Anoop, it would take a book-length dissertation to explain all the differences between the standard food distribution system and farmer's markets. But I'll try for an abridged version.
Basically, the food distribution system depends on "factory" farms. These are huge operations whose hallmarks are monoculture (i.e., the growing of a single crop), using vast amounts of synthetic chemicals, and varieties that are choosen to meet the needs of the system. Such characteristics would include things like standardization of size and shape, pest and disease resistence, and the ability to withstand the abuses of truck, train, plane, and shipboard transportation. Varieties are also chosen for their ability to be harvested unripe, and "ripen" while under transit or while in storage facilities.
The downsides of this system should be self evident. Food quality and taste can suffer, and are often lost in the process. And the nutritional content often is lower as well. The upsides are that the system produces great quantities of food inexpensively; and it can deliver food that is out of season for a particular area. That, for instance, is why you can buy tomatoes in January. While the food quality might not be the best, it's a method that affordably feeds huge populations.
Farmer's markets, on the other hand, represent a return to the "truck farming" days, when food was produced locally, and trucked into the cities. The food is produced by diverse farming (i.e., many types of crops), is allowed to ripen in the field, and is picked the morning of the market or the afternoon before. Varieties are most often chosen for their taste and table values, being as transportation abuse is not an issue. Many (perhaps most?) farmers who grow for these markets use organic methods, although they might not be certified under the law.
The obvious upside is food that has better quality and flavor. The downside is cost. Growing close to where most of us live, and giving the plants the time they need to ripen their fruit, costs more. One of those cost elements, unfortunately, is greater waste. If a grower brings, say, ten flats of tomatoes to market, and only sells 8 of them, the other two have to be disposed of somehow. There's no way to hold them until next week's market. Given the inherent restrictions of land availability and costs of growing, this is a method that produces smaller amounts of food more expensively.
So the trade off is simple. Food is like anything else, and you pay more for quality.
Keep in mind, too, that it isn't only a matter of factory farms vs farmer's markets. There are other elements of food distribution as well. CSAs, for example, in which the consumers have an equity interest in the crop, and variously organized co-ops, and pick-your-own farms, and so forth.
In general, though, freshness, when used as a synonym for goodness, proceeds through the following steps:
1. Grow it yourself and harvest at the peak of ripeness, just before using.
2. Buying locally grown directly from the farmer.
3. Buying locally grown from a specialized distributor.
4. Buying at the end of the food distribution chain---which means the supermarket.
Edited by KYHeirloomer - 8/8/11 at 4:26am