RALEIGH - The price of some North Carolina fruit and vegetables sold under a popular federal school lunch program has nearly doubled since the U.S. Department of Defense hired a Guilford County company to help save money.

A new $4.30-a-case surcharge is being levied by Foster-Caviness Foodservice of Colfax, a produce distributor that recently won a $37.6 million contract to supply military bases and school lunch programs across the state.

That's in addition to a 5.9 percent charge Defense Department purchasing agents were already tacking on to every fruit and vegetable transaction made under the federal "farm-to-school" program. The program subsidizes the buying of home-grown produce by more than 60 North Carolina school districts, including those in Wake, Johnston and Chatham counties.

State agriculture officials, who are partners in the decade-old federal program that utilizes the Defense Department's immense purchasing power, say the double charge is unjustified because they have handled deliveries, acted as a middleman on contracts and billing, lined up farmers and negotiated a price for the produce.

They liken the twin charges to inflated prices the Defense Department has paid military contractors for routine purchases.

"Schools will be buying a $200 hammer," said Gary Gay, director of the food distribution program at the N.C. Department of Agriculture and Consumer Services. "My phone is ringing off the hook with schools calling us, saying 'I can no longer afford to buy North Carolina produce.' "

As a result of the added expense, some North Carolina school officials say they will be able to buy only about half as much Tar Heel-fresh watermelons, apples, strawberries or sweet potatoes under the farm-to-school program as they did last year. Other school districts may decide to drop out altogether.

"It's quite a hefty increase, and it makes us question whether it is worth continuing," said Beth Taylor, director of child nutrition for Johnston County schools, which bought about $90,000 of fresh produce from the program last year. "We've really enjoyed the program and felt it was supporting the North Carolina farmer."

State Agriculture Commissioner Steve Troxler and members of North Carolina's Congressional delegation are angry about the extra fee. Urged on by Troxler, Reps. Walter Jones, a Farmville Republican, and Bob Etheridge, a Lillington Democrat, have demanded an explanation from Defense Department purchasing agents and pressed them to attend a meeting Tuesday in Raleigh.

"This makes no sense at all to me," said Etheridge, a Harnett County farmer and member of the House Agriculture Committee. "Somewhere along the line, someone's guilty -- and we're going to find out who."

Jones said the increased cost doesn't seem justified, considering the free services provided by Gay's office and other state agriculture officials. "We will get to the bottom of this," Jones said.

In a voice-mail message, Paul Lieb, president and owner of Foster-Caviness, declined a request for a phone interview.

"We're excited about the program, and we are very much committed to North Carolina growers," Lieb said in his voice-mail message. "It's a big undertaking. It's going to be a good thing, hopefully, for my business, a good thing for North Carolina and a good thing for North Carolina schools."

Before now, the program was touted as a success both for North Carolina growers who have a tough time penetrating institutional food-purchasing programs dominated by bigger agricultural states and nutritionists who like adding fresh fruits and vegetables to the student menu.

The program took advantage of the power of Defense Department purchasing agents, who buy food for military bases, veterans hospitals, commissaries and federal prisons. They have enough clout to secure volume discounts for schools that wanted to spend federal school lunch credits on fresh produce from North Carolina farms.

Foster-Caviness, which has been in the produce business since 1902, won the contract in May, in a privatization move designed to save money. But state agriculture officials say they didn't learn of the company's $4.30-a-case surcharge until three weeks ago -- just before the start of the traditional-calendar school year and well after nutritionists started placing orders.

"Even though they didn't truck it, they were going to charge money for every case coming through," Gay said. "We said 'Whoa! Whoa! This is not right.' "

State agriculture trucks made a final run from farms to Foster-Caviness distribution centers Thursday morning. But Gay's office will suspend future free produce deliveries, in part to protest the double-charge by Defense Department purchasing agents and Foster-Caviness.

The stacked fees, Gay said, have had a dramatic effect on the price of produce sold under the program, offsetting the savings of lower field prices negotiated with farmers. For example, a case containing up to three watermelons that sold for about $7.50 last year will cost roughly $13.00. Grape tomatoes, popular for student salad bars, cost $11.60 for a dozen one-point containers last year; they go for about $17.80 this year.

The new price regime is also pinching farmers. Frank Howell of Goldsboro said he expected to sell about 4,100 cases of watermelons under the farm-to-school program, like he did last year. On Tuesday, he was told he'll sell only 2,300 cases.

"It's screwed up," said Howell, who has participated in the program since it began in 1997. "The system was working super the way it was."