ok,i gave the chao who won the shovel and watering can the seed but he still dropped it.does it matter if the chao who won them reincarnates?
No, even baby chao can plant seeds. As was said, sometimes they'll give up if they don't find the right place to plant the seed. You may want to do the races again with that chao, though, to make sure it does have both the shovel and watering can.

~ Crazy C Lea