Farms are always surrounded by farmland for a large area. Building on farmland does cost more, but the production of farms nearby is not affected.
The house(s) accept 1/8th passenger - so several farms on a small area may accept Passengers.
If you want to place farms, remember that they must be built at least 3 tile heights below the (upper) snow line (sub-artic climate), or outside of deserts (sub-tropic climate).
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