Regional Environment and Agriculture Programming Model (REAP)
by Robert Johansson, Mark Peters, and Robert House
Technical Bulletin No. (TB-1916) 118 pp, 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
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
• 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).