(This item is my contribution to Blog Action Day 2010, whose topic this year is "Water".)

Australia is being confronted with a national dilemma which has a major impact on its society and the environment, and it will take a huge amount of wisdom, courage, co-operation and, yes, pain to reach a stable outcome.

For too long Australia's largest river system, the basin of the Murray and Darling Rivers and their tributaries, has been bled dry through overuse. Many important and valuable industries have operated throughout its catchment area - food production, dairy and beef, wool, cotton, wine included. They have provided essential supplies for Australians and for people in other countries. Many small communities totalling hundreds of thousands of people are employed in those industries or their support services across the states of New South Wales, Victoria, Queensland and South Australia. Sales, including exports, help to drive the Australian economy.

But the irrigation requirements of these industries are killing the river system itself. In times of prolonged drought, there is not enough water to fulfil everyone's irrigation quotas, and what is left over is not enough to keep the rivers flowing. For eight years, the Murray River was not even flowing through to its estuary in South Australia - changing only recently, after water from floods more than a thousand kilometres upstream finally reached the ocean.

Political gridlock between the Australian federal and state governments has finally been broken to the point where there is a national authority, the Murray-Darling Basin Authority, that has assumed overall responsibility for the water management of this enormous catchment area. Last week they released the first in a series of discussion papers proposing action to reallocate water to balance the requirements of industry with the needs of the ecosystem.

The initial discussion paper of the MDBA states that a massive 7000 gigalitres of water needs to be retained in the river system to restore the natural environment to its pristine state. Recognising that this would devastate rural industries, they have recommended a compromise figure of around 3000-3500gL to be retained, thus reducing irrigation quotas to farms and industries by (depending where you are in the catchment area) approximately 27 to 45 per cent.

Pain is needed to save the river, its wide-ranging biodiversity and the livelihoods of its people, but this compromise proposal - put forward as the starting point of a consultation process - has met with strong opposition. There are many workers and their families genuinely concerned about the survival of jobs and communities. However there are also industry advocacy groups talking up wild rhetoric - operatives from bodies such as the National Irrigation Council asserting that the government is "Deliberately killing rural Australia", or describing the cut in irrigation quotas as a "tax" on primary industry - comments which are both reckless and a misuse of the English language.

More disturbing, however, are the suggestions that there would be "rioting in the streets" of country towns. This week, as the consultative process began with information sessions in major Murray-Darling town centres, there have been instances of the MDBA's discussion paper being burned in public (a curious old-world touch seeing as many people would have already read the PDF). Even more disquieting is graffiti stating "This means war" and daubing death threats to the Water Minister.

I would like to see advocates and rural community and business leaders openly condemn the more irrational behaviour of opponents to water reform. People have suspicions of government and lack of trust in politicians, but uncompromising self-interest is no longer the answer. Taking all the water today means killing the river tomorrow and killing the farm for future generations, as well as killing the production of food for a growing population, not just in Australia's coastal cities but across a starving world.

There is no greater dilemma in this whole debate than that of the future of the Australian rice industry. A highly water-intensive product, Australian rice is a valued export overseas, however the industry has also gone to great lengths to improve its water efficiency. The closure of Australia's rice industry may free up more water for other industries as well as the natural ecosystem, but would carry a substantial human cost.

After a hostile first week of the MDBA's consultation tour, the federal Minister for Regional Australia has established a parliamentary inquiry to assess the impact before any final recommendations are made. We are entering a critical phase in Australia's history where reallocation of water supply must bring societal and economic changes. Watch as this story continues.