SMALL farm dams are capturing up to 124,000 megalitres of water a year in northern Victoria's drought-stressed Loddon and Campaspe catchments.

Irrigators and catchment management authorities say farm dams are capturing a far larger proportion of the catchments' runoff than ever before, exacerbating the slump in river and major storage inflows.

North Central CMA chief executive Damian Wells said there were about 8000 small on-farm dams in the catchment above Lake Eppalock, with the capacity to hold about 24,000 megalitres.

Lake Eppalock only currently holds 21,214 megalitres, 7 per cent of its capacity.

Mr Wells said CSIRO's Sustainable Yields Project report found small farm dams were capturing an increasingly larger percentage of each catchment's rainfall runoff.

"In the past we worked on the theory that these dams captured 6-8 per cent of inflows," Mr Wells said. "But in the past 10-12 years, CSIRO estimates that's grown to 29 per cent."

The estimated level of small farm dam capacity in the adjacent Loddon catchment is about 80,000 megalitres, much of it above the Cairn Curran Reservoir, which currently holds 9108 megalitres, or 6 per cent of its capacity.

Mr Wells said much of the recent dam development was the result of demand for lifestyle properties in the southern end of the catchment.

Irrigators fear their security of supply is being eroded by lifestyle property owners building thousands of these small dams in the catchments above major irrigation storages.

Loddon Water Services Committee chairman Alan Rothacker said many of these small dams weren't even being fully utilised, but were simply built for their aesthetic value.

"They're losing a lot (of water) in evaporation and seepage," Mr Rothacker said.

"I think there's an argument for piping water to some of these properties, rather than allowing unregulated construction of these dams."

Mr Wells said the North Central CMA, Coliban Water, Greater Bendigo City Council and Goulburn Murray Water corporation had signed a memorandum of understanding on finding solutions to the impact of farm dams on the Campaspe and Loddon catchments.

"A lot of the feedback we've had is that someone might have five dams and only needs one and would happily rationalise them," Mr Wells said.

"I think there's some low hanging fruit (water savings) that this deal could deliver."