The reason for this solution is pretty simple: onion farmers felt that the cause of the problem was the onion futures market and they lobbied their politicians

The reason for this solution is pretty simple: onion farmers felt that the cause of the problem was the onion futures market and they lobbied their politicians to ban them. The politicians didn’t care and banning the futures is a much more obvious visible action than introducing some complicated regulation. It’s also faster/easier to do and looks like a stronger, more serious reaction. So the reason for the ban is that it’s what people wanted and their elected representatives didn’t have strong feelings against it. The reason the ban still exists is pretty simple too: no one cares strongly enough to lobby to have it lifted and so it remains by inertia.