The need for regulation of Brazil’s natural rubber agro-industrial system (SAG) is evident. Since the middle of the 20th century, when the country began importing rubber, many governmental efforts have been made to promote the sustainable development of Brazil’s natural rubber productive sector. In 1997, the Brazilian government created a direct subvention policy to assist rubber producers. Given the structure of Brazil’s SAG, the international rubber market, and imperfect regulation by the Federal Government, it would not be unexpected to find signs that Brazil’s largest natural rubber consumer, the domestic tire industry, has begun to abusively exercise its market power. Using the theoretical structure of Industrial Organization, this paper tries to show evidences of this abuse.
public regulation; behavior of firms; natural rubber
