Farms work together with Combines to harvest Wheat, Potatoes or Carrots. The Farm needs to have Dirt and seeds placed inside before it will start. Once started, it clears a hollow 15*5*15 (X-Y-Z) block area, it begins on level with the farm and clears upwards. You need a BuildCraft compatible engine to make the farm start. It will leave a 9*9 area hollow for you to put other things (like Pipes, Engines, chests, etc.). The Farm can be supplied with Dirt and Seeds from any side as well as powered from any side.
The Farm first clears the 11*11 to 15*15 area to place the dirt in (even if there was dirt already there). Then, it places tilled dirt in the area. In the 13*13 spot, every 3rd or so block is left out, and water is placed in the spot when the hole is completely enclosed (make sure you have the bottom plugged up or else it will spill out the bottom.). After placing the tilled dirt and water, the Farm will start planting seeds until it runs out of seeds or space. As the wheat grows and is harvested by the Combine, the farm will plant more wheat as there is space available, or runs out of seeds. If the Farm is connected to the Combine with pipe that transports seeds, you should never really need to refill the seeds.
This video demonstates how to use all forestry farms, including the farm.