VICTORIAN irrigators have urged the Federal Government to invest more of its $12.9 billion Water for the Future fund in on-farm water savings.

Victorian Farmers Federation water council chairman Richard Anderson said irrigators had the capacity to rapidly deliver on-farm water savings to the Federal Government.

He said irrigators were more likely to increase water efficiency because they knew the technology.

"It's a lot easier for farmers, who know what they can do on farm, to save water than water authorities and governments spending years developing major infrastructure projects," Mr Anderson said.

"You could offer irrigators $5000 a megalitre on water savings up to a maximum of, say, 20 per cent of their high security water shares (and) I'm sure you could get that water in 12 months."

Mr Anderson said the deal could include allowing on-farm water savings to be exempt from the 4 per cent cap on the annual water entitlement trade out of the state's irrigation districts.

He criticised the Federal Government's recently announced exit grant package to assist small-scale irrigators.

Mr Anderson said the package lacked detail and effectively gave irrigators up to $10,000 a megalitre for their water.

Last month, Federal Water Minister Penny Wong said the exit package would deliver grants of up to $150,000, plus two lots of up to $10,000 to assist irrigators on less than 15ha exit the industry, but keep their houses and land.

The short-term scheme will be available this financial year.

Access is conditional on irrigators selling their water entitlement to the Commonwealth to be returned to the basin's rivers and wetlands.

The Government expects to gain up to 48 gigalitres of water for the environment.

South Australian Murray Irrigators has already criticised the scheme, saying that if the Government was serious about acquiring water, the size of the irrigator's property would be irrelevant.

SAMI deputy chairman Tom Martin said the proposal could result in the Government paying $4000 a megalitre for 100 megalitres of water from a 15ha property as opposed to them paying $5500 a megalitre for 50 megalitres of water acquired from a smaller irrigator.

"The value of water should be the same for everyone," Mr Martin said.