Lockhart, a wheat-growing town midway between Sydney and Melbourne, has been mired in drought since 2002. Local elders dreamed up the idea of an early October weekend festival to raise spirits by shaking a fist at the big dry.

"What amazes me is how creative people are to continue to live on the land,” said chief festival organizer Marie van Steyn. “We've got women learning to weld. We've got women driving headers at 3:00 in the morning.”

The festival – art shows, tourist trails, music concerts, street parties and a deadly serious exhibition of agricultural sculptures fashioned from discarded farm equipment – is slotted in after the town's venerable Picnic Races.

With unshined boots, jeans and t-shirt, I certainly stood out from a crowd dressed as if for a coronation. I'd packed for a depression, not for a day at the races.

"Ten years ago the farmers around here were millionaires, but the drought – bad harvest after bad harvest – has done for a lot of them,” said air-conditioning contractor and keen race-goer Chas Bayer. “But people think 'What the heck!' and they come to the races to have a break. They realize they like life on the land. They go on.”

In the city we read about the indomitable spirit of country folk and here it was in bold print. The bar was doing good business, as were the bookies. It was all smiles and laughter, rather than grumpiness and self-pity.

"Things around here have been quite scary,” van Steyn said. “But if they could see this, it's truly the Aussie battler. The iconic Aussie battler is what we've talked about and this is what we've put on show.”

The tourism people in Canberra say city folk are reluctant to visit drought-bashed areas for fear of being branded ghoulish. But to the untrained eye, the effects of too little rainfall are hard to spot. The fields have crops in them and the birds still sing.

Allan Mulholland, a contractor in Lockhart, noted this anomaly. “People come around thinking they'll see dead sheep and empty farms. You can't see drought, but it's there in your bank balance. There'll be a few more go this year because the rain didn't come.”

There was a street party on Saturday night. A stage was set up outside the Commercial Hotel. Following a bevy of can-can dancers and the local chemist distilling the essence of a Les Miserables number, former Slim Dusty fiddle player Peter Denehy ran through his song list.

It was heaps of fun -- like being on the set for the happy ending of a film about a pecker-up country town triumphing over adversity.