Global Poverty ActThe U.S. is heading towards a historically unique presidential election later this year. In the lead up to this November, it’s important to know how Joe Biden has helped fight global poverty. Specifically, Biden’s actions with the Global Poverty Act of 2007 demonstrate his commitment to increasing national security by combating poverty.

Biden’s Political Background

Before he became Vice President in 2009, Biden served in the U.S. Senate for over three decades. During this time, Biden was a ranking member and two-year chairman of the Foreign Relations Committee. Throughout his political career, Biden has supported foreign aid and implemented U.S. programs to help those in need. 

In the spring of 2007, Representative Adam Smith introduced the Global Poverty Act of 2007 to the U.S. House. The bill passed in September 2007 with bipartisan support and moved onto the Senate. Senator Barack Obama and two other senators introduced the bill in December 2007; Biden co-sponsored the bill and added minor amendments. The official bill saw no further action following its proposal on April 24, 2008.

What was the Global Poverty Act?

The Global Poverty Act aimed to make fighting global poverty the main goal of U.S. foreign policy. The bill itself did not detail a specific plan to combat global poverty. Rather, the bill ordered the President and Secretary of State to draft and implement a plan. The bill stated that the President’s strategy must have detailed goals, reasonable timelines, and include consistent progress reports to Congress.

The Congressional Budget Office estimated that the Global Poverty Act of 2007 would cost less than $1 million per year and would not order new spending, meaning that the plan could be implemented with minor changes to the fiscal budget. As foreign assistance is less than one percent of the federal budget, implementing this plan would have a major impact on the world with minimal monetary changes. 

The bill argued that it is America’s duty to help those in need. Moreover, solving global poverty would help combat terrorism and strengthen national security. This legislation stated that Congress had already taken steps to fight global poverty, but the executive branch could do more. In particular, Congress established goals that cut the number of people who live on less than $1 a day, lack reliable food, drinking water, and sanitation in half.

Wider Impact

The initiatives mentioned above were part of the Millennium Development Goals formed in 2000. These goals were not yet achieved by 2007. Consequently, The House introduced the Global Poverty Act to emphasizing the need to combat global poverty and make progress on these goals. The bill also emphasized the need to invest in U.S. programs that help reduce global poverty. In particular, these programs increase debt relief for poverty-stricken countries, promote sustainable development, and emphasize the need for future action. By putting fighting global poverty at the front of the presidential agenda, it would show other countries that they should do the same.

The 2008 Recession likely contributed to the bill stalling. At that time, Congress was focused on drafting domestic legislation. Although the House never implemented that Global Poverty Act of 2007, Biden’s involvement shows he understands fighting global poverty is an important aspect of U.S. national security. In essence, Biden’s involvement with the Global Poverty Act suggests he will use the executive branch to help combat poverty if elected this coming fall.

Jacquelyn Burrer

Photo: Obama White House Archives

U.S. Food Policy
The U.S. produces around 38.7 percent of all corn grown globally and around 35 percent of all soybeans. With such a large stake in global markets, it is not surprising that when U.S. food policy changes occur, many and often poorer places feel their effects throughout the globe.

Over 1 billion people work in world agriculture, and in poorer regions, a majority of the workforce population works in agriculture. In Sub-Saharan Africa, for example, over 60 percent of the workforce is involved in agriculture. With such a dependence on agriculture, changes in global markets and farming policies can severely affect these poorer populations. U.S. food policy may impact foreign farmers negatively in four principal ways: restricting imports in which developing countries have a comparative advantage; stimulating an overproduction of commodities in the U.S., that when the U.S. exports lowers the international price of goods from which low-income country farmers derive their income; distorting food markets in developing countries by the provision of in-kind food aid; and reducing official development assistance for agricultural and rural development.

