But Australian Agribusiness Group's (AAG) seventh annual survey of funds raised in the MIS industry show the sector still managed to raise $1.079 billion in the last financial year - down from $1.139B in 2006/07.

AAG's managing director Marcus Elgin says the fall in investment is the first decrease in funds recorded since the survey started in 2002.

"Factors like interest rates which impact on gearing levels, a lack of water and the way the test case for non-timber MIS has dragged on certainly wouldn't make the job of raising capital any easier, so I reckon it's an outstanding result," Mr Elgin said.

Funds raised in the wine grape category were the hardest hit, down by a whopping 46pc.

But AAG reports that timber projects raised 5pc more than last year, and that horticultural funds were up by 4pc.

AAG's research director, Tim Lee, says the results show the agri MIS industry has "stood up pretty well considering the global turmoil affecting investments and the lack of certainty surrounding tax rulings".

"A decrease in funds of only 5pc is a very good result and MIS is proving to be pretty robust when compared to general equities markets which have taken a real hammering," Mr Lee said.

Highlights from the AAG report include:

· there were 57 agribusiness offerings open for investment in 2007/08, compared to 67 in 2006/07;

· similar to last year timber received 65pc of total MIS funds ($705 million);

· horticulture investment increased by 4pc to $246 million but wine grapes decreased by 46pc to $42m;

· there were 24,500 individual investors who participated in MIS projects in 2007/08, 5pc less than last year; and

· 73pc of investments were geared in 2007/08 down from 77pc in the previous year.

While the report showed that Victoria will receive the largest amount of funds raised, Western Australia will see the largest area of new project development.

When allocated per head of population, investment will be the highest in Tasmania at $383 per person, followed by the Northern Territory at $230.

Victoria and New South Wales were the lowest at $46 and $27 per person respectively.