Licit Crops, Illicit Gains: Rent-Seeking from Avocado Production

This article examines how positive economic shocks to legal agricultural production affect non-lethal crime in conflict-affected settings. I focus on Mexico’s avocado sector, which has experienced substantial growth in production and export value over the past two decades. Using municipal-level data from 2011 to 2024, I combine administrative crime records with survey-based victimization data to examine the effects of avocado production on extortion, threats, and kidnappings. To address potential reverse causality, I instrument municipal avocado production using international avocado production interacted with municipality-level geographic characteristics that determine suitability for avocado cultivation. I find that increases in avocado production are associated with higher levels of extortion across both data sources. The evidence for threats and kidnappings is less consistent across data sources. These results are robust to alternative samples and specifications and remain for extortion when restricting the analysis to municipalities with documented organized crime presence prior to the study period. The findings are consistent with a rent-seeking mechanism in which organized crime groups exploit high-value legal markets to generate recurring revenue. Avocado production is particularly suited to this form of extraction because orchards are geographically fixed, require substantial investment, and generate income repeatedly over many years. The results also suggest that the expansion of legal economic activity can create new opportunities for criminal rent extraction where state capacity is limited. More broadly, the study shows that the consequences of economic booms in conflict-affected regions extend beyond lethal violence and can include systematic forms of non-lethal crime that directly facilitate the appropriation of legal economic rents.