The profitability of four farm-level fuelwood management alternatives were examined using benefit-cost analysis. The value of alder wood is based on the market price of a cubic meter of fuelwood sold in Saraguro, Loja, Ecuador. A sensitivity analysis of wage rate, fuelwood price, and project subsidies tests the effects of changes in key economic parameters on project profitability. Present trends in fuelwood demand and social externalities are examined and the subsidy bill is estimated for implementing an alder management plan.