Step 1: Evaluate the Assertion.
Assertion: "Earthworm is harmful for agriculture."
This is false. Earthworms are beneficial to agriculture. They aerate the soil, promote nutrient cycling, and enhance soil fertility.
Step 2: Evaluate the Reason.
Reason: "Earthworm breaks down the soil into smaller pieces and makes it finer."
This is true. Earthworms digest organic matter and mix it with soil, improving soil structure and porosity.
Step 3: Conclusion.
Since the assertion is false and the reason is true, the correct option is:
\[
\boxed{(4)}
\]