This is the typical utopian dream that is complete horse manure. We like to look back and think how quaint and healthy things were but they were not. While there are a lot of improvements to be had in our current supply chain, going back to smaller farms is not the way to get there.
What you described would be more costly and I don't think there is really any relationship to health. Your food would end up being more expensive as most of the things you listed cost very little in the grand scheme, labor is the most expensive part.