First it was Baba Ramdev who sought to create a niche market for cow ghee and also helped unlock the real value of milk fat, so to speak. The row over the alleged supply of adulterated ghee for making the iconic Tirupati laddus, distributed as prasadam to devotees at Andhra Pradesh’s Tirumala Venkateswara temple, may further reinforce this premiumness. Milk fat is inherently expensive. Its current ex-dairy price of Rs 460-470 per kg is way above the Rs 125-130 wholesale range for refined palmolein, soyabean or sunflower oil. Beef tallow is available even cheaper, at Rs 85-90/kg. Not surprising that ghee or melted milk fat is prone to adulteration by “foreign fats”, both of vegetable and animal origin. The relative expensiveness also explains why a lot of what sells as ice-cream is actually frozen dessert: Both contain minimum 10 per cent fat, but the source of that is vegetable oil, not milk, in the latter.
Premiumness has largely to do with availability. India imports 150-160 lakh tonnes (lt) of vegetable oil every year, over and above its domestic output of 100-105 lt. As against that, organised dairies produce hardly 4 lt of milk fat annually, much of which goes for their own reconstitution/rebalancing use or for ice cream, butter and ghee sales in consumer packs. It leaves not much for marketing as a bulk commodity, whether in 15-kg tins or 15,000-litre tankers. Households may meet their ghee needs substantially from the cream skimmed off the daily milk they consume. But this cannot be so with sweetmeat shops, hotels and other buyers who claim their product to be made from pure desi ghee. The Tirumala Tirupati Devasthanams’ own annual ghee requirement is about 5,000 tonnes. That’s the equivalent of 12.2 crore litres of cow milk with 4 per cent fat — not small at all. The probability and temptation of lacing ghee with foreign fats is more when it comes to supplying such large quantities.
The Tirupati laddu saga may lead to consumers becoming more conscious of ghee quality and switching from loose or local to reputed brands. That, together with crackdowns by the authorities and overall reduced supply of adulterated material, could further push up milk fat prices in the short run. The government can help by cutting the goods and services tax on ghee, butter and other milk fat from the current 12 per cent. It makes no sense when vegetable fat and milk powder are taxed at 5 per cent. Milk fat is already costly. Taxing it higher makes it costlier and even more vulnerable to adulteration. There’s no better time to fix the anomaly than now.
