One thing to do, as a good start, is to encourage separate regulatory requirements for different sizes of farms. Having one-size-fits-all regulations discourages small scale farms causing the smaller farm to borrow for equipment that it actually shouldn't need. It is over-regulation through under-funded regulation. You see that the underfunded over regulation discourages situations where animals are treated more individually. Nobody knows what they look like, and they don't have names. They are numbers on a spreadsheet.
Why may a hunter not sell venison to a butcher? Its not any more dangerous than the pork in the store, but government encourages larger scale operations, pig pens and assembly line meat production. Regulatory agencies often have to deal with funding cuts. They streamline. They develop regulations to cover everyone. That's why.
If a mom and pop want to have a goat and sell the milk guess what? They may have to abide by the same regulations as Marva Maid, so they may have to acquire some equipment that isn't actually necessary. They may not be able to simply sell the milk to a shop. They may not even be allowed to sell it to a friend. Why then go to the trouble have having a goat? Most people just buy cow milk. They usually only buy a goat if they need shrubs eaten or want a very stupid pet that jumps almost any fence.