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.
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.
