The Atlantic Forest is a highly diverse biome, extending from the northeast to the south of Brazil. The diversity of elevation and climate of this biome allows for extraordinary biodiversity with high levels of endemism (Tabarelli et al. 2005). The original territory of the Atlantic Forest contains 65% of the Brazilian population, providing fundamental ecosystem goods and services, such as climate regulation, water supply, erosion control, and pollination (Ditt et al. 2008). An estimated 100 million people in Brazil depend on the water provided by Atlantic Forest rivers and streams. Despite its importance, the Atlantic Forest is one of the most threatened and fragmented biomes worldwide (Myers 1988, Tabarelli et al. 2005). Slightly over 11% of the original forest remains, mostly remnants (83%) smaller than 50 ha and within 100 m from forest edges, revealing high levels of fragmentation.
Reconnecting forest fragments became a national policy at the end of the 1990s through the Pilot Program for the Tropical Forest Protection (PP-G7), financed by the World Bank. This program has resulted in both the establishment of protected areas and some small functional corridors between them in high priority areas, particularly in the Amazon region. In addition to the PP-G7 program, Brazil's main Forest Act of 1965 mandates permanent preservation areas (PPA or in Brazil, APP) along rivers and streams in an effort to provide natural ecological corridors for fauna and flora outside protected areas. According to the Forest Act, hilltops, springs, and areas with slopes greater than 45 degrees must be set aside for conservation purposes. The Forest Act also requires farmers to maintain Legal Reserves (LR or in Brazil, RL) on their farms, characterized by sustainable use of natural resources, conservation and restoration of ecological processes, conservation of biodiversity, and the protection of native flora and fauna (Ditt et al. 2008). The minimum area of LR required in the Atlantic Forest is 20% of the total area of each farm.
Theoretically, the Forest Act and programs like the PP-G7 should guarantee connectivity and forest conservation within the Brazilian territory. Nevertheless, because the enforcement of the Forest Act is weak, the PP-G7 program has brought results only at a small scale, and they are predominantly restricted to the Amazon region. Approximately 16% of the required LR and 42% of PPAs show severe deforestation, representing 87 million ha to be restored in private areas (Sparovek et al. 2011).
Santa Catarina State offers an interesting case study. It holds the highest relative forest coverage (23%) among the Brazilian states, although most of them are secondary forests (Tabarelli et al. 2005), but it also experiences the most rapid deforestation (Meister & Salviati 2009). According to the Brazilian Institute of Geography and Statistics, small family farms encompass 87% of all properties and 44% of the land in the State, a much greater proportion than in other States. [End Page 288]
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Many smallholders in Santa Catarina have removed most of the forest cover in their farms in violation of the Forest Act. In many, if not most cases, the small size of family farms along with their characteristic high slopes and conspicuous number of streams means that compliance with the law would make it almost impossible to sustain themselves with traditional agricultural practices. While compliance with the Forest Act would likely protect and restore critical ecosystem functions (Metzger 2010), it would also force smallholders off the land and into poverty. One cause of deforestation has been declining incomes in rural areas relative to urban areas, leading farmers to clear more forests to increase short term income as the PPAs and LR represent much of their land...