Cottonseed is an aspirational crop for smallholders newly incorporated in the global cottonseed commodity chain as own-account cultivators in South India. The labor to produce cottonseeds, which are hybrids, in the field is excessive. Multinational and Indian corporations depend on hybridization to protect their intellectual property rights in branded seeds. As wage rates rise and seed prices do not, the outsourcing of cottonseed production to smallholders is attractive to capital. It is mostly the unpaid, family labor of smallholders which now generates exchange value. While smallholders dream of spectacular gains and some success stories seem to support this, growing cottonseed is a risky business and, at times, the returns to smallholders are so low that the very costs of reproducing family labor are unmet; many go into debt. Yet, smallholders from a formerly untouchable caste, or Dalit, community, who just a short while ago worked as ‘cottonseed children’ for rich farmers are, for the first time, proudly growing cottonseed on ‘their own plots of land’ and ‘laboring for themselves’. To explain this paradox I propose a vernacular calculus of the economic, a noneconomistic grid, for understanding why Dalit smallholders continue this form of production even when they could earn more from wage labor. I argue that the rearticulation of caste in terms of dignity and perceptions of autonomy shape this calculus. I argue further that Dalit smallholders experience the inherent contradictions of capitalism through a ‘structure of feeling’ marked by perplexity. At a time when smallholder contract farming is being suggested as a new development strategy by the World Bank and questioned by its detractors, a vernacular calculus of the economic and affective experiences marked by perplexity may be more widely relevant as generalized characteristics of smallholder capitalism.