MORE U.S. GRAIN CERTIFICATES NEEDED, STUDY SAYS

  More generic grain certificates
  should be released onto the market in order for the U.S.
  certificate program to have its full effect on commodities,
  according to a study by Sparks Commodities Inc.
      The Agriculture Department should make grain deficiency
  payments and paid land diversion payments in a two-third
  certificate, one-third cash ratio through fiscal year 1989, 
  Carroll Brunthaver, president of Sparks Commodities, told a
  House agriculture subcommittee hearing on certificates.
      Thereafter, government payments should be issued in roughly
  a 50-50 split between cash and certificates, Brunthaver said.
      The Sparks study on certificates examined two possible
  scenarios through the 1990 growing season -- a "zero
  certificate case," where no certificate program was assumed,
  and an alternative case labeled "adequate certificate case" in
  which sufficient certificates would be released so that grain
  prices would not be artificially supported by market shortages
  due to acreage reduction programs or government holdings.
      The study showed that total grain use under the adequate
  certificate scenario would exceed the zero certificate scenario
  by 11.2 pct.
      Usage would be markedly more in 1989 and 1990, when grain
  usage under a certificate program was estimated to exceed the
  zero certificate case by 15 to 19 pct.
      For the five-year period examined, government expenditures
  under the adequate certificate case were 7.0 billion dlrs, or
  7.5 pct less than under the zero certificate case.
      The Sparks study said that 5.1 billion dlrs, or 70 pct of
  those savings resulted from smaller government storage costs.
      The study also estimated that government grain stocks under
  the adequate certificate case would be 4.7 billion bushels
  below the zero certificate case at the end of the period
  examined.
      The Sparks study said that while certificates permit market
  prices to fall below loan levels, these lower prices increase
  commodity usage and reduce the net costs of certificates versus
  cash.
  

