The student pilot was undergoing a conversion onto the aircraft type. As part of the conversion, the instructor closed the throttle and requested the student to demonstrate a forced landing. At about 600 feet, the instructor, being satisfied with the exercise, advised the student to go-around. The throttle was opened but the engine did not respond. The instructor took control but was unsuccessful in his attempts to restart the engine. The aircraft was landed in a paddock and ran through a fence. The exercise was carried out conforming to the checklist requirements, one of which was to switch the fuel boost pump on. Investigation revealed that the engine would not idle with the pump on. The engine had been out of service, unpreserved, for 17 months and the fuel regulator diaphragm was sticking to its guide and seal assembly causing the engine to run rich at idle and stall. Although the instructor took control at 600 feet, attention was diverted from the forced landing to restarting the engine.