Why are earthworms considered farmer's friends?

The correct answer is Option (1) → Due to their role in fragmentation of detritus and loosening of soil

Earthworms are called the farmer’s friend because they break down complex organic matter and loosen the soil. As detritivores, they break detritus into smaller particles; this first step of decomposition is called fragmentation. Smaller particles give microbes more surface to act on, and loose soil lets air and water reach the roots.

Option (1) Due to their role in fragmentation of detritus and loosening of soil — Correct. Fragmentation of detritus and loosening of soil are the two reasons the book gives for calling earthworms the farmer’s friend.

Option (2) Because they immobilise nutrients within the soil — Incorrect. Earthworms do not lock nutrients away. By breaking up detritus they help decomposition, and decomposition ends with mineralisation, which releases inorganic nutrients into the soil.

Option (3) Because they slow down the process of decomposition — Incorrect. Earthworms speed up decomposition. Fragmentation is its first step and makes the later steps faster.

NCERT Extract:
Decomposition – “You may have heard of the earthworm being referred to as the farmer’s ‘friend’. This is so because they help in the breakdown of complex organic matter as well as in loosening of the soil. Similarly, decomposers break down complex organic matter into inorganic substances like carbon dioxide, water and nutrients and the process is called decomposition.”
Decomposition – “… Detritivores (e.g., earthworm) break down detritus into smaller particles. This process is called fragmentation.”