The victims were targeted by a criminal gang who wanted to use their lands to grow lucrative palm oil, according to local indigenous leaders

Six farmers have been shot dead by a criminal gang who wanted to seize their farms to muscle in on the lucrative palm oil trade, according to indigenous Amazon leaders in Peru.

Local leaders in the central Amazon region of Ucayali say the victims were targeted last Friday because they had refused to give up their land.

A police report seen by the Guardian details how the farmers’ bodies were found early on Saturday dumped in a stream near the Bajo Rayal hamlet where the men had lived.

“It was a night-time ambush. They bound them by their hands and feet, then they killed them and threw them in a river,” Robert Guimaraes, president of the local indigenous federation Feconau, told the Guardian by phone.

The police report says most of the men had shotgun wounds to the neck and at least one was found bound by the hands and feet.

An eyewitness told the police the victims were attacked by up to 40 armed men who had their faces covered.

“We have received death threats from the same land trafficking gang,” Guimaraes said. “We are afraid for our families and we are asking the state for protection.”

“These peasant farmers have paid the price for the inaction of the state and the local authorities in tackling land trafficking,” he added, warning that the nearby Santa Clara de Uchunya community had also been threatened by land traffickers.

Guimaraes accused the local agricultural authority of handing out falsified land titles and said it also bore “direct responsibility” for the crime. A local investigation alleges former officials colluded in the falsification of land titleswhich were then sold to highest bidder.

“Everything points to regional government people being involved in trafficking land,” said Jose Luis Guzmán, an environmental prosecutor in the Amazon region which is plagued by illegal logging.

Julia Urrunaga, Peru director for the Environmental Investigation Agency (EIA), said: “The lack of clarity and consistency of land titling in the Peruvian Amazon has long been a ticking bomb for violent social conflict.”

After four years of investigations into land-grabbing and large scale agribusiness projects, the EIA had uncovered “chaos, abuses, violations of indigenous and local community rights as well as violations of environmental and forestry laws,” Urrunaga said.

“All of this with impunity in an environment dominated by corruption that ends up favouring large scale investors,” she added.

Observers fear the emergence of palm oil will fuel a new surge in land grabbing, violence and deforestation. Yet the Peruvian government is promoting expansion, claiming its cultivation will not threaten forests. At a UN climate change summit in September 2014, Peru signed a $300m (£191m) deal with Norway to reduce net deforestation to zero by 2021.

More than 120 environmental and land defenders have been killed around the world in 2017 so far, with many of the deaths linked to deforestation and industry.