By Brian Ellsworth
NOVA MUTUM, Brazil (Reuters) - A chainsaw buzzes, branches snap, and an Amazon tree crashes to the ground.
It could be just another of the thousands of trees felled each year in Brazil's portion of the world's largest forest except for one detail: a microchip attached to its base holding data about its location, size and who cut it down.
With a hand-held device, forestry engineer Paulo Borges pulls up the tree's vital statistics from the chip -- a 14-meter-high (46-foot) tree known as a "mandiocao" cut down in Mato Grosso state, the southern edge of the Amazon where the forest has largely been cleared to create farmland.
It is only a small pilot project, but its leaders say the microchip system has the potential to be a big step forward in the battle to protect the Amazon.
The chips allow land owners using sustainable forestry practices to distinguish their wood from that acquired through illegal logging that each year destroys swathes of the forest.
Each microchip tells a tree's story from the point it was felled to the sawmill that processed and sold the wood, key information for buyers who want to know where it came from.
"People talk a lot these days about wood coming from sustainable forestry practices -- this is a system that can prove it," said Borges, of the organization Acao Verde, or Green Action, which is managing the project on a large farm.
Brazil is under international pressure to reduce deforestation that destroys thousands of square miles of the Amazon each year and make the country one of the world's biggest sources of greenhouse gasses.
The project is part of a growing trend toward lumber certification that gives buyers a guarantee the wood was produced without damaging the forest it came from.
Unlike illegal slash-and-burn logging, selectively cutting trees can generate timber revenues without damaging forests, and, according to forestry experts, can in some cases even increase the amount of carbon dioxide the forests trap.
Acao Verde says widespread use of chips in trees would help eliminate corruption that allows illegally harvested wood to be "cleaned up" through bogus certification papers, and aid in spurring Brazil's sustainable forestry movement.
Similar projects in Bolivia and Nigeria use technology such as bar codes readers or satellite tracking to help crack down on illegal logging and preserve delicate ecosystems.
Such technology can help isolate fraud originating where the trees are cut, said Gary Dodge, director of science and certification at the nonprofit Forest Stewardship Council, which has led a global push for lumber certification.
"If there is fraud taking place between the forest owner and the mill, then a microchip would be great help in combating illegal logging," said Dodge.
Higher costs are a disadvantage to high-tech tracking systems, according to the Council, though a stronger certification system can help increase the selling price of the wood in some markets.
Acao Verde collected data on trees in 100 hectares (247 acres) of forest on the Caranda farm, which produces soy and corn but maintains native vegetation on a third of the land as required by law.
Forestry engineers attach chips contained in white plastic squares similar to office I.D. cards to each tree.
Landowners who adopt the system could cut down on time-consuming paperwork and reduce the need for inspections by environmental authorities, which for years have had tense relations with agribusiness in the region.
Farmers in Mato Grosso, many of whom were encouraged by Brazil's military government in the 1970s to turn forest into farmland, are warming to conservation and bristle at accusations they have no regard for the natural world.
"People out there still think farmers like us are destroying the environment. It's not true and we want to show that it's not true," said Patrik Lunardi, 26, whose family allowed the project to be carried out on their farm.
The state's main agribusiness organization this year began conducting audits of farm properties to determine which ones could sell carbon credits in exchange for maintaining forest standing on their property.
The microchips project has even won approval from those often least expected to support forest conservation measures -- loggers.
"I think it's a great idea," said Aristides Ferrari, 52, a logger. "We don't want to cut down all the forests, on the contrary -- we want to make sure forests remain standing so we can continue working."
(Editing by Stuart Grudgings and Jerry Norton)