There are strange looking, black-faced, long-tailed sheep grazing in vineyards around Mudgee. The practice represents smart farming.

"At the beginning of autumn we put the dorpers (South African meat sheep) into the vineyard," Lowe Family Wines farm and vineyard manager, John Grant, says. ''They clean up and fertilise all through winter."

Over a barbecue of dorper lamb and beef (also farm-grown), Lowe co-owner (with business partner David Lowe) Jane Wilson adds, "It all works in together. We plan to build up our free-range pigs, sheep, cattle and sell them to help market the wines," she says.

Many farmers around the town of Mudgee in the central west of NSW are working out better ways of producing wine, fruit and vegetables, olives and olive oil.

With seven vineyards, four olive groves and at least one orchard certified organic, it must be close to having the greatest concentration of organic operations in the state. There's no question it had Australia's first organically certified vineyard.

In 1971, Gil Wahlquist bought the land for what is now Botobolar Vineyard, planted grapes three years later and was certified with NASAA (National Association for Sustainable Agriculture, Australia) in 1988. Many think Wahlquist ignited the local zeal for farming with more cunning and less chemicals.

Before Botobolar, Wahlquist was a Sydney-based journalist who moved into public relations. "It was an interesting job," he says, "but I wanted to get out of the rat race." He and his wife, Vincie, hit on the idea of growing grapes.

He went to Mudgee in the late 1960s on the advice of a Barossa-based friend who had told him the area was the best place in Australia to grow wine grapes.

''It had altitude, from 430 to 1100 metres above sea level, which made it better than the Hunter or the Barossa,'' he says. "But there's one other thing: except when it rains, a lack of cloud cover. Because of this, during the growing season you get all this energy coming down from the sun. It's a great climate for growing anything. The thoroughbred racing industry fights to get Mudgee lucerne."

In 1994, the Wahlquists sold Botobolar to American expats Kevin and Trina Karstrom, who continue to produce organic wines on a beautiful 22-hectare property. Like Wahlquist, Kevin Karstrom was a refugee from the corporate world - in his case, a commodity trader with investment bankers Merrill Lynch.

In the 1970s, like-minded farmers joined Wahlquist growing organically in Mudgee.

In 1975, David and Lesley Robertson bought a 44-hectare block they called Thistle Hill. They planted cabernet sauvignon, pinot noir and riesling and in 1984 produced their first commercial vintage. By 1993 they were certified organic. When David died in 2001, Lesley continued producing award-winning wines with winemaker Michael Slater. Thistle Hill was sold eight years later to American neighbours Rob and Mary Loughan.

In 1984, Michael Sweeney and Jan Kenworthy arrived and developed Martins Hill winery. They were heavily influenced by Wahlquist, having discovered his wines before meeting him.

"It all started with Gil," Sweeney says. "Before he came there was no commitment to organic growing - the whole region was on a chemical treadmill."

Just down the road from Martins Hill is the Broombee organic orchard and vineyard, first planted by Sweeney and Kenworthy, then sold to Barrie and Gwen Corner in 1996. The property was certified in 1997 and today Barrie concentrates equally on wine, olives and stone fruit. His daughter, Christine, who is studying for a diploma in viticulture, has joined him.

Sweeney also grows olives and makes olive oil and is one of four local organic olive oil growers and makers. Another is Lakelands, owned by Knut Kammann, a 100-hectare property planted with 15 hectares of olive trees.

Kammann, a German industrialist, arrived in Australia in 1982 and bought the land in 1988. After using run-down pasture land for bushwalking, he decided to do something with it. "I'd spent some time on the Spanish island of Ibiza and I thought olives might also work here," he says.

In 1998 Lakelands was certified organic and in 2000 added a biodynamic certification. Today Lakelands produces up to 10,000 litres of oil and has won major awards in Australia and abroad.

Just outside Mudgee, on the Sydney road, is Farmer's Pantry. Here Georgie Kaspar serves 100 mile platters, made up of locally-grown products and produce including bacon, chorizo, terrine and other pork items made using the Ormiston free range pigs she and her husband, James, grow.

Georgie, an animal behaviourist, met James, a vet, in England. When they returned to Australia, they bought Ormiston and began raising Berkshire and Large White pigs.

Wandering the paddocks, watching pigs at play and resting beneath gum trees, James explains how the process works. "We bring the sows to farrow (give birth) which they can do in individual hutches or out in the open,'' he says. ''The boars we keep separately - they'd probably fight." He points to a big boar a paddock away. "That's Maguire,'' he says. ''He's got three girls with him to keep him company."

Ormiston is certified by Humane Choice, an organisation dedicated to livestock farming.

Up the road in Gulgong, Sarah Smith farms around eight hectares of vegetables and runs 100 free-range laying chooks - on her own. Although she works from sunup to sundown, she has no complaints. "My definition of retirement is to find something you love doing and do it for the rest of your life," she says.

Smith grows everything from bok choy to garlic, 40 rows of it at 100 kilograms to the row planted by hand. "The machinery is too difficult to get,'' she says. ''But once it's in the ground it just needs weeding."

She won't use herbicide because, although not certified organic, she uses strictly organic principles. "I'm one of a growing number of people who grow organically but see the red tape as binding," she says.

Spend time in and around Mudgee and you'll be left with the impression that here is a place punching well above its weight in sustainable and imaginative food and wine production - and with more than its fair share of mavericks, young and old.

Drop in to Roth's Wine Bar (licensed since 1923) on a Thursday afternoon to eavesdrop on a meeting of the Mudgee Microscope Club. Originally convened by Wilson and local agronomist Thea Ridley, club members bring soil samples for analysis and to improve their farming practices.

While a BYO Dirt club might sound a bit weird and nerdy to city dwellers, in the end we're the winners, with better wine, olive oil and meat. And so is the land, with farming practices that put back rather than take out.

Wahlquist may have left Mudgee but he's left a lot behind.

The author travelled with the assistance of Mudgee Region Tourism.