An environmental group is arguing for an irrigation water buy-back instead of the second $1 billion stage of the Foodbowl Modernisation Project, but the idea has come under criticism from a project founder and the body charged with implementing it.

Goulburn Valley Environment Group believes the money should be spent on a big buy-back instead of the stage two infrastructure upgrades.

The group does not expect the target of 200 Gl of water savings can be achieved in the second stage.

However one of the Foodbowl Modernisation architects, John Corboy, has described the approach as "short term" without having any regard for the upgrade of the irrigation system.

And Northern Victoria Irrigation Renewal Project chief executive Murray Smith said many of the streams and wetlands would now be without water if not for the irrigation infrastructure.

The environmentalists are worried that climate change could result in big reductions in stream flows, while the Goulburn River has no high reliability water allocation.

Group president Helen Reynolds said the group had supported stage one because of the share of water for the environment, but was pessimistic about whether the touted savings could be achieved.

"It doesn't look like the savings will be there and the government has not yet come up with a business case.

"We are not opposed to irrigation upgrades but we are looking for water for the environment," Ms Reynolds said.

Mr Corboy said he thought the environment group would have looked at a longer-term solution.

"The buy-backs are a short-term option," Mr Corboy said.

He said the irrigation upgrades were a crucial part of the modernisation project, which would offer not only an environmental water share but would also provide other benefits.

"There is no doubt that our irrigation system in its present condition is an environmental liability.

"Let's not forget that less than two decades ago, the issue was salinity. Unless everyone believes were are in a perpetual drought, that issue could raise its head again."

Mr Smith said irrigation infrastructure was clearly demonstrating its importance for both the environment and irrigated agriculture in the current climate.

"Investing in modernising the GMID is one of the best defences for the environment against the uncertainty and risk posed by drought and climate change," he said.

"NVIRP, with the completion of stage one and stage two, will provide for up to 175 Gl of callable, tradeable environmental entitlements that will provide environmental managers with the flexibility to use water for whatever the environmental priority is at the time.

"It also enables environmental managers to manage temporal risks through carryover and to utilise the market wherever this provides an environmental benefit.

"NVIRP will increase the capacity to deliver environmental water when and where it is required - a balanced investment decision."