So you thought sheep grew fat on grass?

Sheep, they used to say, may safely graze. But that was before farming became industrialised.

Last week, it was revealed that sheep had been infected with BSE after eating contaminated food. That was an experiment, carried out under laboratory conditions.

But what do all those sheep in the hills and fields actually eat? Don't they just grow plump on a diet of fresh upland grasses, as the meat producers tell us?

Not quite. In its report on the experiments, cited by Douglas Hogg, the agriculture minister, in the House of Commons last week, the Spongiform Encephalopathy Advisory Committee revealed the production of manufactured feed for sheep has more than quadrupled since 1980.

In that year, one tonne of sheep feed was produced for every 230 sheep; in 1984, one tonne for every 125 sheep; in 1988, one for every 90 sheep.

Since then, the increase has slowed - to one tonne for every 80 sheep in 1992. But, until July 1988, the manufacturers were allowed to include animal offal and bone meal in the animal protein element of the feed for cattle and sheep. Only then did it become illegal to feed mammalian protein to farm animals.

Most sheep today consume a cocktail made up from cereal grains, oil seeds, legumes, soya products, barley and pasta by-products and the by- products of food processing. And the animal protein element is provided mainly from whey and milk powder, and fish-meal.

As their business has grown, Britain's 90,000 sheep farmers have become more dependent on manufactured feed. The sheep industry earns farmers pounds 1.2bn from the domestic market, plus a further pounds 280m in export sales.

Phillip Saunders, of the Meat and Livestock Commission, said: "British lamb has been a tremendous success. As the sheep became more profitable it became economically worthwhile to supplement the grass they eat naturally with concentrates.

"There is only a fixed amount of grassland, and extra stocking requires extra feeding. The other factor behind this trend towards manufactured feed is that farmers used to make their own feed supplements, but with lower manning levels it is no longer viable - so they buy manufactured feeds instead."

So there is a theoretical risk that some sheep could have been infected with BSE - but, as Mr Hogg said, the advisory committee had found no evidence that it had actually happened.

Consumers appear to have accepted his assurances. The kilogram market price for lamb dropped 17p following last week's reports. But by Friday prices were just 6p down and, it is predicted, they will have recovered completely by the middle of this week.

Beef seems to be recovering, too. The demand for mince has increased by 22 per cent over the past fortnight.

The Meat and Livestock Commission chairman, Don Curry, puts the rise in demand down to the introduction of the Quality Minced Beef Standard. Four out of five meat retail outlets now carry distinctive blue and red rosettes on their packs of mince.

A commission spokesman said: "The rosette is proof to the consumer that the mince has no added offal and is in fact just prime meat. Mince was the worst hit of the beef meat products but now we are winning back our market."