The government of embattled Brazilian President Michel Temer has sent a proposed bill to the National Congress that environmentalists fear would reduce protected forest areas in the Amazon.

If passed, the bill would see preservation areas of the Jamanxim National Forest in the Amazonian state of Para cut by 27 percent, about 350,000 hectares, an area roughly the size of Portugal.

Critics say that land grabbers illegally occupying forest land stand to benefit the most.

The bill comes as Temer is expected to face a vote in Congress on August 2 that could see him suspended and face trial at the country's Supreme Court for corruption.

Critics see the bill as a way for the scandal-plagued president to shore up vital support from the country's powerful agriculture caucus.

"This proposed bill and other anti-environmental legislation proposed by Temer is a way for him buy votes and stay in power," said Marcio Astrini, policy coordinator at environmental watchdog, Greenpeace Brazil.

According to parliamentary watchdog group Congresso em Foco, the agriculture caucus holds 230 seats in Brazil's 513-seat lower house and 24 in the 81-member Senate.

Novo Progresso, the municipality where the Jamanxim National Forest is situated, is a hotbed of violent land conflict, land grabbing, illegal logging and mining.

Jamanxim was declared a national park in 2006 to try and minimise these impacts.

In June, trucks belonging to Brazil's environmental police were burned in Novo Progresso after Temer vetoed a similar bill to reduce the forest areas by 37 percent.

The veto was announced on the evening of a trip to Norway, one of the biggest investors in Brazil's Amazon, and followed criticisms by Norway's Prime Minister Erna Solberg.

'Illegal land occupiers are being rewarded'

If the current bill passes, farming, mining and industrial activity would be permitted in the protected forest areas and the occupants who receive land titles will also be able to sell their land.

"People who have illegally occupied public land are being rewarded instead of being punished," said Elis Araujo, a researcher and lawyer at the Imazon environmental watchdog agency.

The government says that only areas occupied before 2006 will be regularised and that only 20 percent of the forest on each property can be used for farming or mining.

However, Araujo fears that once the bill is sent to Congress it can be altered to benefit land grabbers and illegal activity.

"These clauses will be the first to be deleted," she said, referring to stipulations of minimum deforestation.

The bill was sent to congress last week as an emergency measure with a deadline of 45 days for it to be voted on in the lower house.

Temer recently sanctioned separate legislation that critics say effectively works as a land grabbing amnesty by regularising all land illegally occupied until 2011.

Senator Romero Juca, rapporteur of the bill, described the law in the Senate as a historic debt paid to thousands of families who migrated to the Amazon in the 1970s and 1980s and never received land titles promised by the government.

Critics refute the social responsibility claim, however, pointing out that the law gives amnesty for properties as large as 2,500 hectares, hardly small landholdings, and that similar legislation was passed in 2004.

Fears of rural violence

Activists say that the amnesty will incentivise further land grabbing by wealthy, organised criminal groups that typically clear large swaths of land, and then allow it to be occupied by poor farmers to raise cattle under the guise of it being productive land.

Once the land grabbers receive land titles, they often use the land to grow soy, which is more profitable than cattle, or for mineral extraction in the region's rich earth.

"This is a clear message from the government for criminal groups. 'Continue deforesting, because you will be pardoned'," said Astrini from Greenpeace Brazil.

Watchdog groups have also expressed concern that Temer's environmental rollback is accelerating high levels of rural violence.

In the first half of 2017, 37 people have been killed in land conflicts, a third higher than 2016, according to human rights NGO Comissao Pastoral da Terra which monitors rural violence.

In May, 10 rural workers squatting a large farm were killed in Para state by military police and in April, 13 members of the Gamela Indigenous community in Maranhao state were attacked with guns and machetes over a land dispute.

"We are seeing acceleration in violence as powerful groups look to take land," said Araujo from the Imazon environmental watchdog agency.

Amazon deforestation increased by 29 percent between August 2015 and July 2016, according to Brazil's National Institute for Space Research, which prompted Norway to cut 50 percent of their Amazon Fund investment.

Temer took power in 2016 when former President Dilma Rousseff was impeached, accused of manipulating fiscal budgets.

"The change in government greatly empowered the agriculture caucus," said Fabio Gois, editor at watchdog group Congresso em Foco. "These days the caucus has a lot of demands for Temer," he added.

Marcio Astrini from Greenpeace said: "These aren't new demands, these are measures the agriculture caucus has been hoping for decades."