Impossible. The world is too urbanized, there simply is no space to do this for more than a few % of the population.
> Way too-many of the problems plaguing society atm can be solved by reducing transport and eliminating all the huge intermediate steps [...]
Maybe some problems can be solved, many more will be unsolved. Reducing our transport capacity of food increases the vulnerability to crop failures. De-centralizing processing will make it harder (read: more expensive) to test for pathogens, nutrients and ensure hygiene.
> we'll be be contributing less to AGI/automation and creating actual valuable jobs
No, we would be shrinking the GDP by moving labour from highly productive sectors into agriculture. At the same time food will become much more expensive, even more so if those new employees are paid minimum wage.
> and eliminating all the huge intermediate steps between our food (other other food-related products) and ourselves
How? You're simply replacing one set of steps for another, more labor-intensive one. I encourage you to visit one of those museums where people demonstrate how people in the 18th century lived for some perspective.
> we'll be reducing the amount of plastic, fuel and electricity used for transport, storage, processing, packaging,
You didn't quite state the full conditions to achieve this reduction, so I'll do it for you. Basically we have to completely change our diets. Fresh food can only be eaten in season, and only what is locally available. We can only store food that does not need climate control to keep, so in winter there are only conserved vegetables and fruits. Not using any modern packaging and storage methods means that even in season things have to be eaten really quickly.
On the whole, your insinuation that our food distribution is some kind of unnecessary luxury that we can do away with just rubs me the wrong way. It is the reason the amount of people in famine has been dropping every decade despite a population explosion. It ensures that there are no mass-scale outbreaks of botulism, moulds and other pathogens that used to kill lots of people and waste huge quantities of food. Its efficiency (along with high productivity) guarantees that almost everyone can afford to eat sufficient nutrients even through winter.
Sure we could get some of those benefits in your agrarian fantasy, but the cost would be enormous.