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It is true that breast reduction surgery does decrease the mother's capacity to produce milk. Since many mothers produce more than enough milk, mothers who have had breast reduction surgery sometimes manage very well to breastfeed exclusively. However, if the mother seems not to produce enough, she can still breastfeed, supplementing with a lactation aid (so that artificial nipples do not interfere with breastfeeding).
A mother can also do some extra pumping if she does have enough milk. Also, there are woman reporting great results using herbal supplements from likes Goat's Rue and Mother Milk Plus Special Blend from the company Motherlove. You can read testimonials from moms and lactation consultants.