Summary: Pursuant to a congressional request, GAO assessed whether the Department of Agriculture (USDA) received reasonable prices for the grain it sold during fiscal years 1988 and 1989.
GAO found that: (1) the overall policy USDA used for certificate exchange sales priced grain as close as possible to estimated local market prices; (2) USDA implementing instructions specified that exchange prices should be at or below estimated local market prices; and (3) USDA determined selling prices for exchange sales based on estimates of local market prices. GAO also found that: (1) USDA sale prices for 36 million bushels of grain averaged about 5 cents below local market prices; (2) it could not measure the reasonableness of the sale prices in relation to the need to reduce inventories; (3) USDA grain sales were instrumental in reducing costly federal grain inventories; and (4) the U.S. grain stock policy did not address such issues as inventory size, USDA authority to release grain stocks, or how to avoid future excessive inventories.
