The Food Security Act of 1985 authorizes the U.S. Department of Agriculture to issue generic certificates in lieu of cash payments due to program participants and merchants of agricultural products under provisions of several programs. The certificates may be used to acquire stocks held as collateral on government loans or owned by the Commodity Credit Corporation (CCC). These certificates offer producers and merchants advantages when they are exchanged for crops held under loan or owned by the CCC, and they have freed up stocks that might not have been marketed. Although the costs of using certificates likely exceeded the costs of issuing those payments in cash during fiscal 1987, generic certificate costs are projected to range between 93 and 99 percent of cash costs during fiscal year 1989. As of March 31, 1988, about $17.9 billion worth of certificates had been issued, with about $1.7 billion worth having been redeemed as of May 31, 1988. Approximately 72 percent of the exchanges have been for corn, 20 percent for wheat, and the remainder for various other commodities held under loan or owned by the CCC. One concern that has been raised is that, by freeing up government-owned stocks, certificates may dampen prices and thus increase deficiency payments. (MW)