The Amazon's southern and eastern rim is known by locals as the Arc of Fire - or, less poetically, the Zone of Destruction. The area's cerrado and cerradão growth is essential to protection of the canopied rainforest further north - and to the region's water supply.

But over the past half-century, the vegetation has been systematically destroyed by ranching and farming.

This suggests John Carter, a cattle rancher, is part of the problem. In fact, when Carter moved to Brazil from Texas 12 years ago and bought land to ranch, he kept within all the government’s limits on deforestation.

That makes him almost unique among his neighbours. Men like Carlos Alberto "Carlito" Guimaraes moved here 30 years ago, back when the federal government was encouraging ranchers to clear land as part of an effort to integrate the region into the national economy.

He has cleared at least 90,000 hectares of the Amazon in his time. “In the past, if you cut down 1,000 hectares of forest, the government gave you another 1,000,” Carlito says.

Times have changed, and as the government has realised the effects of its earlier policies - erosion, decreased rainfall and frequent fires - it is changing the rules and demanding forest be preserved and replanted.

But it's one thing to make new laws, another to enforce them. In Mato Grosso, Carter's state, the rule of law runs out with the paved roads. When Indians from a nearby reservation stole cattle from Carter, he dealt with the problem himself rather than call in a police force reluctant to react.

He met the chief of the tribe and offered him a deal: he would give them 100 head of cattle if they would stop pillaging his herd.

But that was only the beginning of Carter’s problems. Squatters are also moving in. An hour’s drive from his ranch, an illegal town of 3,500 inhabitants boasts homes, schools and grocery stores.

And last August, a fire set by land-grabbers burnt down much of his dehydrated forest – and jumped a 500m swamp before reaching his property.

João Batista Barros de Sousa, owner of one of the illegal town’s supermarkets, has been squatting since 1992. “If they make me leave, fine, I’ll leave,” he said. “But I’m still here today.”

In 2004, Carter started a group called Aliança da Terra, or Land Alliance. The group conducts registries of ranchers' and farmers' land, demonstrating what they're doing right, and what they're getting wrong.

When landowners like Olenir “Nic” Bernardi meet the group’s recommendations, they get seals of approval that help them sell their beef and soya to environment-conscious buyers – in other words, European companies.

Carter thinks market forces will do a better job than an ineffectual government at encouraging farmers like Reginaldo Greczyszn, pictured here on his soya farm, to preserve the Amazon.

Others agree, including experts at Woods Hole Research Center in Massachusetts. And Carter's neighbours seem optimistic, too. They as much as anyone know the stakes. Says Carlito: "We've done a lot that was bad. We've caused erosion that makes a lot of other things go wrong. If we don't start putting it right the headwaters will be destroyed."