The total, down from $829 million the previous year, is the lowest recorded since MIS surveys began.

AAG director Tim Lee said the sector would face many changes after investigations were completed by the Australian Securities and Investments Commission, and the parliamentary joint committee on corporations and financial services.

Irrespective of any changes in regulations "the agri-MIS industry will face significant challenges", he said.

It must overcome sliding consumer confidence and rebuild agribusiness' investment reputation.

Mr Lee said the sector had been hit by the lingering drought in many regions, the global financial crisis, and the uncertainty surrounding future tax deductions, despite the favourable Federal Court decision in December 2008.

Then came the collapse of the two largest MIS operators, Timbercorp and Great Southern, just before the major selling season near the end of the financial year.

In 2008-09, the number of individuals investing in MIS fell by 69 per cent to 7560 from 24,300 the previous year.

Timber investments still accounted for 90 per cent, or $227 million, of total funds raised in 2008-09, but horticulture investments plunged by 95 per cent to $13 million.

Other key findings of the AAG survey were:

¦ The average project investment was $31,402, down 45 per cent from $57,603 the previous year.

¦ There were 26 investment offerings, down 54 per cent from the previous 57.

¦ Of funds raised in 2008-09, 90 per cent will go towards the timber sector, with about 21,000 hectares of trees planted.