The answer to the question in the title, at least in the context of consolidation and food safety, seems to be "no" according to this article by Anne Kim in Washington Monthly.
The subtitle of the article indicates:
“A consolidated food industry brings you salad and chicken nuggets cheaper—and spreads deadly food-borne pathogens farther.”
And later in the article:
“In other words, the same hyperefficient distribution system that brings you convenient and affordable salad greens and all the chicken nuggets you can eat can just as efficiently deliver E. coli, salmonella, and other dangerous bugs to your plate. Moreover, today’s industrialized food production processes carry other public health risks. ”
The article contains several interesting stories and interviews, but lacks solid evidence supporting the article's main premise that a less consolidated food system would be a safer one. Yes, there has been consolidation in agriculture. Yes, when a large firm has a food safety event, it affects more people. But, what we don't know is whether, overall, a food system with many smaller firms is safer than one with fewer larger firms. Indeed, the author even acknowledges the following:
“According to the CDC, no evidence suggests that smaller or larger producers have an inherent advantage on food safety. “It has to do more with your practices than your size,” says the CDC’s Matthew Wise. ”
What is not mentioned is that large size can sometimes lower the average (or per unit) cost of investing in certain food safety technologies.
I touched on this issue in my book, Unnaturally Delicious, when talking to Frank Yiannas, the Vice President of food safety at Walmart. Here's an excerpt:
“More than 120 million Americans (more than a third of the U.S. population) shop at Walmart every week. Does the sheer scale of the operation make the U.S. food system riskier? If Walmart has an outbreak, multitudes would be sickened. Yiannas replied: “One out of every four dollars spent on food are spent at a Walmart. We can make a big difference. Large organizations like Walmart result in a safer food system.” He points out that when Walmart makes a change, it affects the whole system. Sure, smaller companies might have outbreaks that affect fewer people, but when lots of small companies are having lots of small outbreaks, the problem is more widespread. A downside to small companies, said Yiannas, is that they can’t easily invest in improving the system as a whole. While Walmart often attracts negative attention because of its size and scale (e.g., Do they pay workers fairly? Do they hurt local mom-and-pop businesses?), at least in the world of food safety, their size has significant benefits for its customers, and as I’ll soon discuss, even for non-customers. ”
Yiannas went on to talk about the value of protecting Walmart's brand, the fact that their internal safety standards far exceed government minimums, and he presented evidence that the food safety initiatives that they've implemented have improved safety for the whole country (because of their size). You'll have to read the book for all the details.
I'll also point out research by Marc Bellemare (here's his piece on the topic in the New York Times) showing a relationship between food safety outbreaks and the prevalence of farmers markets (you know, those places with many small farms and processors).
I'm not saying that larger IS unilaterally safer, but I am saying there is no solid evidence to support the broad premise behind the Washington Monthly article. There are a lot things to like about small producers and we ought to think about ways of lowering barriers to entry that are sometimes created by food safety regulations, but doesn't mean we should cast undue fear about our present food system, which is among the safest in the world.