This chapter presents the development of capital intensive groundwater agriculture in the state of Guanajuato. The state of Guanajuato is one of the most important agricultural regions of Mexico. Its fertile soils, favourable climate and extensive irrigation systems have made the state an intensively used agricultural region since colonial times. The increase in groundwater irrigation went hand in hand with the expansion and intensification of production of vegetables for agro-export and fodder for national dairy industry; while also becoming more important in securing the production of basic grains such as maize and sorghum, wheat and oats. The bulk of production of both agro-export vegetables as well as fodder crops for the dairy industry is in the hands of a few thousand large producers/landowners most of which operate as family businesses. The introduction of neo-liberal policies in Mexico since the 1980s and the coming to power of agro-exporters in Guanajuato have marked a clear shift in national and state agricultural policies.