This can be done very early in the game, and should be as it is missable.
Enter the "Forest" area from the south entrance (southwest of Reja Forest and Reja Farm).
The hunter is somewhat hard to see but will be to your left immediately after entering this area between two trees. He's wearing green and standing in grass.
Talk to him and you will start a mini-game where you have 30 seconds to catch 9 or so rabbits. It may be easier to use the D-pad for movement, and use the A button to pick up the rabbits.
You can use the B button to run, or turn auto-run on.
They move around, but on my run as a rough estimate there were 2 rabbits in the area to the right, 3 in the bottom area down the stairs, and 3 in the area to the left.
I personally completed this after making it through the first Canyon area and to the Goaman, but I would think you can complete this as soon as you have free roam.