For the people who are concerned about the permissions used for this app, I asked the folks over at AndroidPolice.com if they could investigate and they followed up with the developers. Here's what they said:
We've gotten in touch with Herocraft, the developer of Farm Frenzy, about extra permissions that their game uses (such as access to contacts). The official word is that they are used strictly for the Tell A Friend feature and optional microtransactions. Herocraft does not collect information or spams your friends.
So apparently the permissions are only there so you can optionally choose to harass your friends about the app or to buy micro transactions. Case closed!