Food production scales up nicely, and it has many other potential benefits than just being cheaper. Say we fixed incentives that promote low-quality food (we have to do it either way, since small farmers are as much incentivized to sell crap as big ones; a big part of "organic food" industry seems to be about that). The big AgriCorp, if incentivized to make good food, can actually care about it better. They have more money to get top-of-the-line tools, or build their own. They can use them more efficiently. They have enough resources to monitor and control the farm in much greater detail. They have more expertise on hands. Am I seriously supposed to trust a Joe Random Farmer more than a professional biotechnologist or agriculturist from Monsanto or DuPont? If so, why bother with this whole thing called "science" at all?
It seems to me that the work needed to restore the quality of our food makes big farms an even better option than they're now. The issues are, ultimately, with economic incentives that promote everything but health aspects of food.