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Regional Environment and Agriculture Programming Model (REAP)
Robert Johansson, Mark Peters, and Robert House
Technical Bulletin No. (TB-1916), March 2007
Development of the U.S. Mathematical Programming Regional Agricultural
Sector Model (USMP) began in 1985 to augment economic and environmental
policy analysis at the U.S. Department of Agriculture’s
Economic Research Service. Analysts needed a way to represent
the interactions among product prices, choice of production
practices, and demand for crop and livestock products when analyzing
the potential effects of policies designed to address environmental
issues associated with agriculture. The effects of environmental
and energy policies were so widespread and the interaction among
the various commodities so complex that it was impossible for
analysts, using the available analytical tools and research
results to project the ultimate effect of specified policies
on agricultural producers or even to determine whether the policies
would achieve their desired goals. This bulletin presents the
current version of the USMP model—now the Regional Environment
and Agriculture Programming Model (REAP)—its theoretical
and modeling system specification, descriptions of the data
used, and a guide for setting up and running model simulations.
What Are the Issues?
Many agricultural policy issues stem from agricultural production
and its interface with the environment. Modeling efforts are
important for informing policymakers on how these issues might
influence the heterogeneous set of farms, farmers, and environmental
resources that characterize U.S. agricultural production. Agricultural
policy issues analyzed using REAP include soil conservation
and environmental policy design, water quality, environmental
credit trading, irrigation policy, climate change mitigation
policy, trade and the environment, livestock waste management,
wetlands policy, new or alternative fuels from agriculture products,
crop and animal disease, and regional effects of trade agreements.
What Does the Model Do?
REAP is designed for general purpose economic, environmental,
technological, and policy analysis of the U.S. agriculture sector.
REAP facilitates the “what if” scenario analyses
by showing how changes in technology, commodity supply and demand,
and farm, resource, and environmental and trade policy could
affect a host of performance indicators important to decisionmakers
and stakeholders. Analysts perform “what if” analyses
by solving for a baseline, or status quo, economic equilibrium,
then imposing specific policy, technology, trade, or other changes
on the system and solving REAP again to compute a new economic
equilibrium consistent with the scenario changes. Performance
indicators include regional values for land use, input use,
crop and animal production and prices, farm income, government
expenditures, farm program participation, and environmental
emissions such as erosion, nutrient and pesticide loadings,
and greenhouse gases. The scenarios analyzed do not predict
a dated forecast or projection, but rather present the likely
effect of proposed changes in policies, regulations, and markets
on the agriculture sector’s performance, holding constant
all other conditions affecting the sector.
REAP is a price-endogenous mathematical programming model.
As such, it incorporates the assumptions of neoclassical economics,
supplemented by the best available estimated behavioral and
biophysical relationships (e.g., for agricultural commodity
supply and demand or nitrogen runoff). Many regularly updated
data sets—production practices surveys, multiyear baselines,
macroeconomic trend projections, and regional resource and land
databases—are applied to construct and update REAP. To
generate a baseline scenario, disaggregated regional data are
used to map the baseline data projections into REAP’s
smaller units of analysis. The relationships between production
practices and environmental performance indicators represented
in the model are derived by using biophysical models.
How Does the Model Work?
• REAP cropping enterprises, or activities that include
rotation, tillage, and fertilizer choices, are linked to the
Environmental Policy Integrated Climate Model (EPIC), a biophysical
model of crop production. In addition to the effect of production
practices on yields, EPIC is used to compute environmental indicators
such as nitrogen loss and greenhouse gas emissions per acre
for each REAP crop system, thereby augmenting economic analysis
of “what if”scenarios with their environmental effects
as well.
• Land use, crop mix, multiyear crop rotations, tillage
practices, and nitrogen fertilizer application rates are all
endogenously determined in REAP’s 45 production regions.
Scenario analysis explores the response of all these variables
to “what if” changes in policy incentives, regulations,
market conditions, technology, and so forth.
• Crop and livestock primary and secondary products are
all integral parts of the model and interact in the solution
process. Cattle, poultry, and swine feed rations are formed
from activities that process crops into protein, energy, and
trace elements necessary for the respective animal diets. Policy
and market shocks that directly affect either the crop or livestock
industry ultimately result in a market equilibrium that reflects
the repercussions for agricultural industries and markets.
• REAP provides comparative static analysis from any
base year in the historical/baseline data, which is approximately
1988-2015. REAP is typically calibrated to a current or future
year selected from the 10-year USDA baseline. For example, REAP
is to be calibrated to the 2010 baseline for scenario analysis
of changes introduced in 2010. Near-term analyses of policy,
market, or technology shocks reflect short- or medium-term sector
responses; long-term analyses reflect longer run adjustments.
• The explicit linkages in REAP between production activities
and environmental emissions indicators can be exploited to extend
analysis to alternative environmental policy scenarios. For
example, REAP was extended in 1999 to provide analysis of the
effects of the Kyoto Protocol on U.S. agriculture. REAP has
also been extended by the World Resources Institute to examine
excess fertilizer nutrient (phosphorus) pollution in the Great
Lakes, hypoxia, climate change, and point/nonpoint emissions
trading.
• Data used are readily available. Most core model data
are prepared and regularly updated by agencies of the U.S. Department
of Agriculture. REAP applies USDA and ERS data and estimates
to agriculture sector analysis. This includes ERS cost of production
data, USDA acreage and production data, baseline data, and changes
to commodity program policy instruments (e.g., fixed and countercyclical
payments, target prices, loan rates, loan deficiency payments,
and domestic agrienvironmental programs).
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