The New Year's Festival is a festival in Harvest Moon: Island of Happiness.
Between 10am and 6pm, go to the Meadow on Spring 1 and make some New Year's Mochi. Talk to Taro when you want to start the festival, and your character will pound Mochi for everyone. You will get to eat the Mochi as a reward, and you will return to your house when the festival is over. It will be 6pm on the same day when you get back, and you will have a few Rice Cakes in your rucksack left over from the festival. This festival will not occur in your first year of the game.
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