry relies on a reproduction of at least one of those, which is largely energy. In the example of AppHarvest, the greenhouses rely on a hydroponic system, the reproduction of heat and light, and pulling in water from retention ponds.

In Kentucky, we rely on coal for nearly 70 percent of our electricity. So the production of this produce is also tied to increased greenhouse gas emissions. The cost of those lights and the robotics that power parts of these facilities, especially when tied to commodified fossil fuels, can make this industry prohibitively expensive.

Over the last decade, there’s been an influx of venture capital funding into this industry, and the CEA market is predicted to be worth $3 billion by next year. So while the high costs of these facilities have accumulated quickly, they’ve also led to a domino of bankruptcies and closures, especially over the last couple of years.

Adams: There’s a lot in the story about how AppHarvest tried to cut labor costs. What was that experience like for workers?

Gaffney: The biggest complaints I learned from employees were how the big promises that AppHarvest made in its initial couple years failed to match their actual working environment.

When people were hired, especially at the inaugural Morehead greenhouse, they were deeply excited to join this new company which had this big mission, which they felt like was contributing to a sustainable future. Some of the employees told me that they would skip down the aisles during their first couple of weeks or months of work because they were so excited to be there.

But in October 2020, workers said they were told they needed to work overtime, including weekends, and one employee said when she complained, her supervisor told her she needed to “learn to sacrifice.” By the spring and the summer, extreme heat descended into the greenhouse. Former workers reported heat indexes that could reach into the 140s and the 150s, and often hovered in the territory of what the National Weather Service calls “extreme danger,” which is anything above 126 degrees Fahrenheit. That’s what these employees called “a grueling hell on earth.” They complained of heat exhaustion, rashes, dehydration and also dangerous working conditions where glass panels could fall from the greenhouse ceiling or tomato wires could snap.

This kind of mismanagement or dissatisfaction also bled into the corporate office that was based in Lexington. Former workers told me the leadership team was disorganized, and the goals of their positions were not clearly stated. One corporate worker told me they felt like they’d been sold a beautiful pipe dream, something that felt sustainable and new, and that could make it in Kentucky. But they said it turned out just to be a nightmare.

AppHarvest was touted as no less than the future of farming, but they filed for bankruptcy last year.

*Credit: Jon Cherry/Grist*

Adams: The story goes over a lot of ways that AppHarvest got things wrong. Is there a different version of AppHarvest, and that business model, that could potentially work in Appalachia?

Gaffney: It’s sort of speculative, so obviously, I can’t say for certain. But I think like all climate solutions, there’s a space for a renewable grid-powered version of AppHarvest. That could be one piece in a puzzle of solutions for a future food economy. That also includes small scale family farm markets that are sustainable and take care of our soil. But in order to feed our growing world, solutions like controlled environment agriculture — where we produce a high yield in a smaller facility without continuing to infringe on our forests and biodiversity — I think there is a space for that.

But AppHarvest grew so quickly that they weren’t able to trial and error a new type of economy with a totally new workforce. Maybe if AppHarvest had, had one greenhouse over three years, or five years or 10 years, and developed that workforce pipeline over time, they could have been successful. Instead, they built five greenhouses in less than three years. At that scale, it’s not that the science of CEA is wrong, but basically, it’s expensive. Plants are finicky, especially in indoor agriculture. If a disease or a pathogen takes hold, it can spread like wildfire.

I think they needed more room to make mistakes in their first few years, and maybe have less money to pay back in their first few years than they were able to do.

How Journalists Used Comics To Explain Landslide Insurance Troubles In Kentucky

Kentucky reporter Austyn Gaffney recently covered the topic for a comics journalism piece that was illustrated by Tennessee artist Martha Park. It was co-published by Grist, Bitter Southerner and the Economic Hardship Reporting project, and is titled, “Washed Away.”

This conversation originally aired in the April 16, 2023 episode of Inside Appalachia.

Eastern Kentucky communities have learned firsthand about the intricacies of flood insurance and government relief after last year’s historic flooding.

Some families are navigating an even trickier process trying to get reimbursement for the landslides that damaged their homes during the floods.

Gaffney recently spoke to Inside Appalachia host Mason Adams.

This interview has been edited for length and clarity.

Adams: Can you tell our listeners a little bit about “Washed Away” and what it’s about?

Gaffney: Basically, this story follows a family who live in the town of Busy, outside Hazard in Perry County, Kentucky. Your listeners, I’m sure, have heard of last summer’s flooding event that happened in central Appalachia. Around midnight on July 28, the daughter shook her mom awake and was like, “I hear a lot of rain outside. What’s going on?” The mom got up and she saw that a landslide had hit the back of their home.

This is not the first landslide that the family had been through. There was a previous landslide with flooding in March of 2021. So they recognized what had happened. They immediately left and tried to get to Hazard, but the road was covered with water flooding off the mountain next to them. They had to turn around and go back home and just wait it out.

The reason I wrote this story is not just because they had a harrowing experience, but also what comes next. In Kentucky, our number-one, most frequent, costliest natural disaster is flooding. But that is followed closely by landslides. While there was a lot of great reporting on the flooding, I wanted to get into what’s going on with these landslides that often accompany these major flooding events.

The Bakers, both in 2021 and in 2022, had to go through a series of mazes to try to get funding to pay for the landslide damage at their house. Unlike flooding or earthquakes, which have separate insurance policies, landslides are not covered by standard homeowners insurance or any specific landslide insurance. Getting money to pay back for their damages was a trauma on top of a trauma.

(Photos: Screenshots from “Washed Away,” by Austyn Gaffney and Martha Park, pulled from the Grist version.)

Adams: What types of problems are people encountering?

