Bright line at the junction of two surfaces

Hi!
I saw the bright line after adding png image. The line is between the forest and the grass (see image):


I don’t know how to fix it. Please help.

This is the .blend file:
http://www.pasteall.org/blend/37006

For the tree material you can turn off Cast Shadows in the Material / Shadow panel or have the lights pointing from the direction of the camera or for the Sun lamp turn off shadows. For both these you would lose the shadowing at the base of the texture so not sure if you need that or not


Thank you!