Amadeusz Juskowiak

Gao likely to show certs more costly than cash

A study on grain certificates due out shortly from the Government Accounting Office GAO could show that certificates cost the government 10 to 15 pct more than cash outlays administration and industry sources said

Analysis that the GAO has obtained from the Agriculture Department and the Office of Management and Budget suggests that certificates cost more than cash payments a GAO official told Reuters

GAO is preparing the certificate study at the specific request of Sen Jesse Helms RNC former chairman of the senate agriculture committee

The report which will focus on the cost of certificates compared to cash is scheduled to be released in mid March

The cost of certificates said the GAO source depends on the programs impact on the USDA loan program

If GAO determines that certificates encourage more loan entries or cause more loan forfeitures then the net cost of the program would go up However if it is determined that certificates have caused the government grain stockpile to decrease the cost effect of certificates would be less

GAO will not likely suggest whether the certificates program should be slowed or expanded the GAO official said

But a negative report on certificates will fuel the fire against certificates and weigh heavily on at least an increase in the certificate program an agricultural consultant said

The OMB is said to be against any expansion of the program while USDA remains firmly committed to it

Reuter