Gaffney: When a landslide occurs at someone’s home, if they own that home, they can first go to their homeowners insurance. So the Bakers, for example, had State Farm, but under State Farm’s standard homeowner insurance policy, they don’t cover landslides. They call them an “Act of God,” so they can’t go to State Farm. Typically, you would try the Federal Emergency Management Agency (FEMA) next, and they also don’t cover landslides, unless it is a mudflow, which means it falls under the same insurance policy as flooding. It’s this cryptic distinction; people wouldn’t be able to determine super easily, right, if it’s a mudflow or a landslide. So FEMA denied them. They can get money from the Small Business Administration (SBA), which is a loan that they have to pay back.

Linda, the mom, worked for a law office as a legal secretary, so she started looking at maps of the hillside above her home and realized that there was an abandoned mine about 150 yards up the hillside. So she applied to the Abandoned Mine Lands office in Kentucky to ask for assistance. But they also denied her. Their last resort was to contact their state representative, U.S. Rep. Hal Rogers. Hal Rogers also denied assistance.

The Bakers bought a house for $136,000 about three years ago, and they now have paid or borrowed $94,000 on that home. They’re just one example. But there are [other] families across the state and the region trying to get assistance.

Adams: One of the especially effective parts of this story is that, when you talk about the Bakers and their conundrum, we’re not just reading their name on the page but actually seeing their faces, because it’s comics journalism that you produced in collaboration with Martha Park. Can you talk about your work with Martha and how y’all put this together?

Gaffney: This is the second story that I’ve been lucky enough to work on with Martha. We first did a story near where she lives in Memphis, about water issues there. We wanted to keep following the issue of clean water and water-related, flooding-related landslide problems across the region. I knew the Bakers from their previous landslide event. We decided to try and pitch a story around: “Okay, we know that landslides are happening. But why isn’t there more coverage of people who suffer from landslides?”

Martha and I have a giant document with many story ideas. Then we approach a publisher to see if they’re interested in working with us as well. It’s very collaborative. I do a majority of the reporting, but Martha, along with being an illustrator, is a very talented writer herself. She will also help edit the piece and figure out what works for this form, which is very different from typical reporting, because you’re trying to make it as brief and contextual with illustrations as possible. The illustrations are telling a story that the text can’t really show on its own.

Adams: Austyn, you’ve also done a number of stories about coal ash, which is a widespread issue across Appalachia that continues to unfold. The story that sticks with me, and that really triggered some policy changes, was about the coal ash spill in Tennessee at the Kingston coal plant. Can you tell us what happened?

Gaffney: First, coal ash is a waste left over from burning coal. Coal ash concentrates a lot of the heavy metals and radioactive materials that naturally occur in coal rock — things like lead, mercury, arsenic, selenium. All of that waste is a fine powder typically called fly ash. It’s often stored wet in a holding impoundment called a pond, so that the fly ash doesn’t just take off into the air. At the Kingston Fossil Plant, is a coal burning generation station owned by the Tennessee Valley Authority, there is a giant pond that had been showing for years that it was relatively unstable.

Three days before Christmas in 2008, that pond burst in the middle of the night. It went across 300 acres of rural Rowan County, it went into the Clinch River. Around 3 a.m. or 4 a.m., a bunch of workers with the local Teamsters union were called to come to the site to try and be first responders to figure out what to do to clean up this enormous, enormous disaster.

It is still to-date the largest industrial disaster in the U.S. For the next five years, these workers cleaned up the site, but they were in conditions where they did not wear any dust masks or any protective gear. They were ingesting all of this ash, and they started to become sick.

In 2013 the first bulk of them filed a lawsuit against the contractor who was in charge of the cleanup. To make a long story short, that lawsuit is ongoing. In 2018, a jury decided that the contractor in charge of the cleanup basically broke their contract with TVA by not ensuring site-wide safety. This lawsuit has ballooned and it now has over 220 worker claims, and over 100 claims by spouses and families of those workers. While it’s ongoing, people have also died — over 60 workers, according to Knox News’ count.

Adams: It seems like a growing number of communities realized that these coal ash ponds are right there. In some cases, there’s concern about groundwater. Can you kind of sum up the bigger picture?

Gaffney: A big thing that happened since the spill is that, in 2015, two years after these workers filed their lawsuit, the federal government came out with its first coal ash rule. That’s a rule that, for the first time ever, monitored coal ash waste and created regulations for coal ash, which we had just been dumping into essentially large unlined pits with less regulation than a solid waste landfill where you put your kitchen waste. Because we have that rule, coal plants now have to report their groundwater monitoring data. So now we know that of the 292 coal plants in the U.S., over 90 percent are leaking contaminants into groundwater. Since the coal ash rule has come out, all of these coal sites have to create a cleanup plan. More than half of U.S. plants have not committed to a cleanup plan yet.

Adams: And even that cleanup effort has seemed to kind of spur spin off problems where I know some communities are worried now as utilities relocate piles of coal ash, they’re being trucked through neighborhoods at times.

Gaffney: Yeah, the story that Martha and I did together in Memphis was about that issue exactly. There’s a plant called the Allen plant, which is also owned by the Tennessee Valley Authority. They were sued to clean up their coal ash site, and their solution for cleanup was to truck the coal ash through a low-income, predominantly Black community in South Memphis to a landfill. There was a lot of pushback from that community about the fact that it existed on top of an aquifer that provided clean drinking water to all of Memphis, and so there was a lot of fear that there was going to be pollution into that aquifer.

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Since her story ran, Gaffney says the Kentucky Geological Society has been using LIDAR technology to give residents and developers a better idea of landslide susceptibility in their region.

In 2022, just after the July floods, it released five initial free maps of Floyd, Johnson, Martin, Magoffin and Pike counties.

A January 2023 report found 1,000 new landslides in the areas most affected by the July floods.