Your experience pretty much mirrors mine. The best food producer seems to be the level 4 farm, which gives 15 food while causing 12 squalor. But that particular tech is in Economy 3; I haven't gotten there yet. I spent way to much time finishing out construction and most of legalism, so I tend to use outlying villages as food producers. Slot one gets a farm, slot two gets a cattle ranch, if it has a port it becomes a fishing port. How far I upgrade depends upon two major factors: do I own the provincial capital (where I can spam happiness buildings) and what buildings can I build there (I really like the gladiator school as Rome; 12 points of happiness for 4 food consumed).
I have to limit military development in order to provide sufficient foot for the empire and keep the provinces happy. But I can't go completely food/happiness or my ability to build good armies goes away.
By the way, has everyone else's experience been that the AI is just incompetent in this regard? Almost every faction at this stage of the game is either constantly having revolts due to unhappiness or can't maintain troops due to attrition because of starvation. They build too many of the wrong buildings and don't have enough happiness, food, or both.
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