Subsidies

Subsidies are a long-standing agricultural policy in the United States. Originating during the Great Depression, farming subsidies are payments and other support that the U.S. federal government gives to certain farmers. Today, the U.S. distributes around $20 billion to farming businesses annually. In 1930, when the stock market crashed, around 25 percent of Americans lived on farms and ranches and the government intended subsidies to help support these smaller family-run farms. Today, the largest 15 percent of farm businesses receive 85 percent of government subsidies that protect them from price fluctuations and unexpected decreased crop production.

Because of the U.S. subsidy system, it is cheaper for U.S. farmers to produce certain crops and thus it is cheaper for many poor nations to import crops such as wheat, barley and corn, instead of buying and growing locally. As one of the world’s largest cotton producers, subsidies can cause severe global price depression. In 2004, Brazil challenged the U.S. cotton subsidies with the support of the World Trade Organization (WTO). The WTO found that U.S. cotton subsidies were responsible for distorted international markets. In winning the dispute, Brazil could impose $830 million in product sanctions and the U.S. paid $300 million to the Brazil Cotton Institute as reparations.

Subsidies are also the main cause of more market distortion for corn, one of the U.S.’s most lucrative crops. Under the North American Free Trade Agreement (NAFTA), the U.S. exports highly subsidized crops that compete with Mexican products. The exported corn contributed to a 413 percent increase in U.S. exports and a 66 percent decline in Mexican producer prices from the 1990s to 2005.

Cargo Preference

Cargo preference is another policy interfering in international relations between the U.S. and its beneficiaries. The Cargo Preference Act of 1954 ensures that ships operated by U.S.-based companies must transport at least 50 percent of overseas-bound food aid. Because of this regulation, 35-40 cents of each dollar spent on food aid goes toward transportation rather than the food itself.

The United States established Cargo Preference to protect U.S.-flag maritime companies and unions from competing for foreign cargo ships. These companies may increase or decrease the cost of transportation. The disparity between foreign-flag and U.S.-flag ships is very costly to the food aid effort. U.S.-flag ships can cost around $100-135 per metric ton while foreign-flag ships cost around $65 per metric ton. By matching foreign pricing, the country could use the $23.8 million that the country that it would have spent on shipping towards feeding the poor.

If the U.S. were to eradicate cargo preference, there would be an additional $300 million to feed another 9.5 million people each year.

Biofuel Mandates

The Renewable Fuel Standard (RFS) emerged with the Energy Policy Act of 2005. This federal policy requires transportation fuel to contain a minimum volume of renewable fuel, namely ethanol from corn or soybeans. This policy was to help American farmers and decrease dependency on foreign oil.

The policy has, however, had a negative effect on global food prices. According to the Resources for the Future, estimates determine that the RFS in the U.S. and the E.U.’s own biofuel mandate will increase global food prices by 15 percent by 2022. Because the RFS demands more corn for ethanol production and because the U.S. produces 40 percent of the world’s corn crops, the policy has had a critical impact on global corn markets. An Iowa State University study estimates that the RFS has diverted a third of U.S. corn crops (10.8 percent of the global corn market) towards production of ethanol and biofuel and has caused an increase in global corn prices from 8-34 percent.

Proactive Policy

The U.S. government has taken major steps toward improving the food security of poor nations. While many food policies focus on farmers and exporting goods, the Global Food Security Reauthorization Act (GSRA) targets farmers in developing countries. Signed into law in 2018, the GSRA ensures funding and support for the Feed the Future initiative. Feed the Future works with local agriculture sectors in developing countries to help build up strong farming techniques and give them the tools to ensure their food security. Thanks to Feed the Future, estimates state that 23.4 million people now live above the poverty line and that farmers have generated $12 billion in new agricultural sales from 2011 to 2017.

Due to the size and volume of exported crops and resources, the U.S. food policy has a strong pull on global markets. Developing and poor nations can feel the effects of rising and falling global food prices most keenly. Therefore, it is important for U.S. policymakers to assess the impact of these policies and others like them. Luckily, initiatives like Feed the Future are working hard to help build stable agricultural communities in developing countries. With such size and resources, the U.S. has the power to create positive change in global markets.

– Maya Watanabe
Photo: Flickr