VICTORIA'S 4 per cent cap on water trade is in danger of losing farmer support after Water Minister Tim Holding rejected hardship provisions allowing struggling irrigators to sell water outside it.

The Victorian Farmers Federation has threatened to review its support for the cap in the wake of Mr Holding's refusal.

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The issue came to a head last Friday when Mr Holding signed off on a map defining which parts of the Goulburn Murray Irrigation District would be exempt from the cap.

The VFF had expected Mr Holding to also allow irrigators facing hardship in the non-exempt areas to sell up to 25 per cent of their high-reliability water and 100 per cent of their low-reliability entitlements to the Federal Government.

But Mr Holding dismissed the VFF's plea, despite Goulburn Murray Water, the Northern Victoria Irrigation Renewal Project team and his own bureaucrats urging him to support the hardship provisions.

VFF water council chairman Richard Anderson said Mr Holding's decision threatened to undermine irrigators' support for the cap.

"The VFF's position (supporting the 4 per cent cap) will be under pressure because there's no hardship provisions," Mr Anderson said.

"Don't be surprised if the membership comes out and calls for it (the cap) to be scrapped."

Sunraysia irrigators have already demanded the cap be scrapped and last Friday the Murray Valley Winegrowers joined the call.

MVW chief executive Mike Stone said growers were battling to survive in the face of the wine grape price slump and needed to be able to sell water.

"The predicament for many growers is that vineyards are no longer economically viable, loans must be repaid, buyers for vineyards without secure contracts cannot be found.

"Expenses are mounting and the only saleable assets remaining are water entitlements. But the 4 per cent cap prevents the sale, leaving already desperate growers in a hopeless situation."

Despite these concerns, Mr Holding is yet to detail any exemption criteria to the 4 per cent cap for Sunraysia irrigators.

However The Weekly Times understands Mr Holding's office is close to approving some Sunraysia criteria, although the details are unknown.

Irrigators are warning the government's delay in drafting and releasing the exemption criteria could cost them dearly, given the Federal Government launched its first round of southern basin water tenders this week.

A spokesman for Mr Holding declined to comment.