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AFAIK, there are no other parties you can settle on the farm.
The alternative to fighting them or giving them the farm is just ignoring the quest. Its only like 2 points you give up. Nonlethal fight approach isn't really acknowleged.
I ended up giving them the farm and didn't have any regrets. You take a small prosperity hit, but the Kids really are grateful for the chance, and if you visit them at the farm you get a very nice gift and piece of mind. People from your village help teach them to farm too.