Are fairy and ferry exact homophones?

As pointed out in comments, Modern English does not have vowel length. The so-called "long vowels" are modern descendants of the Middle English long vowels, which were changed by the Great Vowel Shift into tense vowels, no longer than any other. Unfortunately, this happened after the rules of English spelling got more or less fixed.

So the original difference between fairy and ferry was long/short vowel, which changed to tense/lax after the GVS. But in American English there was a further development. The distinction between tense and lax vowels tended to neutralize before /r/. So most Americans don't distinguish between /ir/ and /Ir/ (here/hear), or between /er/ and /Er/, so ferry and fairy are exact homonyms.

This is a regional variation; in Rhode Island, for example, one distinguishes Mary, merry, and marry, each with its own vowel. But in the Midwest, where I come from, those are all homophonous.

Modern American English does not have phonemic vowel length. Americans, in fact, pay very little attention to vowel length, so it is quite difficult for them to learn to differentiate between long and short vowels in other languages. In American English, in the dialects that still preserve the difference between fairy and ferry, the difference is in the quality of the vowel: possibly /feri/ versus /fɛri/ (although different dialects will undoubtedly vary).

While this is somewhat controversial, I believe vowel length plays a role in modern British English. For an example of this, Lexico gives the current British pronunciations of bared and bed as [bɛːd] and [bɛd], differing only by vowel length; similarly, fairy and ferry also differ only in having [ɛː] and [ɛ].

Bared and fairy used to be pronounced the diphthong /ɛə/ in British English, and some British speakers, as well as some British dictionaries, still pronounce them that way. And while [ɛː] and [ɛ] are the only two vowels I know of that dictionaries give as differing only in length, I am convinced from listening to British speakers that some dialects also use length as the major differentiation between beard and bid; and between cart and cut.