The onion rod is in the shape of an ankh, an ancient Egyption hieroglyph that represents the concept of 'life.' It was part of the inscription on many Egyptian tombs (since it forms part of the hieroglyphs for the concepts of health, happiness etc..), and Egyptian pharaohs (and gods) are often depicted holding an ankh (which is why it may look familiar).
Since the advent of Christianity, it has been occasionally used as a form of cross, mainly representing the Coptic christian church.