I'm by no means an expert on google. I also don't know exactly what you consider a link farm. Just going from stuff I've read, the number of outgoing links, going out to other domains on a page, will bring the rank of that particular page down. While their may be more technical terms for how it works, it does follow logic that a page loaded with outgoing links will have little relevant content and is only some sort of directory, if not spam, and thus should be lowered in rank.
I've also seen things saying google is getting smarter about finding and dropping pages that are set up only to try to manipulate the ranking system.
Again, I'm no expert...Just throwing ideas.
