Many people don't do that, for sake of it violating realism. It's been discussed before. I did it once before I decided I just didn't like the idea behind it.
People can always make excuses, of course. Perhaps there are implied locks and spillways to allow the water to pump itself uphill. Dwarves are, after all, engineering experts, considerably superior to human engineers of the time. They haven't invented machines or steam engines in the game world yet, but as far as their technological developments go, I imagine that it would be within the next century for the dwarves, and at least several centuries (possibly even a whole millenium) for the humans.
Incidentally, isn't that farm exceedingly dangerous? Not only does it have the possibility of backwashing right out of the mountain past the floodgate, but if you forget to lock the control room with the dwarf still inside, the dwarf pulling the lever is as good as dead and the map will permanently flood. =)
It's always better to build a disjoint control room that doesn't connect to the farm in any way. That way, even if the farm begins to flood where it shouldn't, the dwarf who pulled the lever can be quickly ordered to pull it again before the water manages to source itself with a river.
[ February 13, 2007: Message edited by: JT ]