Two years ago the water in Lake Gatun, a vital supply for the Panama Canal, dropped dramatically during a drought. Major shippers had to send cargo 10,000 miles around Cape Horn.

The incident shocked canal operators, but not the scientists who have been studying its watershed. Over the last 25 years, 35 percent of the dense tropical forests above the canal have been burned for farms and pastures. Without forests to soak up rain and hold the soil together, the balance of nature is giving way floods, droughts and massive erosion.

A recent State Department report concludes: "By the time the United States transfers the canal to Panama, the canal may have become a worthless ditch, a colossal monument to resource mismanagement."

What is happening in Panama is happening elsewhere in Central America, in Southeast Asia, in Africa and throughout what was once a broad green belt stretching around the earth from the Tropic of Capricorn to the Tropic of Cancer.

Roughly half the earth's forests have disappeared since 1950 and the bulk of destruction has been in tropical zones. At the present rate, more than two-thirds of the world's remaining rain forests will be gone by the turn of the century, scientists say.

It is, they say, an unprecedented ecological disaster with economic repercussions as serious as the oil crisis. Timber and firewood shortages, inflation, destruction of rivers and agricultural land and widespread extinction of potentially useful species of plants and animals are the predicted consequences of deforestation.

Tropical forests harbor a fourth of the world's species of plants and animals-more than any other ecosystem. The bizarre and the beautiful are commonplace: orangutans and marmosets, ocelots and jaguars, hummingbirds and hyacinth macaws, scaly anteaters and two-toed sloths.

Biologists predict deforestation will cause the extinction of a staggering half million species-one-fifth the world's total-by the end of the century. Many U.S. songbirds and water-fowl that winter in Central America could disappear.

Most of these species have yet to be discovered, much less studied for potential uses. World agriculture depends on a vast gene pool to develop new grain hybrids when pests and disease destroy crops. Forty percent of all medicines derive from wild plants and animals.

"When you cut down a wet, lowland tropical forest, what eventually grows back is something completely different," says Gerardo Budowski a Venezuelan scientist. "Instead of the rain-forest's 300 tree species, a secondary forest might have only 10."

In Central America, forests are becoming a major political issue. Articles and editorials on the subject abound. New laws are being passed and politicians are jumping on the bandwagon.

"Young people must decide what sort of country they wish to inherit: one devastated ecologically, or one in harmony with the environment," declared Costa Rican President Rodrigo Carazo in announcing his Plan of Action to save the forests.

Carazo said 150,000 acres are destroyed a year-a rate that will "cause the disappearance of the country's forests, except for those in protected areas, before the year 2000."

However, while Costa Rica is setting aside parks and forest reserves, it has yet to deal with what scientists. say is the heart of the problem: the conversion of forests to cattle ranches the lucrative U.S. market.

"The situation is getting desperate," said Joseph Tosi of Costa Rica's Tropical Science Center.

Local beef consumption has dropped sharply while "the country gets more foreign exchange to buy cheap Japanese cars and the tiny cattle oligarchy is further enriched," he added.

Guatemala has lost 65 percent of its forests sicne 1950. The Motagua River, once a principal artery, has lost more than half its volume. Settlers have invaded a third of the enormous Peten jungle, but the land, unsuitable for agriculture, is reverting to brush.

President Romeo Lucas Garcia had declared 1979 the Year of Reforestation. An emergency law was passed to require every student to plant 20 trees a year, and convicts to plant 50 each. Income tax breaks are offered for tree plantations.

Under pressure from exploding population and food demand, Latin American countries have pushed settlement schemes to avoid demands for land redistribution. Brazil encouraged thousands of farmers to burn vast areas of the Amazon, only to find the land was useless after a few seasons.

"Most of the good land is already occupied," said Budowski. "What is left is poor soil-too wet, too dry or too steep."

Countries that oppose such settlements seem powerless to stop it. Thirty thousand families are living within Venezuela's supposedly protected national parks and forest reserves. In Thailand, dozens of forest guards are killed in gun battles each year.

"It's very difficult," said Steve Knaebel, an Agency for International Development official. 'You've got a guy who's barely eking out an existence. You can't talk about the beauty of nature."

Some of the most tragic consquences of forest destruction can be seen in El Salvador, the most over-populated country in Central America. About 93 percent of the forest has been sheared and what remains is "denuded, parched land like in the African Sahel," according to Gary Hartshorn of th Tropical Science Center. Firewood, on which most people depend for cooking and heating, is critically short. The major Fifth of November hydroelectric dam is silted up after only 30 years of operation.

Whether it is Guatamala, where 40 percent of agricultural land had been destroyed by erosion, or India, where massive floods have occurred, or the Philippines, where timber products are now imported instead of exported-the pattern is the similar around the world.

Governments open the jungle to timber companies that build roads. Hungry settlers move in along the roads, with or without official sanction. They cut the trees, burn the brush and plant crops.

But the rich green of the rain forest is an illusion.The land underneath is barren after the nutrient-giving vegetation is gone. The farmers abandon the land after a year or two of cultivation exhausts the soil. Sometimes cattle operations move in for a few years. Frequently, the rains wash topsoil into the rivers and the relentless tropical sun bakes the earth to a hard crust.

Foreign aid programs contributed to deforestation.

"A wide range of well-intentioned development programs, including beef export promotion, veterinary medicine, population resettlement and the extensive upgrading of rural roads can place great pressures on the forest," a State Department report concluded.

Roland Clement of the Audubon Society wrote the State Department last year opposing AID's vampire bat control program as a "subsidy to rich cattlemen," who push small farmers off their land.

Michael Wright of the Nature Conservancy suggests, "For the U.S. to lower meat import quotas might be the single most important thing we could do to save dry tropical forests."

U.S. officials aren't ready to do that, but AID is funding satallite forest surveys and spending million of dollars for watershed management in Panama and other countries. The World Bank is switching from pulp and paper-mill projects to community woodlot development.

According to the Global 2000 study a major U.S. government survey to be released this summer, the world's exploitable timber will be cut in half by the end of the century, causing a severe energy crisis to be 1.5 billion people-about a third of the earth's population-who rely on firewood for cooking and heating.

The World Bank figures 50 million acres of trees would have to be planted in the next 25 years to meet basic firewood needs, but it predicts that no more than 5 million will be. CAPTION: Map, no caption, By Richard Furno-The Washington Post