It is permissible to pay Zakat al-Fitr in cash if that is more beneficial to the recipient. There is no doubt that people’s need for money is greater than that for food during the current economic situation.
Giving Zakat al-Fitr in cash is a view that dates back to the early generations, as has been narrated by Abu Is-ḥāq al-Subā‘i, one of the most knowledgeable of the Tabi’een (those who succeeded the Companions), who said, “I came in contact with them giving Zakat in cash instead of food.” And al-Bukhari included a chapter in his Saheeh entitled “Zakat Paid in Kind,” in which Tāwoos related that Mu‘ādh (may Allah be pleased with him) said to the people of Yemen, “Bring me charity in kind: clothing instead of barley and grain. It will be easier for you and better for the Prophet’s Companions in Madinah.” This proves the permissibility of distributing (Zakat) based on its value. This was also applied by the rightly-guided caliph ‘Umar b. ‘Abd al-‘Azeez, because he would instruct his governors to collect it in cash.
This is also the view of the Hanafis, and it was the opinion of Shaykh al-Islām Ibn Taymiyyah, of the Hanbalis, so long as it is more beneficial for the needy.