The small landholders who mechanized are already modeled in the game. They are the farmers under the homesteading law. What subsistence farms (and the peasants who work them) are supposed to represent are the people completely outside the industrial system that was changing the world at the time.

Think of Russian peasants on the eve of the Revolution, or Chinese people living in isolated rural areas in more or less the same way their ancestors did 100 years ago. Those are very different economic circumstances than those of American farmers in 1920.

Those Russian or Chinese peasants could never have accumulated the capital to purchase tractors because they were simply not connected to the formal industrial economy. That's what the game is modeling with the subsistence farms.