The Northern Victoria Irrigation Renewal Project has reacted strongly to findings published in the Productivity Commission's draft report Market Mechanisms for Recovering Water in the MurrayDarling Basin.

Among the commission's recommendations was the removal of the four per cent water trading cap and a finding that questioned the costeffectiveness of infrastructure upgrades when capturing environmental water.

Commissioner Neil Byron said meeting communities and listening to feedback would help with the final report, due on March 18.

"If people are able to come up with things we might have left out, or offer an alternative point of view, then we will be more than happy to look at those for our final report," he said.

The meeting of about 30 major water stakeholders was what Mr Byron called "quality not quantity".

The commissioner called for closer examination of the current Water Act (2007), claiming environmental water allocation was over-emphasised.

"Did anyone read the act they were passing?" Mr Byron said.

"The way it is at the moment, the frogs, the fish and the birds can have as much water as they want - humans can have what's left over.

"I think that's insane."

A controversial finding of the draft report was that investment in infrastructure is an inefficient means of achieving water savings for the environment.

NVIRP chief executive Murray Smith said this finding was "at odds" with his company's view.

"The report fails to recognise the multiple objectives of infrastructure investment or the key role often played by irrigation infrastructure in delivering environmental water," he said.

Mr Smith said infrastructure works gave millions of dollars back to the Goulburn-Murray Irrigation District.

"Accounting for flow-on effects within the region, total GMID income (the regional equivalent of GDP) is estimated to increase by $475 million per year after full implementation (of the upgrades)."

Mr Smith said he was unhappy with the "tone" of the report, and said NVIRP would like to see a "more balanced view supported by evidence that recognises investment in infrastructure does more than just generate water savings for the environment".

However not everyone was upset with the draft report. Southern Riverina Irrigators were mostly pleased with the findings, claiming it only needed some clarification in certain areas.

"Overall we think the report captures most of the concerns of the community and the irrigation industry as a whole," chief executive Louise Burge said.

"(But) we're concerned that environmental health seems to be based on a purely volumetric measurement - the amount of water should not be the only component considered."

Ms Burge said she thought the consultation process was positive throughout the drafting of the report, which allowed for community involvement every step of the way.

jordan.oliver@sheppnews.com.au

Key findings of the report:

The four per cent water trading cap should be removed.

There should be more balance between environmental water allocation and other uses.

Investment in infrastructure is an inefficient means of achieving water savings for the environment.

Purchasing water products from willing sellers is the most effective and efficient means of acquiring water.

The Federal Government should adopt a portfolio approach to purchasing water products, and not focus solely on water entitlements. Seasonal allocations, leases on entitlements, options contracts and contracts for environmental services should be considered.