< Previous page

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."

< Previous page