I couldn't believe this at first, but I ran 20+ tests using level 11 farmers and a level 5 sword smith. There must have been a bug in a recent update because the sword smith is supposed to improve the farmer, not make him weaker. The sword smith increases the damage a farmer does by 50%. If the sword smith dies, the farmer still has that bonus. However the sword smith also slows the attack rate of the farmer down from 1.0 seconds to 2.0 seconds which is the same speed as a bowman.
Farmer - 325 damage, attacks every 1.0 seconds
Golden farmer - 487 damage, attacks every 1.0 seconds
Farmer with sword smith upgrade - 487 damage, attacks every 2.0 seconds
Golden farmer with sword smith upgrade - 731 damage, attacks every 2.0 seconds
The sword smith decreases the overall damage done by a farmer by 25%. Also one of the benefits of the farmer is his ability to interrupt the enemy's attack causing him to briefly pause for a small fraction of a second. With fewer attacks the enemy's attack won't be interrupted as often. Another drawback is that a 2 second delay between attacks means that your farmer can easily be killed before he has a chance to damage the enemy.
Note: I'm using iOS. Someone please do a test on a different device to see if it happens there too and post your findings. The easiest way to test is to fight a weak opponent with a level 4 gate and summon a farmer once you've cleared a path then count the number strikes and time how long it takes for the farmer to destroy the gate, then do the same test by summoning both the farmer and sword smith.
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That's why I never use it. The individual damage is higher but the slow down in attack rate is just not worth it.