Hoes are used to till soil for harvest. To till either dirt and grass. Shift-click a dirt or grass block within a three block radius of water. The block will turn into farmland, ready for planting seeds.
Hoes using two sticks and two wooden planks, cobblestone, iron ingots, gold ingots or diamonds. Each makes their respective type. In order from worst to best, these are the tiers: Gold, Wooden, Stone, Iron, then Diamond.