Investor confidence in the agribusiness industry remains high despite drought, government intervention and tax ruling snags, Australian Agribusiness Group (AAG) research has found.
According to the sixth annual AAG Survey of Funds Raised, cash inflows into the beleaguered managed investment scheme (MIS) sector experienced a slight dip, raising $1.14 billion for 2006/07 period – just $2 million less than 2005/06.
However, despite the dip the research found investors spent more in the last 12 months, with the average project investment of $55,000 per investor for 2006/07, compared to $44,000 for 2005/06.
Timber investments received $672 million and non-forestry gained $237 million. Funds invested will generate $6.13 billion in farm gate income.
“In a year when much of the traditional agriculture underperformed and leveraged billion dollar subsidies, the MIS sector instead raised over a billion dollars and will generate over $6 billion in farm gate income,” AAG director Tim Lee said.
Timber and horticultural schemes attracted lower cash inflows than last year, at -4 per cent and -7 per cent respectively, while speciality timbers and wine/grape received a boost, swelling by 56 per cent and 24 per cent respectively.
According to a survey of MIS agribusiness fund managers by research house Adviser Edge, in 2008 non-forestry project investment could surpass forestry investment for the first time.
Percentages of cash inflows to non-forestry MIS have been creeping up – from 30 per cent in 2005, 40 per cent in 2006 and 45 per cent in 2007.
Adviser Edge managing director Shane Kelly said, managers may be gearing up for one final burst at the non-forestry market before it is closed by the Australian Tax Office,.
“Given there is only one year of non-forestry investment remaining and with improved confidence in agricultural markets, we believe that the industry is well placed to take advantage of improved investor sentiment in 2008 to again lift sales,” Kelly said.
New investment schemes totalled 48 for 2006/07, compared to 56 last year. Around 2150 people are employed by 2006/07 projects AAG found.
