Explain the economic effects of farm programs on the European Union and in the United States on world trade

What will be an ideal response?

The price support policies of the European Union led to higher trade barriers (tariffs and quotas) that restricted agricultural imports. These policies created incentives for overproduction in European agriculture and led to demands for subsidies for exports to get rid of the overproduction and to maintain farm product prices. These policies in the European Union have caused problems for American farmers because the trade barriers have made it more difficult to sell in the European market. Also, world prices for agricultural products have been depressed by the subsidized European exports, hurting incomes for American farmers and those in developing nations that produce competing crops.