Avocados: Mexico’s green gold, drug cartel violence and the U.S. opioid crisis

The growing global demand for avocados has drawn the attention of rent-seeking drug trafficking organizations (DTOs) in Mexico. As a result, farmers and packing houses have become targets of extortion by these organizations. This paper aims to answer whether declining drug revenues have incentivized cartels to target the avocado sector. By leveraging exogenous variation from the introduction of Fentanyl in the U.S., I analyze the impact of reduced heroin demand on homicides and cartel presence in avocado and poppy-growing municipalities between 2011 and 2019. Using municipal-level data, I show that the decline in the demand for heroin increased homicide rates, including those of agricultural workers, as well as truckload thefts in avocado-growing municipalities. Conversely, decreased heroin demand resulted in a reduction in homicides and violent thefts in poppy-growing municipalities. Furthermore, I find no evidence of changes in cartel presence in avocado and poppy municipalities. Consequently, the rise in homicides in avocado municipalities can be attributed to DTOs’ increased use of violence against civilians rather than territorial expansion. Overall, this paper provides evidence of inter-sector spillovers resulting from drug demand changes. • The expansion of Fentanyl in the U.S. decreased heroin demand from Mexican cartels. • Cartels shifted to extorting avocado farmers, increasing violence in avocado areas. • Declining heroin demand reduced violent cartel competition in poppy-growing regions. • Results suggest violence arose from crime diversification rather than territorial disputes.