If a place advertises itself as a "farmers' market", the place should be filled with farmers selling their locally grown fruits and vegetables.
if it is NOT advertised as a "farmers' market". then I think that selling produce from the local distributors is fair game. And I do NOT think that is such a bad thing. Cleveland's West Side Market is stocked with produce vendors that buy their product from the local wholesalers. The quality is variable. Some guys sell top of the line stuff that exceeds the quality of the Tops (Ahold) and the Giant Eagle Supermarkets. Others sell "surplus" produce which has a limited shelf life. I generally bought the latter as the taste of ripe fruit is generally very good (understanding tahat I had to use it quickly). Generally, I processed that fruit and vegetables over the weekend and used it by Wednesday.
My concern with the "farmers markets" that you see in some of the suburbs is that while locally grown, so much of the product is garbage - overripe, insect ridden, etc. and of course, higher prices. And why don'tI believe that a woman with a $100 nail job selling the produce is NOT the one growing it. I am not paying $3.95/lb for tomatoes that are overripe or that look like garbage, even if they are "heirloom". (At home, my father and MIL both frow 10-15 different varieties of tomatoes on their farms.
Out here, you do better stopping at SOME of the roadside markets than the Saturday "town square" events.