I don't think this is true. In California and New York City, vendors at farmers markets can only sell what they grew themselves, unless they get an exemption for a specific product and prominently label the product as grown by a third party, specifying the third party (usually things like cranberries grown by one vendor in the fall). Very occasionally you'll see foods like apples in plastic bags with supermarket labeling, but that's because the farmer packages and sells the produce directly to the supermarket.