If we want to encourage a less risk-averse society we have to remove restrictions from people. We have to accept that sometimes things will go wrong with tragic consequences, but ultimately it is up to individuals to act sensibly.
There are good reasons to license the sale of food because of food hygeine. But you should also be allowed to sell food and other produce without a license, as long as it's clearly marked as unlicensed. (There could be exceptions e.g. meat products)
Examples of things to be sold without a license include:
Home made beer – this is actually a very safe product because it tastes awful if it's contaminated.
Cakes and biscuits sold at village fetes and that sort of thing.
Manufactured craft products such as jewellery – could be dangerous but it's up to the buyer to decide whether its safe.
All the above should also be exempt from excise duty of course because they are small-scale and therefore not worth the bother.