Environment Minister Marina Silva has presented the measure as a priority and said "keeping the forest going is an important environmental service" for the entire planet.

Under the scheme, farmers, ranchers and woodsman who use small-scale traditional techniques in the Amazon will be rewarded with public funds, special credits and a market that will pay more for environmentally sustainable products.

The initiative's goal is to reinforce methods seen as doing less damage than the the large-scale mechanical and chemical methods of big commercial businesses, the director for Brazil's Agency for Sustainable Rural Development, Paulo Guilherme Cabral, told AFP.

The compensation should help rural workers making a subsistence living off the land while providing a disincentive for profitable "destructive activities" such as cultivating soya, clearing land for cattle and illegal logging, said Raul do Vale, coordinator of the Socioenvironmental Institute, a non-governmental organization.

Brazilian President Luiz Inacio Lula da Silva recently admitted that an economic carrot had to accompany the sticks the government was employing to preserve the Amazon.

"Nobody will convince a poor person not to cut down a tree if he doesn't get in exchange the right to work, to eat," he said.

One Amazon farmer who has signed on to a pilot project for sustainable development involving 4,000 families, Angelino Moreira, hailed the logic behind the new scheme.

"If I do like the others, cut down trees, burn the land and use herbicides, I will have great harvests. But when you respect the trees and don't use chemicals, production falls dramatically -- this is why it has to be compensated, so we can get by," he said.

Although newly employed, the idea of paying for sustainable practices is not new.

Rural workers throughout Latin America have long called for such compensation, and they renewed that call at a meeting several days ago in the Brazilian city of Manaus, in the middle of the Amazon.

They also want the concept drafted into the UN convention on climate change.

"The leaders of the communities in Latin America's forested areas want a consensus on the economic compensation for environmental services that they give to the planet by helping conserve millions of hectares of native woodland in the tropics," they said in a statement.

In Brazil, the issue is taking on big proportions because of the size of the area in question.

The Brazilian state of Amazonas recently created a "forest fund" and Brazil is studying other countries' models, including in Costa Rica where taxes on water and fuel are paid to forest landowners.

In the past three years, Brazil has managed to curtail deforestation by 59 percent. But that success has faltered in recent months by renewed stripping of the Amazon, especially by those making illegal cattle ranches and soya plantations.

The deforestation is estimated to cause 75 percent of Brazil's greenhouse gas emissions. The country is the fourth biggest emitter of the gases in the world.

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