IT WOULD be difficult to think of a more depressing start to a new year.

The first week of January has brought relentless rain and on the economic front a reminder that volatility is here to stay.

On the first trading day of the year, the Chinese stock market dropped like a stone, wiping billions off the share values of UK companies because of concerns about another global recession.

The oil price also dropped, which was rare good news - but the downside is that commodity prices, on which farm incomes depend, have increasingly been tracking the oil price.

This is a reminder of the old adage that 'you can't buck the market' and of the reality that problems in China become problems for the rest of the world. For years now, China has been the market driving much of the food industry, particularly in the southern hemisphere. Falling demand for dairy products in China was one of the big drivers of the plunge in milk prices.

As a result of events this week there are now even fewer signs of that changing quickly. That applies equally to other commodities and it is why the continuation this week of economic problems in China, which first made headlines last summer, had such an impact. Agriculture will feel the effects, because as people in developing countries feel poorer - as they will when economic growth and confidence falters - they quite literally lose their appetite for the high value, imported products the rest of the world wants to sell them.

This will add a fresh impetus to tackling the problem of volatility. This is something everyone is now talking about in agriculture, from the European Commission to individual farmers, but it is sadly an issue where there are no obvious solutions.

When those solutions do begin to emerge, they will not be about a magic bullet. They will be about a mix of better discipline, via contracts, price averaging, insurance-type schemes, better long-term borrowing arrangements and effective futures trading. None have the capacity to solve the problem - but if things keep going as they are, it will become impossible for any farmer to plan, when the only certainty is CAP payments, and even those are buffeted by currency rates.

This will increasingly be the subject of the moment at farming conferences, beginning this week in Oxford. With no obvious solutions in the offing, the Commission needs to set up one of its high level groups or committees to look at this issue. Its timetable must be to report before the summer on an across the board approach to this problem.

For years the Commission has made much of the 'multi-functional' European farming model, which is about delivering not only food production, but the environment and a thriving rural economy. If it wants to keep that model intact it needs a similar multi-functional approach to tackle volatility. This is traditionally about coping with peaks and troughs, but what is adding to the challenge now is that we have not seen peaks since 2014, and are grasping instead for a strategy to cope with bumping along the bottom while a longer term survival plan is developed.

To date, all that has come from the Commission is an acknowledgement that a problem exists and will have to be tackled. To be fair to the farm commissioner, Phil Hogan, he is keen to do more to get the European Investment Bank involved in loan arrangements to agriculture, that offer lengthy terms with repayments linked to commodity prices. That is the sort of radical thinking that is needed.

But farmers themselves need to accept that the traditional model of buying and selling and hoping to make a margin is effectively broken. That has driven a lot of people into poultry farming, because they like the certainty of contracts.

While that model cannot be replicated across the industry, some of that mindset has to come into the major commodities. To date all we have had, officially, from Brussels is more of the same in the shape of private storage being re-opened for pig meat to take surplus production off the market until prices improve.

This really is about bumping along the bottom - and as the new six-month Dutch EU presidency begins to discuss the shape of the CAP after 2020, it needs to ensure that stability is one of the central drivers of the reform process.