A digital image analysis algorithm was developed to quickly and accurately inspect the germinated rice seed on panicle based on contour features. The algorithm was applied to a 4×200 images set which includes black background, white background and both side images of rice seed. Four ANNs were established for rice varieties: Jinyou402, Shanyou10, Zhongyou207 and Jiayou. The results show that the algorithm achieved an accuracy of 95% above for normal seeds, 85% to 90% for seeds germinated on panicle. Error analysis provided suggestions for increasing the accuracy further.