I hhave been following the trading trail. I got the ribbon from the mother. I then used the ribbon on the chain chomp in the dog house. The chomp gave me a tin of dog food. I see lots of dogs running around the village but I cant speak with any of them. Who are you meant to give the dog food to?
If you go to the beach there is a hut where a blue crocodile lives. He will accept it for some bananas. I am not sure if you need to progress further with the story before you can do this though. You will know when you need the bananas anyway