Zakatul fitr can be given with money. It was established by the likes of Imam Nawawi and revived by Qaradawi. The purpose of zakatul fitr is make sure nobody is hungry and sad on eid day.
If we want to follow the letter and not the spirit of hadith, then anybody who gives rice, beans, gari etc instead of dates, barley etc has done wrong. Give a homeless money and he can buy bread, sardines and soft drink and have a happy eid. Give the same person rice and he has to look for means of cooking the rice and what to add to it. Give any indigent in SW Nigeria four mudu of dates as zakatul fitr and see whether he will accept.
Its payment in monetary value
Value of a thing in the literal sense is the equivalent price. Value in the technical understanding of the fuqahaa is of several definitions. In the definition of Ibn Hazm: “Value is the worth with which traders sell their goods, which is not exceeded except with a reason.” (Al-Muhalla). Ibn Hajar said: “the value of a thing is where the desire ends” (Fathul baari) Al-‘Adawiy describes it as “Value is the price with which people buy.”
Payment of Zakat in monetary value: There are two major opinions regarding this issue as follow:
1- Permissibility of using monetary value: this is the position of Abu hanifah, Sufyan thaoriy, Umar bn Abdul-Azeez, Hassan Al-basriy, Abu Yusuf, Abu Ja’far At-tohaawiy and others. Sufyan thaoriy said: “Using dates or barley is not a condition in Zakat al-Fitr, rather if the monetary value which is most beneficial for the poor is used, it is permissible, because the aim is to enrich the poor against begging as well as satisfy his need on this day (of eid)”
Qarah said: “We received a letter from Umar bin Abdul Azeez on Zakatul-Fitr directing that half of Sa’ to be given on every person, or its monetary value which is half a dirham. Al-Hasan said: It’s right to give dirhams in zakatul-fitr. Abu Ishaq said: “I met them giving zakatul fitri in dirhams equivalent to the value of the food.”
Their Proofs: The basis of charity in Islam is money. Allah says: “Take, [O, Muhammad], from their wealth a charity” (9: 103). They added that the elucidation of the Prophet was to remove difficulty and not as restriction of obligation, because the Bedouins and nomads value money so much, they fall under those who are to pay zakat, therefore for them to give zakat out of their cattle or produce which is readily available seems easier for them.
Also, consider that the Prophet declared that on five camels a sheep is due as zakat, whereas it a sheep is never found among camels, thus the word ‘sheep’ was only used to demonstrate the required worth.
Imam Al-baaniy said supporting use of monetary value:
“… It is also the opinion of Ibn Taimiyah, he said in Al-Ikhtiyaaraat: “It is permissible to use monetary value for zakatul fitri …” Abu Haneefah said: “The essence of zakatul –fitri is to help the poor ones and cater for their needs in accordance with the prophet’s statement: “Enrich them against seeking –i.e- begging- this day” (Muslim)
Thus zakatul fitri aims to enrich the poor, enrichment could be achieved by giving of dates, grain foods, barley, as well as by giving money, infact, the monetary equivalent could be more beneficial with respect to attending to the need of the poor. Hence if the poor one needs food, then he could purchase it using the money, if he needs clothing or medicine, he could use it for whatever he needs, because the text clearly mentions enrichment, and money does all that. (Al-Mugniy, Ibn Qudaamah, 4/ 295)
2- Non-Permissibility of using monetary value: The proponents of this view hold that items are intended not value and justifying their position using the hadith narrated by Abu Saeed Al-Khudriy: “We, on behalf of every young or old, free man or slave (amongst us), used to take out during the lifetime of the Messenger of Allah (may peace be upon him) as the Zakat of Fitr one sa’ of grain, or one sa’ of cheese or one sa’ of raisins.
And we continued taking out these till Mu’awiya b. Abu Sufyan came to us for pilgrimage or ‘Umra, and addressed the people on the pulpit and said to them: I see that two mudds of zakat out of the wheat (red) of Syria is equal to one sa’ of dates. So the people accepted it. But Abu Sa’id said: I would continue to take out as I used to take out (before, i.e. one Sa’) as long as I live.” (Bukhari)
Therefore, either of the ways is allowed. Allah knows best.