Are you accounting for production bonus buildings? For instance, with a mill I have a village of just over a thousand feeding themselves reasonably handily (insofar as the game tells you anything, but they're only falling slightly), with a solid 15-20% of the population working in construction.
Actually what I said holds true. Most farmers are making less than 1 food per person. They're being subsidized by the other farmers. When I say "most" I mean about 700 farmers in your case. You can see this by gradually increasing the number of workers on your building and noting how much food production drops. Say, you add another 50 people to construction, you'll find this reduces food production by maybe 30 or so. Well, that kills 30 people, but you freed up 20 extra people to be construction workers. The maths is pretty clear in the game.
Basically that was the only way that Tom could get the population numbers to plateau out. If each farmer makes
at least one food, then you never get a limit: each farmer at least feeds themselves plus more people, leading to infinite growth. Tom didn't want that, he wanted population to stabilize at some level. And to do that, you need to have diminishing returns. e.g. at some point 50 food feeds 50 farmers, and they make 40 food which feeds another 40 farmers. then those 40 farmers make 30 food, feeding another 30 farmers, and so on until you get the last farmer who can't muster enough extra food to add even one person. Sure, you added extra people and they all farmed, but after those 50 guys, each additional guy was actually a net drain on the economy.
But this system is heavily exploitable. Towns which are
anywhere near the cap in this system are massively inefficient. it is similar to Zeno's Paradox of the Tortoise and Achilles". You can maximize production by working out at
which point the farmers hit break-even point, then switching everyone over that to some other job.