Tropical dry forests are under high and rising pressure from agricultural expansion, resulting in widespread forest conversion and fragmentation. Additionally, remaining forests experience a range of edge effects through agriculture once it has been established, yet such agriculture-driven edge effects remain weakly understood. Focusing on the Argentine Dry Chaco, a global hotspot for deforestation, we utilized satellite-based forest structure indicators within a Bayesian Hierarchical Modelling framework to quantify and map agricultural edge effects on fractional tree and shrub cover, and aboveground biomass. Specifically, we assessed how far edges reach into forests away from the forest-agriculture interface, whether edge effects differ among post-deforestation land uses (i.e., cropping vs. ranching), and how edge effects evolve over time. We reveal large agriculture-driven edge effects in the Chaco, penetrating > 700 m into adjacent forests, with reductions of up to 41% in our structural parameters. Cropping was associated with much stronger edge effects than pastures, likely due to the combined effect of environmental (e.g., wind) and management (e.g., pesticide drift) factors, while silvopastures had much lower edge effects. Projecting our models across the region showed that 18% of remaining forests are degraded, with an estimated total loss of 92.3 million tons of aboveground biomass. Lastly, agriculture-driven edge effects intensified for long periods after initial deforestation (e.g., > 30 years for tree cover), suggesting agricultural expansion creates a degradation debt that unfolds over decades. We conclude that agriculture-driven edge effects are a major, yet often overlooked, consequence of agricultural expansion, leading to profound degradation far beyond the deforestation footprint. Despite their importance, these effects remain systematically underestimated in sustainability analyses, such as carbon accounting or biodiversity impact assessments. Our work supports views that conservation planning should prioritize large and contiguous forest patches to help maintain ecologically functional forests.