COST OF PIK CERTIFICATES TO BE EYED BY CONGRESS Congress, eager to find budget savings, launches a review of the U.S. Agriculture Department's generic commodity certificate program tomorrow, amid signs USDA and the General Accounting Office, GAO, are at odds over how much the program has cost U.S. taxpayers. The GAO concluded in a preliminary report last week that payment-in-kind, or PIK, certificates cost between five and 20 pct more than cash outlays, administration officials who asked not to be identified said. USDA officials, however, took issue with the report, saying it did not take into account storage, handling and transport savings that accrue to the government. The GAO then decided to re-examine the costs, sources said. The issue is an important one, because congressional budget committees are known to be considering limiting the use of certificates as a means of cutting spending. Agriculture Under Secretary Daniel Amstutz and GAO Senior Associate Director Brian Crowley are set to testify before the Senate Agriculture Committee tomorrow. Amstutz is expected to tell the committee that there are uncertainties in determining the cost of certificates compared to cash outlays, and that savings to the Commodity Credit Corp, CCC, almost equal costs, department sources said. USDA estimates that it costs the government about 75 cents to store, handle and transport each bushel of commodity put in government storage. It was unclear whether the GAO, Congress' investigative arm, would stick by its original analysis that it costs the government more to use certificates instead of cash in farm price and income support programs, Reagan administration sources said. The GAO is expected to point out that use of payment-in-kind, PIK, certificates has helped relieve tight storage by moving grain that otherwise might not have been sold. The testimony by Amstutz and GAO Senior Associate Director Brian Crowley comes as congressional budget committees intensify their efforts to pinpoint ways to cut the federal budget deficit -- including considering limits on the use of PIK certificates. The CCC issues dollar-denominated PIK certificates, or certs, as a partial substitute for direct cash outlays to farmers or cash subsidies to exporters. Certs can be used to repay nonrecourse loans or exchanged for CCC commodities or cash. Between April and December 1986, CCC issued 3.8 billion dlrs worth of certificates, according to USDA. Up to another 6.7 billion dlrs worth could be issued between January and August 1987, according to USDA. Certs can cost the government more than cash primarily because recipients can use the certificates to pay back government loans at levels below the loan rate. Eliminating this practice, called "PIK and roll," would save the government 1.4 billion dlrs between 1988-92, according to the Congressional Budget Office, CBO. That estimate, according to a CBO official, was based on an assumption that certificates cost the government about 15 pct more than cash payments. The Senate and House Budget Committees are known to be considering curbs on PIK-and-roll transactions among other savings alternatives. The GAO last week reached the tentative conclusion that the estimated three billion dlrs of certificates redeemed to date have cost the federal government between 150 mln and 600 mln dlrs, or between five and 20 pct, more than cash outlays, one administration official said. However, the GAO has decided to reassess those estimates based in part on USDA criticism, department officials said. The broad range of the cost estimate is partly attributable to the different effect certificates can have on market prices over the course of a crop year. USDA's Economic Research Service, for example, has found that between June and August last year, the 215 mln bushels of corn exchanged for certificates lowered the price of corn by between 35 and 45 cents per bushel. Between September and November, however, certificates had only a marginal impact on corn prices, according to the ERS study, obtained by Reuters.