Conventional wisdom holds that frontier regions in developing countries are characterized by weak states and dominated by clientelistic elites. Yet substantial variation in local state capacity exists even within the countryside. What explains these differences? This paper advances a new explanation for the development of local state capacity grounded in the rise of capital-intensive agriculture. I argue that agricultural modernization redistributes local power by strengthening commercially oriented farmers and fostering the emergence of urban-commercial groups through broader economic diversification. Because these processes complement state capacity with productive assets, they increase the incentives of these actors to demand and support investments in local state capacity. I evaluate this argument in Brazil, where the adoption of high-yield crop varieties transformed agricultural production unevenly across space. Exploiting variation in the timing of high-yield variety adoption and municipality-level differences in agroecological suitability since the 1970s, I implement an instrumental-variables strategy to estimate the long-run effects of agricultural modernization on local state capacity. The results show that the expansion of capital-intensive agriculture played a pivotal role in strengthening local state capacity by fostering a commercially oriented class of farmers and local economic elites with incentives to support public administration and governance. I complement these quantitative analyses with original fieldwork conducted in Brazil’s agricultural frontier regions, including semi-structured interviews, archival research, and site visits. More broadly, the findings demonstrate how technological change can generate spatially uneven patterns of state capacity and development, even in historically low-capacity frontier regions.