For my 2 year old son's "Old MacDonald" themed party, I used empty egg cartons for the favors. I filled them with plastic easter eggs which had inside them little toys, animal cookies, and stickers. Then I handed them out while my son was opening his gifts so none of the kids felt left out.
We sang the song while opening gifts, when the part came to decide which animal (or not so animal) noise to make, the person giving the gift has a "solo!" We had everything from chickens that said "quack" to fish that went "blub, blub" and barn doors that creaked!
I have used www.birthdaypartyideas.com for lots of party ideas. I did a search and they have a whole section of "Farm Party" ideas. Check it out: http://209.15.117.162/html/farm.html
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