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In Gods & Kings the Inca have a unique resource improvement called the Terrace Farm which basically does what you describe. But as for regular farms, you can actually build them on hills, but only if the hills are adjacent to a fresh water source, and even then they'll only provide the normal amount of food a farm will (+1 base, with another +1 with Civil Service/Fertilizer depending on fresh water access). This makes them seem non-lucrative, but only because farms build on Grassland or Plains already have food yields which add to the farm's yield, while the hill does not.
There are many mods that change this in various ways, but in the vanilla game (and vanilla expansions) the restriction is the same above. Granted, there should be a mod to allow you to build regular farms on any hill once you unlock Fertilizer, but then it would make Terrace Farms useless in the long run, which isn't fair to the Inca (who are already pretty weak in benefits besides their hill movement).
#dumbass